Getting more out of employee assessments

Mary Clarke, Cognisco USA, New York City

Organizations aiming to maintain or improve a good corporate reputation should look long and hard at the effectiveness of their current talent management process. A recent corporate reputation study stated that MBA students in the US are flocking to hot growth industries, including financial services, information technology, and energy.¹ However, large oil and gas companies and renewable fuels start-ups alike cannot always rely on their brightest recruits to perform well on the job.

Even the most able incoming and senior level staff, however well educated or well trained, can make mistakes. Research shows that 23% of employees misunderstand at least one crucial aspect of their job.² That is, employees may actually misunderstand their roles and responsibilities, incorrectly applying what they think they know and need to do to meet workplace objectives.

Such misunderstanding can have serious consequences for staff well-being and the business bottom line—namely, safety failures, security breaches, shareholder mistrust, lost revenues, and lost customers. Ultimately new hires who misunderstand their job role hinder future recruitment efforts and damage company reputation.

As these pitfalls show, the importance of conducting regular employee assessments cannot be overstated. Yet today, surprisingly few companies have effective assessment programs in place as part of the talent management process. Without well-crafted assessments, companies are ill-equipped to identify the extent to which employees truly comprehend how to fulfill the requirements of their jobs, have the capability and confidence to perform their jobs, and are able to make big decisions on behalf of the company.

As consumers and businesses alike become increasingly concerned about the price of fuel and more generally our energy future, oil and gas companies need to maintain a stable workforce to effectively address these key economic issues while keeping company reputation intact.

Management can boost the ROI of learning and development budgets by taking assessment to a more “intelligent” level.

Common assessments

HR performance review procedures and training programs too often rely on management to make a subjective assessment about an employee’s performance, drawing from a personal development plan. Worse still, some companies rely on employees to make these judgments themselves about how well they understand crucial aspects of their job. Subjective methods fall short because they cannot be sustained over the long term, nor provide concrete data for both management and employees to measure improvement over time after each new assessment phase.

In addition, most training programs only demonstrate that employees have memorized the information given during a course. However the key question remains: do employees actually understand the information they have been given, and will they be able to use it in a practical way?

The bottom line is that employees make mistakes no matter how much training is provided, which can cost organizations dearly. Responsibility for these errors will more than likely land at the door of the CEO and HR director. The mistakes are often made because staff do not fully understand their job roles and responsibilities or the effect of their actions on the business.

Employers have a responsibility to their employees and customers to make sure that each and every member of staff understands the requirements of their job. They should be assessed regularly to identify skills gaps, and coached to ensure they reach their full potential.

Intelligent assessments

Organizations should take advantage of the latest employee assessment technology to get talent management right. More intelligent and comprehensive employee assessment tools can make a world of difference for managers who need:

• Objective measurements of employee understanding, misunderstanding, and confidence
• Detailed recommendations for tailored retraining programs to improve individual performance only for those employees who really need it
• Proven outcomes, such as cost and financial savings

Assessments can be designed by subject matter experts to highlight where knowledge gaps lie in a specific topic area or vertical market. This allows companies to analyze performance by course, individual, group, team, geography, office location, service, product line, or on an enterprise-wide basis. Test design can also help determine which staff have a full understanding, some understanding, no understanding, or misunderstanding within an internal employee development program framework.

This approach provides a highly accurate and effective means of testing, distinguishing those who are functioning at optimal levels and those who are generating risk within the company. Assessments help identify the “training gap” in a very cost-effective way. In the words of a client: “Before this, no one realized they had a knowledge gap and now we have eliminated the error in self-perception.”

Companies may also choose to issue assessments in conjunction with a psychometric test, giving them for the first time a complete, highly detailed summary of the precise skills and competencies of their workforce. Even when rolled out across large and diverse groups of individuals, assessments can provide not only a rich pool of data but, perhaps more importantly, a consistent, reliable and objective snapshot of the performance of the entire workforce over time if administered regularly.

Assessments can be integrated within an existing corporate development and learning framework as a tool to test whether individuals can qualify for exemption from certain requirements relating to training. For example, for an organization that wants to improve customer service across several regional markets, a customized assessment (crafted in conjunction with line of business managers) can give access to a complete, highly detailed database of the precise skills and competencies of its entire associate structure. The potential costs savings of such an approach, which moves away from blanket training, are evident.

Assessments may also be used to identify those employees who do understand their job requirements, but lack the confidence to make the right decisions in tough business situations. Tests evaluate which employees feel confident and, most strikingly of all, isolate those who have largely guessed the answers, incorrectly, and then declared themselves confident.

By drawing out this data, management can empower employees to gain the confidence needed to do the right thing. Conducting such assessments regularly allows individuals to reach their true potential so that employers can in turn continuously improve business performance.

Overall, more intelligent employee assessments aim to help streamline the assessment process, ensure the workforce is properly trained and fully understands job requirements and, ultimately, help organizations safeguard against:

• Regulatory penalties
• Personal injury claims settlements
• Tax / revenue penalties
• Inefficient financial practice (treasury or tax)
• Industrial tribunal settlements
• Poor procurement practice
• Loss of business due to downtime
• Loss of business due to disaster

A case study

“Our future depends on our ability to harness the diverse talents, experience, and creativity of our people.”

This statement was made by the president of a global oil exploration company, but could have been uttered by an executive in any industry. Implied here is a notion that corporate reputation will suffer if the talent management process is poorly handled.

One of our large utilities clients has had measurable success using assessments to help improve their call center operations. A number of calls were not getting resolved at the first point of contact, costing the company millions a year and adversely affecting the customer experience. We helped craft questions for an online pilot assessment that was rolled out to a few hundred employees to gauge the level of knowledge and understanding of:

• their job role
• the specific call-types they were dealing with at the call center
• how their performance was affecting both the company and customers

The pilot assessment provided a breakdown of individual employee scores on each topic, including those topics employees passed and those where employees were putting the company at risk. Following the pilot, the company decided to roll out a full assessment to its entire staff of 600 call center employees.

The assessment program included specific training packages relating to the topics where certain employees misunderstood their job role or failed to prove their knowledge of a course of action to take in various call center situations. This removed the need for blanket training of staff and therefore has reduced overall training costs. The assessment program ultimately has improved employee performance, decreasing complaints and increasing customer retention rates.

The problem of how to mitigate business risk due to suboptimal employee performance is one that should keep CEOs and HR directors awake at night. Employee understanding and competence in their job roles is no longer just an issue for HR directors. Failure to conduct more intelligent employee assessments can have a serious, devastating impact across the business and company reputation. By regularly assessing the level of understanding of your workforce, you put your organization in a far safer and more productive position. OGFJ

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