Effectively predicting the future success of job candidates, both internal and external, is challenging at best. Traditionally, this process has relied heavily on interviewing – documented as one of the poorest predictors of on-the-job performance – and, occasionally, the use of psychological testing or biographical information. Yet, there are approaches available that are more effective than using such tactics alone.
In particular, simulations or work samples measure job skills by requiring an individual to demonstrate competency in situations that parallel actual work settings under realistic and standardized conditions. Their primary purpose is to evaluate what a candidate can do rather than what s/he merely knows. One prime example of this type of assessment, which is commonly used with leaders, is a business case.
AETHOS has worked with respected talent consultant Michelle Crosby in delivering business case simulations to organisations in the hospitality sector as a means to assess their internal executive bench strength. We asked Michelle to elaborate further on the benefit of this approach for screening and selection.
AETHOS: “Michelle, what does a business case look like?”
Crosby: “A business case presents candidates with information about a particular business situation or problem and asks them to analyse and prepare a set of recommendations. Rather than create a large number of scenarios to cover a wide array of situations, employers may design a single exercise to measure the general competencies in question (e.g., an interactive role play between the applicant and a trained assessor that measures an applicant’s problem solving, communication and interpersonal skills). Candidate’s scores on these types of assessments are generated by trained assessors who observe the candidate’s behaviour and/or by measuring key outcomes (e.g., ability to accurately diagnosis a business situation or deliver a presentation).”
AETHOS: “How can business cases fit within the overall applicant/candidate due diligence process?”
Crosby: “Business cases can be used effectively as part of the candidate assessment process. Given the level of effort required, it is recommended that the business case be reserved for finalists for the position — the final 3 to 5 candidates who have successfully completed other steps in the process, such as testing and interviewing, but prior to reference checks and other final steps.”
AETHOS: “What type or level of role is most appropriate for the implementation of a business case?
Crosby: “Work samples can be effective for most any level or type of position because, regardless of role, having someone demonstrate they can effectively perform the same types of tasks they will encounter on the job is valuable. Business cases are used most often with more senior leadership positions, although some entry-level management training programs also use them.”
AETHOS: “What are the key steps to be mindful of when conducting/administering business cases?”
Crosby: “Simulations, such as business cases, require careful development to ensure fidelity to the role requirements. Most often this type of case development is done by trained and experienced industrial/organizational psychologists. In addition to creating the materials for the case, developers will also create the assessor guidelines to evaluate performance and provide training for the assessors to ensure a valid and reliable process. These steps are critical to ensure job-relatedness, fairness and consistency in the process. Development of an effective business case can be difficult to do ‘on your own’ and typically requires additional expertise.”
AETHOS: “What is the outcomes research or evidence that business cases work, and what information do they reveal that hiring managers often cannot obtain in other ways?”
Crosby: “Extensive research in the psychological community supports that work samples, such as simulations and business cases, are among the best predictors of future on-the-job performance because they ask candidates to demonstrate their competencies in activities drawn directly from the job itself. In addition, business cases offer high “face validity” to candidates – they look and feel like the job and candidates readily accept them as a result. Often times, candidates may “look good on paper” or “interview well,” but when it comes time to perform, they are found lacking. Simulations help hiring managers get a preview of how the candidate will actually perform in a job-like setting, something that is very hard to do in an interview.”
AETHOS: “How do companies get started in developing or commissioning a business case study?”
Crosby: “As previously explained, development of an assessment requires expertise. If you are interested in exploring how a business case could be used to enhance your current hiring or development process, reach out to an expert to discuss your situation and hiring objectives to learn more about the power of a business case to enhance your selection process.”
Through our experience in running assessment centres on behalf of hospitality groups to either help qualify external candidates or to review incumbent talent for development or succession planning, we have witnessed the clear benefits that business cases can deliver. The exercise of placing individuals into a simulated real-life scenario and monitoring how they evaluate, respond and plan to execute provides valuable metrics and insights that are unobtainable with structured interviews, psychometric assessments and reference-checking alone. We would strongly recommend including a business case in your assessment toolkit ready for deployment when next attempting to predict an executive’s potential for future high performance.