1. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time © Copyright Growth Ventures, Inc. Can They? And Will They? HR Leadership Idea…. ‘Finding’ Employee Engagement Can Help Cut the Cost of ‘Growing’ It Inland Press Foundation Human Resources Management Conference March 10, 2015

2. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 2 1 – ‘Employee engagement’ is continuing to gain attention… Low hiring volume puts more focus on the current workforce Research shows ‘growing’ employee engagement has payoff 2 – We think attention might shift a bit… It’s not purely the organization’s responsibility to build engagement People might differ in their ‘inclination to engage’… so find them 3 – ‘Employee engagement’ will enter the world of candidate screening… Tools will target the concept of ‘inclination to engage’ Data analytic platforms will track and refine the payoff 4 – The question is how well the idea might work… First, let’s set the stage…

3. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 3 Performance evaluation results for more than 500 Machine Operators and Adjusters…

4. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 4 Performance evaluation results for more than 400 Sales Associate staff…

5. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 5

6. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 6 Performance differences result for many reasons… How well people learn… how they apply it What they do… how they do it What they seek… whether they engage with their work If we want to predict overall performance, we need to “predict the pieces”… Do certain pieces drive who performs best overall? Are some pieces more predictable than others? Can Do Is overall based mainly on Can Do pieces? Will Do What about Will Do pieces?

7. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 7 Note: The values shown are computed using regression-based policy capturing analysis. They show how each individual performance rating related to supervisors’ ratings of Overall Job Performance; i.e., how much statistical weight each “Can Do” and “Will Do” area carried in shaping an Overall Job Performance rating. Using statistical analyses to examine supervisors’ ratings of Overall Job Performance among 500 factory workers…

8. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 8 Will Do Employee Engagement Peoples’ Will Do and Employee Engagement seem to be changing…

9. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 9 Most candidate assessment tools are decades old Based on research and development a half-century old Good research on “Can Do” assessment, some on “Will Do” But, results are linked to an old workplace and workforce Most candidate assessment tools are decades old Based on research and development a half-century old Good research on “Can Do” assessment, some on “Will Do” But, results are linked to an old workplace and workforce The workplace is different today What “explains performance” has changed Technology has altered what jobs demand A tough economy emphasizes cost control The workplace is different today What “explains performance” has changed Technology has altered what jobs demand A tough economy emphasizes cost control The workforce is different, too Different generations – evolving wants Different businesses – evolving needs Shifting “Can Do” and “Will Do” balances The workforce is different, too Different generations – evolving wants Different businesses – evolving needs Shifting “Can Do” and “Will Do” balances Legal issues in hiring continue to grow Candidate screening can create legal challenges Adverse impact is monitored with ATS systems “Equally valid/less adverse” is a growing standard Legal issues in hiring continue to grow Candidate screening can create legal challenges Adverse impact is monitored with ATS systems “Equally valid/less adverse” is a growing standard

10. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 10 Try to gain a view of the “whole candidate,” so we can predict overall outcomes on the job…

11. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time Some of the areas to initially assess… 11

12. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time Other attributes likely to be assessed… 12

13. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 13 Standard assessment tools can work across different companies and jobs… Some assessments cover the basics But, companies are unique… Their leadership seeks differentiation Jobs are unique, too… Creative job design drives differentiation “Company-keying” candidate assessment works best… Finding how to maximize the company’s greatest investment… people

14. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 14 “Drive to Succeed” scores for more than 400 Retail Sales Associates…

15. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 15

16. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 16 “Will Do” assessment scores for approximately 1,000 blue collar employee candidates… No. Of Candidates Scores on a Rational “Drive to Succeed” Scoring Key

17. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 17 Some assessment vendors use “rational” scoring keys in assessing candidates’ “Will Do” qualities… Rational Scoring 1234

18. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 18 Other vendors use “empirical” scoring keys in assessing candidates’ “Will Do” qualities… Rational Scoring 0-55

19. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 19 Driven by data, an “empirical scoring key” can erase faking…

20. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 20 “If candidates are smart enough to fake an assessment, they’ll be great employees” Bunk… the tool’s validity will be zero… or worse “When our tests were validated they showed no evidence of being fakable” Were they validated with current employees,or with real candidates? “Faking is a very rare event” There is growing evidence candidates fake “Will Do” assessments “Keying” candidate assessment tools works best… Find how to maximize the way to score your candidates

21. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 21 Job Performance

22. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 22

23. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 23

24. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 24 Just what is ‘employee engagement’? Simply a new version of employee opinion and satisfaction surveys? An demonstrable influencer of job performance… and things like retention? A quality of the employee? A result of things the employer does? Both? Is it possible to “find engagement”? The HR world is paying more and more attention to ‘employee engagement’… A driver of organization-wide surveys and research A foundation for action planning A metric for holding management accountable A norm for comparing organizations

25. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 25 EMPLOYEE ENGAGEMENT IS A TWO-WAY STREET “Many view employee engagement as management’s job, but it also resides in an employee. Assessing ‘Will Do’ qualities in candidates helps hire those more likely to engage,” says Dr. Leaetta Hough, Chief Science Officer with HirePayoff™ “We know management-led actions play a role in growing employee engagement, but our research shows a major part of employee engagement resides within the employee. It’s a very simple fact – an organization’s level of employee engagement results from both whom it hires and, then, how it treats them,” concludes Dr. Hough. Visit www.hirepayoff.com to see the full story onwww.hirepayoff.com EMPLOYEE ENGAGEMENT IS A TWO-WAY STREET

26. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 26 ENGAGEMENT IS PREDICTABLE! “Sure, management plays a role in building employee engagement, but the evidence is clear – a large part of the load rests in who gets hired, ” says Dr. David Jones “…This is where the concept of payoff enters the discussion,” says Jones. “We’ve already demonstrated that a selection tool predicts bottom-line performance. But now,” adds Jones, “it’s possible to put a third leg under the stool. Dr. Hough was right – employment testing for ‘Will Do’ competencies can forecast employee engagement.” Visit www.hirepayoff.com to see the full story onwww.hirepayoff.com ENGAGEMENT IS PREDICTABLE

27. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 27 Low work-focus drives severe employee disengagement High people-focus drives strong employee engagement

28. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 28 100%Increase 56%Reduction

29. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 29 ENGAGEMENT PREDICTS! “HR analytics show screening for competencies and the likelihood of growing employee engagement produces a clear bottom line return,” says Dr. David Jones. “…When held to both performance screening standards and employee engagement screening standards, results showed clear bottom line payoff…the most distinguishing feature of Highly Engaged employees was how effectively they “Meet and Greet” customers… Highly Engaged employees perform higher overall, but customer interaction is were they were most different from those who reported being Disengaged,” says Jones. Visit www.hirepayoff.com to see the full story onwww.hirepayoff.com ENGAGEMENT PREDICTS!

30. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 30 Those who ‘passed’ Eager to Engage screening standards… Select among the top 15% of Eager to Engage scores and raise the odds of finding ‘Highly Engaged” employees…. 63% Select among the Top 50% of Eager to Engage scores and lower the likelihood of finding ‘Disengaged” employees…. Select among the Top 50% of Eager to Engage scores and lower the likelihood of finding ‘Disengaged or Disenchanted” employees…. 51% 55%

31. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 31 ‘FINDING’ ENGAGEMENT PAYS! “ Why would an employer not focus as much on ‘finding’ as on ‘growing’ employee engagement?” asks Dr. David Jones. “Bottom line, why wouldn’t an HR or operations leader add the concept of finding engaged employees to the hiring process?” asks Jones. “Too, what if the employers’ turnover is in the 20%+ range; typical of lower-level positions, where engagement is so important and receives so much employer investment? Look at how quickly the organization’s overall workforce engagement could be increased via finding higher levels of engagement. Why spend resources only on growing employee engagement in such a setting?” Jones asks. Visit www.hirepayoff.com to see the full story onwww.hirepayoff.com ‘FINDING’ ENGAGEMENT PAYS!

32. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 32

33. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 33 Candidate screening is still challenged… Gender and ethnic challenges are frequent Background checks are gaining attention ADA challenges remain There’s a growing employer checklist… Monitor adverse impact closely Seek out “equally valid, but less adverse” possibilities Will Do Use Will Do screening to mitigate adverse impact!

34. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 34  No matter what tools make up a selection (or promotion) procedure…  Tests, interviews, physical ability exams, physical fitness metrics, job simulations, etc.  No matter how the procedure is used to guide decisions…  Simple pass vs. fail standards, multiple hurdles, weighting, rank-ordering, etc.  Q: Is there ‘Prong 1’ evidence of adverse impact?  ‘‘2 to 3 SD Test’, shortfall, etc.  Q: If so, is there ‘Prong 2’ evidence of validity?  Are there job analysis findings, validation research, statistical analyses, and acceptable documentation to justify the procedure?  Q: If so, is there a ‘Prong 3’ challenge to the method of use?  Might different qualifying standards maintain the validity, but reduce the adverse impact?

35. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 35 Different Validation Strategies for Different Selection Procedures and Their Uses Criterion-Related Validation Construct Validation Content Validation Validity Transportability Validity Generalization

36. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 36

37. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 37 1. A Suitable Job Analysis 2.Competent Selection Procedure Construction 3. Selection Procedure Content Related to Job Content 4. Selection Procedure Content Representative of Job Content 5. A Justified Manner of Use

38. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time N 38 NN N Clear evidence of criterion- related validity in Setting No.1 Job in Setting No.1 closely matches job in new Setting No.2 Evidence of fairness in Setting No.1 for groups a significant factor in Setting No.2 Account taken of variables that might affect validity in Setting No.2 VALIDITY TRANSPORTABILITY JUSTIFIED NO BASIS FOR TRANSPORTING VALIDITY YYYY N N Same Test to be transported from Setting No.1 to Setting No.2 Y

39. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 39 “It is the interpretation of test scores required by proposed uses that are evaluated, not the test itself. When test scores are used or interpreted in more than one way, each intended interpretation must be validated.” The premises… Those who ‘pass’ meet basic requirements on what’s measured Higher is better in predicting job performance Those who ‘pass’ might undergo further screening, or… Hires might be selected at random from those who pass

40. How Tapping a Candidate’s Can Do and Will Do Drives the Bottom Line Building the bottom line... one hire at a time 40