Throughout the last 50 years, assessment centers have become an increasingly popular method for the selection and promotion of employees. During an assessment center (AC) multiple trained observers rate candidates on behaviors exhibited in multiple assessment center exercises (e.g., role-plays, writing samples, tactical exercises, etc.) and these behavioral ratings are pooled among the assessors to compute a total score for each candidate. Previous research indicates that ACs are valid predictors of job performance, perceived as job-related by candidates, and display less adverse impact among protected groups than traditional selection tests. However, ACs usually come with a hefty price tag, sometimes up to thousands of dollars per candidate.
Therefore, the question of whether an AC is worth the price continually presents itself to management. To answer this question, psychologists have developed a method called utility analysis. Utility analysis is the process of examining the economic gain to an organization from an investment in a selection system. This process uses information such as the validity of a new and old procedure, the number of candidates assessed, the percent of candidates selected, and the costs of development and administration.
A recent study by Thornton and Potemra (2010) examined the economic utility of using an AC as part of a promotional process (versus using a panel interview) for the position of sergeant at a large police department in the south. A total of 208 candidates participated in the process, costing the department a total of $158,970, or $764 per candidate. Based on initial promotions of 22 sergeants the results of the study indicated the following:
Moreover, significantly higher estimates of utility were shown when using the number of sergeants promoted over the life of the promotional list, as typically carried out within the field of public safety. Hence, this study highlights the economic benefits of using an AC for promotional purposes and further supports the usefulness of incorporating an AC into a selection process. In short, assessment centers are worth the cost!
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1 Source: Thornton, G. C., & Poterma, M. J. (2010). Utility of assessment center for promotion of police sergeants. Public Personnel Management, 39, 59-69.