CORPORATE L EADERSHIP COUNCIL M ARCH 2005

www.corporateleadershipcouncil.com

Fact Brief
Trends in Developmental Assessment Centers
Profiled Key Questions:
Industry Employees Revenues
Institution For what purposes do organizations
A* Pharmaceutical More than 100,000 More than $20 billion use assessment centers and what is
their typical audience?
B Pharmaceutical More than 50,000 More than $20 billion
C** High Technology More than 50,000 More than $20 billion How do organizations develop, manage,
and staff developmental assessment
D Manufacturing More than 10,000 Less than $5 billion
centers?
*Company A’s profile pertains only to its information management specialist assessment center.
**Company C is in the process of developing its assessment center What exercises and tests do
organizations include in their
assessment centers? What is the
return on investment for developmental
assessment center activities?

Issue Overview:
Table of Contents Using Developmental Assessment Centers to Fill the Leadership Pipeline
Executive Summary 2 The increasing need to fill the leadership pipeline . . .
Center Philosophy and
Audience 3 Talent management professionals are increasingly concerned about the aging workforce
and the recent rise in executive and senior management retirements. Research suggests
Center Development and that by 2005, the median age of the nation's workforce will be over 40 and that one in five
Management 5
senior executives in the Fortune 500 is eligible for retirement. A significant number of
Center Activities and North American firms need to fill 80 percent or more of their senior management positions.
Impact 7 Despite this need, only 18 percent of respondents to a Development Dimensions
International executive survey were highly satisfied with their internal succession
Research Methodology 11
management and development processes, and 33 percent expressed doubt in those
processes.1,2

According to the Council’s Voice of the Leader, organizations must successfully develop
high potential (HIPO) candidates to assume future leadership positions in order to
maintain growth. Companies that report highly successful succession management
processes were significantly more likely to report that they outperformed their
competitors.3,4

. . . is met with developmental assessment centers for developing HIPO employees.

Assessment centers offer an effective leadership development strategy, and are among
the more respected methods for identifying the most qualified candidates. Tests show
that interviews are only 20 percent effective while assessment centers are 65 percent
effective at identifying candidates who succeed.5

Given the need to identify and develop successful candidates for future leadership
pos itions , and the effectiveness of developmental assessment centers pipelines, this brief
offers tactical strategies drawn from interviews with four companies and the philosophy,
design, management, and impact of their centers.6

Catalog No.: This project was researched and written to fulfill the specific research request of a single member of the Corporate Leadership Council
CLC12ZUZ1M and as a result may not satisfy the information needs of other members. In its short-answer research, the Corporate Leadership Council
refrains from endorsing or recommending a particular product, service or program in any respect. Sources are contacted at random within
the parameters set by the requesting member, and the resulting sample is rarely of statistically significant size. That said, it is the goal of
 2005 Corporate the Corporate Leadership Council to provide a balanced review of the study topic within the parameters of this project. The Corporate
Executive Board Leadership Council encourages members who have additional questions about this topic to assign short -answer research projects of their
own design.

 2005 Corporate Executive Board

TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS
MARCH 2005
EXECUTIVE S UMMARY
To effectively assess, develop, and select high potential (HIPO) talent at manager and executive levels, profiled companies
implement single or multi-day assessment centers. Most profiled companies use simulation exercises, and two profiled
companies invite recently retired or current executives to participate as assessors in the center to offer visual evidence of high
level support for the assessment centers.
I. C ENTER PHILOSOPHY
AND AUDIENCE
Center Philosophy
Determining Purpose—Profiled companies
design assessment centers for selection
and development, though the majority offer
assessment centers for developmental
purposes as described below:
Ÿ Selection and Promotion
To streamline succession and talent
management processes by identifying,
developing, and promoting HIPO
participants
Ÿ DevelopmentTo nurture and
accelerate employee development
independent of the selection and
promotion process
Selecting Participants—Assessment
centers may be developed and offered to
any employee level. Centers at profiled
companies are designed for the following
employee levels:
Ÿ High Potential Upper Managers
Ÿ Information Management Managers
Ÿ Director Level and Above
Center Audience
Selecting the Audience —The assessment
center philosophy determines its audience
(the recipients of center assessment
results ). Centers focused on selection
provide results to managers and talent
management, while those centered on
development tend toward greater
confidentiality as described below:
Maintaining ConfidentialityLiterature
recommends maintaining confidentiality of
assessment results to encourage greater
participant development. Despite this,
profiled companies distribute results to the
following individuals:
• Participant
• Senior Manager
• Talent Management Team
II. C ENTER D EVELOPMENT
AND MANAGEMENT
Center Development and Costs
Collaborating with VendorsTo
maximize resources and to avoid
reinventing the wheel, companies may
choose to involve vendors in the design of
their developmental assessment center
and the creation of leadership
competencies. Three of four companies
designed their centers with the contribution
of vendors.
Anticipating Center Costs —There is no
average cost for assessment centers due
to opportunities for customization. Profiled
companies’ costs per person range from
$2,000 to $9,000.
Center Management and Staff
Companies employ both internal and
external assessors in their assessment
centers as a means of invoking company
culture while maintaining internal human
resourse capacities.
Staffing with Internal Assessors—
Companies may choose to use internal
staff as center assessors to promote
company culture and reflect senior support.
However, internal staffing presents the
following challenges:
Ÿ Lack of objectivity
Ÿ Significant demand on human capital
Hiring External AssessorsIn addition to
internal staff, companies may also employ
external consultants and executives to
participate as assessors and trainers.
External assessors present the following
challenges:
Ÿ No familiarity with company culture
Ÿ Reduce legitimacy and support for
assessment process
 2005 Corporate Executive Board
PAGE 2
III. C ENTER ACTIVITI ES
AND IMPACT
Center Structure and Activities
Determining Center Activities—The
content of assessment center programming
differs according to the organization’s center
philosophy, number of competencies, and
methods of testing. Companies may
include the following center activities:
• Role Play/In-Basket Exercises
• Critical Thinking Assessments
• Leaderless Group discussions
• Motivational Fit
• Personality Assessments
• Problem-Solving Activities
• Structured Interviews
Center Tests
Including Tests in CenterCompanies
use standardized intelligence and
behavioral tests in conjunction with
assessment centers. Research data show
that the combination of tests and activities
provides a markedly better means of
evaluating employees than either alone.
Profiled companies use the following tests:
• Myers Briggs Type Indicator
• FIRO-B Assessment
• Hogan Personality Test
Assessment Feedback and Impact
Calculating ROI Proves Difficult—
Profiled companies find it difficult to
calculate the return on investment of
centers over short center histories.
However, two profiled companies use the
following measures of success:
• Pool size of qualified internal
candidates
• Top leader awareness of internal talent
• Performance on future competency
assessments
TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS
MARCH 2005
Philosophy and
Audience
Center Philosophy and Audience
Distinct Center Purposes:
Develop or Select/Promote
“Organizations that adopt the
vanilla approach of ‘employee
development’ are often confused
when faced with the full menu of
[assessment center] application
options—promotions, rewards,
performance, succession,
selection, and career planning.”
—“Assessment Centers: Challenges
and Success Measurement Criteria,”
Mercer HR Consulting
(21 September 2004)
þ Recommended Reading
Pre-Hire and Developmental
Assessment Tools at Fortune 500
Companies
Corporate Leadership Council
(January 2003)
Details: This study seeks to examine
current trends and preferences
surrounding the selection and
assessment of employees.
Available:
http://www.corporateleadershipcouncil.
com/ShortLink?nLinkId=1327211
PAGE 3
Development and Activities and
Management Impact
Companies design assessment centers with distinct philosophies, resulting in
differing designs and audience. This section details the different philosophies that
form the foundation of assessment centers at profiled companies.
Center Philosophy #1: Promotion and Selection
Since first appearing in AT&T’s 1956 Management Progress Study, companies have
historically used assessment centers to screen candidates or target employees for
promotion.7 Research indicates that perhaps the most important feature of the
assessment center is that it relates to future performance, and not current
performance. By observing how a participant handles the problems and challenges
of the target job or job level (as simulated in exercises), assessors may better
understand how the employee would perform in the target position.8
Selection and Promotion at Company C—Company C intends to use its
assessment center for the selection and promotion of high potential, upper-level
employees , as described below:
Table 1: Developmental Assessment for Selection Philosophies
Co. Employee Level Description of Center Origin and Philosophy
HIPO Employees Company C will use the results of the assessment center for its
for Partner succession and talent management processes. The company
C Positions and seeks to strategically develop and manage talent rather than
Above filling talent needs in the moment.
Determining Center Participants at Company C—In order to select center
participants who will benefit most from their assessment center experience,
Company C assigns the following potential and readiness indicators during their
initial people review process:
FIGURE 1: DETERMINING CENTER P ARTICIPANTS AT COMPANY C
Company C intends to assign prospective participants a pair of the following potential and
readiness indicators, listed in order of priority:
Potential Indicators: Readiness Level:
§ High Potential (H) § Two Moves Away
§ Partner (P) § One Move Away
§ Vice President (E) § Ready Now
§ Senior Leadership (S)
Employees ranked “H Two Moves” are of highest priority for participation in the center, as the
center would provide the greatest developmental opportunities for this level of participant.
 2005 Corporate Executive Board
TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS
MARCH 2005
Philosophy and
Audience
Center Philosophy (Continued)
Separating Development from
Selection and Promotion
“Using feedback for developmental
purposes requires distinct tools and
processes that are different from
those companies use when the
feedback data are used for
administrative decision-making.
The two should be kept separate.”
—Sylvester Taylor,
“A Question of Leadership,”
Leadership in Action
(May/June 2003)
The Value of Confidentiality for
Development
“Confidential feedback is a
necessary ingredient for
development. To take a hard look at
themselves and commit to
self-improvement, people need a
safe environment.”
—Cynthia McCauley,
VP for Research and Innovation,
Center for Creative Leadership,
“A Question of Leadership,”
Leadership in Action
(May/June 2003)
PAGE 4
Development and Activities and
Management Impact
Center Philosophy #2: Assessment and Development
Increasingly, assessment centers are playing a leading role in accelerating
employee development. For example, in 2001, Bristol-Myers Squibb partnered with
Personnel Development International (PDI) to create the Accelerated Development
Program, in which the company selected 30 managers possessing senior-manager
potential to complete the assessment center. These HIPO employees attended the
center not as part of a screening process, but rather to identify needs for future
training and development.9
Reflecting the trend toward developmental assessment center use,
the majority of profiled companies —Company A, Company B, and Company D—
do not attach their assessment center procedures to selection and promotion
processes. The philosophies of the companies’ assessment centers for HIPO
managers and above are detailed below:
Table 2: Developmental Assessment Philosophies
Participant
Co. Description of Center Origin and Philosophy
Level
Company A created its developmental assessment center in 1995
HIPO when corporate leaders indicated that information management
Information upper-level managers needed help to become general business
A Management
leaders beyond their current technological capabilities. It does not
Managers attach its development program to the promotion or selection process
and Above given sensitivity and vulnerability of assessment.
Company B began its developmental program in June 2002 in five
Global Talent business areas in order to provide intensive feedback to help push
B and Upper employees to the next level. The company uses the as sessment
Management center to expose “blind areas” (areas for development) through
participation and feedback.
Director In 2003, Company D began using internal assessments for directors
D Level and and above both as interventions and for assessment/development
Above purposes.
Center Audience and Confidentiality
Supporting the trend toward employee development rather than selection, literature
indicates that confidentiality of assessment center feedback is essential for
participant development. Confidentiality creates conditions of psychological safety
for the feedback recipients necessary for their development.10
Confidentiality a Priority at Company A—While research highlights the benefits of
maintaining feedback confidentiality, only Company A provides confidential results,
as noted below. The company encourages, but does not mandate, that employees
provide a summary of their assessment results to their manager. The following table
depicts the recipients of assessment center results at profiled companies:
Table 3: The Audience of Assessment Results at Profiled Companies
Recipient of Results A B C D
Participant ü ü ü ü
Senior Manager ü ü
Others Chosen by Participant ü ü
Talent Management Team ü ü ü
 2005 Corporate Executive Board
TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 5
MARCH 2005
Philosophy and Development and Activities and
Audience Management Impact

Center Development and Costs

Companies may develop and design their customized assessment centers and
competencies with the help of consultants and vendors. Additionally, companies
may choose to staff the assessment center with internal assessors and external
assessors hired on contract. This section details the development strategies, costs,
and types of internal and external assessors that profiled companies use to develop
and manage their assessment centers.

Collaborate with Vendors in Design of Center and Competency Models

FIGURE 2: TIMELINE OF COMPANY A’S To maximize resources and avoid reinventing the wheel, companies may choose to
VENDOR RELATIONSHIP involve vendors in the design of their developmental assessment center and creation
of leadership competencies. For example, Bayer worked with the Center for
1995 Creative Leadership to create a three-part program that addresses 13 leadership
competencies , including coaching, adaptability, influencing without authority,
Commission
and decision-making.11
Vendor—
Company A
commissions The majority of companies used consultants to design their assessment center,
Manchester with the exception of Company D. Company D does not have an on-site
Incorporated and
senior Harvard assessment center and instead uses a vendor to conduct a battery of assessment
Business School tests.
faculty to create Create
the assessment Simulations—
Initial Consultant Contributions at Company A—In 1995, Company A’s steering
procedure. Manchester
contracted with committee of information management executives commissioned an outside vendor
Thomsen to create its assessment procedure. In 2002, Company A brought the operations
Group to write and management “in-house.” Company A’s assessment vendor relationship is
assessment
center docum ented on the timeline to the left.
simulations.
Conduct Design and Participant Center Costs
Centers—
Manchester used
Three of the four profiled companies commissioned external consultants to design
its own
subcontractors and staff developmental assessment centers , and incurred design costs between
as consultants, $150,000 and $500,000. The chart below documents the number of competencies
2002
coaches, and tested, vendor contribution to competency development, the initial design costs,
role players at Move and the continuing cost per participant of profiled company centers:
the center. Internally—
Manchester
contract ended
Table 4: Design and Management Costs of Assessment Centers
in 2002, and
Company A Number of Participants Per
2005 hires former Vendor- Sessions
Co. Leadership Design Cost per Participant
Manchester Developed? per Year
consultants to Competencies Session Cost**
manage the $8,000 to
center. A 16 No $500,000 12 8
$9,000
B 16 Yes $215,000 4 to 5 12 $4,250
C 15 No $150,000* Unknown Unknown $2,000*
12 – 20 Partnered Not a
D As needed 1 $3,000
(Varies by Position) with Vendor Formal Center
*Estimation
**Cost per participant indicates the cost of sponsoring one individual in the assessment center,
including costs for compensating external personnel, hotel stays, and processing fees.

 2005 Corporate Executive Board

TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS
MARCH 2005
Philosophy and
Audience
Center Management and Staff
Challenge:
Managing Internal Assessors
Organizations build internal assessors
to institutionalize the process.
However, “assessor burn out” is a
common consequence of using the
same tools over an extended period of
time.
—Mercer Human Resources
Consulting
(21 September 2004)
Solution:
Decentralizing the Center
Organizations reduce the drain on
manager resources with the following
decentralizing steps:
Ÿ Incorporate the assessment
center method into day to day
activities, rather than dedicating
an entire day to a center
Ÿ Allow the assessee to schedule
his/her own meetings with
assessors (managers) over a
period of several weeks
Ÿ Managers incorporate time for
the exercises into their usual
activities
—International Congress for
Assessment Methods
Roundtable Discussion
(May 2000)
PAGE 6
Development and Activities and
Management Impact
Research reveals that companies employ a mix of both internal and external
assessors. Companies may choose to employ internal assessors in order to maintain
company culture, while also employing external assessors to reduce the strain on
internal human resource capacities. Given these advantages, companies balance the
following advantages and disadvantages of both internal and external assessors:
Leverage Internal Assessor Staff
The involvement of internal and senior staff provides invaluable expertise and
support for both the center and the participants. A 2004 Chief Executive survey
finds that organizations reporting a high level of senior management involvement in
centers are more likely to report greater effectiveness of succession management
processes and higher levels of confidence in the organization’s supply of
leadership.12 However, the use of internal staff as assessors can result in a
significant drain of human resources. The following diagram highlights the costs and
benefits of using staff in the internal assessor role:
FIGURE 3: COSTS AND BENEFITS OF LEVERAGING INTERNAL ASSESSORS
Advantages Disadvantages
+ Promotes senior management − May lack objectivity
buy-in − Significant demand on human
+ Possess knowledge of company capital
culture
+ Leverage and recognize internal
talent
Determining Assessor Source—To determine whether to employ internal
assessors, companies should balance the drain on internal resources available for
use in the assessment center with the benefits of inculcating company culture and
senior management buy-in. That said, two of four profiled companies use the
following internal talent in their developmental assessment center:
§ Corporate Psychologist (Company D) § Leaders from the Executive Committee
§ Company Program Manager (Company B)
(Company B) § Trained Organization Development Staff
(Company D)
Employ Expert External Assessor Staff
In addition to select internal staff, profiled companies also employ external
consultants and executives to participate as assessors and trainers in their
assessment process, as detailed below:
§ Consulting Psychologists (Company A, § Trainers and Executive Coaches
Company D) (Company A and Company B)
§ Retired Internal and External
Executives—(Company A)
Organizations confront the following benefits and costs when choosing to employ
external assessors:
FIGURE 4: COSTS AND BENEFITS OF EMPLOYING EXTERNAL ASSESSORS
Advantages Disadvantages
+ Trained and qualified external − Not familiar with company
experts culture
+ Reduces internal human capital − May reduce view of legitimacy
resource requirement and support for assessment
+ Accurate and unbiased view process
 2005 Corporate Executive Board
TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 7
MARCH 2005

Philosophy and Development and Activities and Impact

Audience Management

Center Structure and Activities

The structure and components of company assessment centers vary depending
upon center philosophy. Most profiled companies use role plays during the center
and provide training sessions following the assessment experience. This section
details the structure, component activities, and tests within profiled company
assessment centers, as well as participant feedback and the ROI of profiled
company centers. Profiled center components are provided in the chart below:

Benefits of Developmental Table 5: Assessment Center Component Details

Assessment Centers Purpose of Center Number of Number of Number of Exercises
Co.
Center Length Participants Assessors Competencies and Tests
While assessment centers are unable Ÿ Role Play
to effectively evaluate the A Develop 1 Day 8 6 16 Ÿ MBTI
competencies of work standards and Ÿ Hogan
motivation, centers exhibit the Ÿ Role Play
following benefits: Ÿ Group
B Develop 3 Days 12 9 16 Exercise
ü Provide insights beyond those Ÿ Interview
that can be gained by quicker, Ÿ Training
easier methods such as paper- C Select 3 Days Unknown Unknown 15 Unknown
and-pencil tests and interviews
ü The use of outside professional Ÿ MBTI
assessors provides an accurate D Develop
3 hrs –
1 1 12 – 20 Ÿ FIRO-B
and unbiased view of 2 Days Ÿ 360-
competencies Degree
ü Participants perceive the
assessment center as being fair,
job relevant, and accurate
ü Assessment centers allow for an Include Multiple Assessment Center Components
accurate comparison of people
throughout the world based on The content of assessment center programming differs according to the center’s
the same dimensions philosophy, number of competencies tested, and methods of testing. As tools for
—Training & Development development, assessment center exercises measure desirable traits or skill gaps,
(May 2000) without regard for actual job title or responsibility. Companies may employ the
following assessment and development tools during assessment:13

§ Critical Thinking Assessments § Problem -Solving Activities

§ Leaderless Group Discussions § Role Plays/In-Basket Exercises
§ Motivational Fit Exercises § Structured Interviews
§ Personality Assessments

Assessment Center Case Example

A telecommunications firm with more than 100,000 employees profiled in past

Council research uses the following role play exercise developed in conjunction with
Development Dimensions International:

FIGURE 5: ROLE PLAY EXERCISE AT L ARGE TELECOMMUNICATIONS COMPANY

1. Role Play 2. Board Presentation 3. Accompanying Tests

Ÿ Individual takes on the Ÿ Individual presents Ÿ Highland’s Abilities Battery

role of a CEO for three business plans to a Ÿ Complexity of Information
hypothetical years fictitious board Processing
Ÿ Examine business plans (assessors) Ÿ Hogan’s Personality
Ÿ Make recommendations Inventory
Ÿ Specialized 360-degree tool
 2005 Corporate Executive Board
TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS
MARCH 2005
Philosophy and
Audience
Center Structure and Activities (Continued)
þ RECOMMENDED READING
Grow Your Own Leaders:
How to Identify, Develop, and Retain
Leadership Talent
William Byham
Financial Times/Prentice Hall
2002
Details: Covers every phase of
executive development and succession,
introducing high-impact, no-bureaucracy
at work.
Available: www.amazon.com
PAGE 8
Development and Activities and Impact
Management
Three of the four profiled companies offer, or will offer, in-house developmental
assessment centers. Company A, Company B, and Company C do not vary the
structure of the center by position, as each individual is responsible for the same
competencies. The following diagrams outline the length, structure, and exercise
content of the assessment centers at Company A and B:
Company A’s Assessment Center—Company A includes its one-day assessment
center in a multi-day overall development program. The center assesses the
participant’s grasp of Company A’s 16 competencies with six role play exercises and
a six person panel of retired senior executives, as described below:
Elements Timing
Six role play exercises—Total simulation approach to First
assessment that integrates exercises into scenarios Day
Report—The executive coaches create a ten page report for That
each participant over night. Night
Follow-Up Training—Participants have the opportunity to
Follow
attend a five-day follow up development session at the Harvard
Up
Business School
Company B’s Assessment Center—Company B conducts a 2.5 day assessment
centered on a common role play scenario, including a business case, group
exercise, and an individual interview separate from the role play scenario. The
company assesses 16 leadership competencies as participants experience the
following center elements:
Elements Timing
Dinner and Preparation—Participants dine together and spend
two hours reviewing preparatory material on an overarching Evening
scenario of a fictive corporation
Role Play/Business Case—Individuals participate in a role play
for the first and second activity in which the consultant plays a
partner First
Group Exercise—Individuals participate in a team discussion Day
with a problem to solve that results in a presentation the second
day
Group Presentation—The participant group presents its
business case with regard to the business problem exercise on
the first day Second
Individual Interview—Each individual participates in an Day
interview independent of all other exercises conducted by
company senior management
Communications Training—If the participant desires, she or Morning
he may meet with the training consultant to review a video tape of the
of the participant’s center activity. The consultant offers training Third
and tactics for improved communication and body language Day
 2005 Corporate Executive Board
 TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 9
MARCH 2005
Philosophy and Development and Activities and Impact
Audience Management
Center Tests

Companies use standardized intelligence and behavioral tests in conjunction with

Ability Testing Prevalence
assessment centers. The most common standardized employment tests assess
About 50 percent of companies use intelligence and may include segments evaluating candidates' reasoning, memory,
standardized employment tests, and
comprehension, and numerical abilities. Research data show that the combination
roughly 70 percent engage in some
sort of ability testing. of intelligence data and behavioral observations provides a markedly better means
of evaluating employees than either used alone.14,15
—Corporate Counsel
(September 2003)
Balance Center with Behavioral and Cognitive Tests

To determine accurately the competencies of assessment center participants,

Company A and Company B use the following behavioral and cognitive tests:

Center Test Vending Information

§ Meyers Briggs Type Indicator—Measures a person’s preferences, using four
FIRO- B Assessment basic scales with opposite poles : extraversion/introversion, sens ing/intuitive,
http://www.careers -by -design.com/firob.asp thinking/feeling, and judging/perceiving (Company A and Company D)
Myers Briggs Type Indicator § FIRO-B Assessment—Reveals the leadership and management style of
http://www.careers -by -design.com/mbti.asp participants through assessment. (Company D)
Hogan Personality Test § Hogan Personality Tests—Illustrates a participant's natural advantages and
http://www.hoganassessments.com/HPI.aspx their potential challenges in a job or business setting (Company A)

 2005 Corporate Executive Board

TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS
MARCH 2005
Philosophy and
Audience
Assessment Feedback and Impact
Measuring ROI at Bell
Researchers at Bell calculated the
“bottom-line” impact of promotion
decisions based on assessment center
information versus decisions based on
criteria extracted from other methods
using the following methodology:
1. Gathered performance
information provided by more
than 700 line managers over four-
year period
2. Combined data on validity and
cos t of the assessment center
with the dollar-valued job
performance of first- level
managers
3. Produced an estimate of the
organization’s net gain in dollars
resulting from the use of
assessment center information in
the promotion process.
—“Assessment Center Method,
Applications, and Technologies”
(May 2000)
Challenge and Solution:
Negative Center Feedback
Challenge —While only using
developmental assessments for one
and a half years, Company D received
negative feedback from its first round
of assessment tests.
Solution—The interviewee at
Company D suggests that the
company might have avoided negative
feedback by providing broader
education on the purpose and
implications of assessment center
results .
PAGE 10
Development and Activities and Impact
Management
According to William Byham’s “Assessment Center Method, Applications, and
Technologies,” Bell gained $13.4 million over a four-year period in job performance
improvement of the 1,100 new managers that completed its developmental
assessment center.
Unlike Bell, profiled companies find it difficult to quantify the impact of assessment
centers and the assessment process on the leadership development and succession
management process. The following information reflects the qualitative participant
and company feedback regarding their assessment center experiences, as well as
limited data on the quantitative return on investment.
Soliciting Feedback
The three profiled companies with assessment center operations report both positive
and negative feedback from the assessment center process. Company A and
Company B received significant support from senior executives and participants, as
described below:
Company A
“One of the finest programs of its kind at Company A.”
“Considered very, very fair, memorable, and highly instructive by participants.”
“Tremendous high-level support.”
Company B
“Videotaping participants for training purposes has been the best thing we have done.”
Company D
“Some participants knew they were successful in their careers, but the cognitive tests
showed they were below average in some components. The negative reaction by the
participants slowed down the assessment center development process.”
Calculating Return on Investment
As the interviewee at Company B noted, determining quantitative return on
investment for assessment centers is difficult, especially in the initial years when
performance tracking is incomplete and inadequate. However, both Company A and
Company C established distinct means of calculating ROI, as demonstrated in the
table below:
Table 6: Center ROI at Profiled Companies
Company Impact of Assessment Center
§ Pool of future vice presidents and CIOs has grown from 1 or 2
prospects a year, to at least 30.
A
§ Within 12 months, top leaders gained a much better understanding
of the talent within their organization.
B No data yet available
C § Intends to assess competencies every year to determine the impact
of the center on participants.
D No data yet available
 2005 Corporate Executive Board
TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 11
MARCH 2005

T HE R ESEARCH PROCESS IN BRIEF

Research The Corporate Leadership Council conducted a comprehensive search of published

Methodology materials regarding the subject of developmental assessment centers , drawn from
previous Corporate Executive Board research, trade press journals, other research
organizations, and the Internet. Council staff then interviewed four human resources
professionals at different organizations. These individuals discussed their
developmental assessment center program . This report represents the findings from
secondary and primary sources.

Project Aims 1. What is the philosophy behind the use of assessment centers organizations?
Are they used primarily for developmental or evaluative purposes? Pre-hire
assessment?
2. What is the target audience of assessment centers? What are the target
positions?
3. Do organizations purchase an off-the-shelf product from a vendor, work with a
vendor to develop a customized solution, or develop the center solely in-house?
4. What is the approximate cost of using a vendor?
5. Do organizations manage the assessment center using vendor personnel or with
internal resources?
6. If organizations use vendor personnel, what is the approximate cost per person to
maintain the center?
7. What type of personnel do organizations use to staff internal assessors?
8. What is the length of assessment centers? Does the length of assessment
centers vary by the position of the individual being assessed?
9. How many exercises do organizations include in the assessment center?
Does this number vary by position?
10. What types of tests do organizations use?
11. Do organizations use internally developed competency models or work with
vendors to develop the competencies being assessed?
12. Do organizations realize a significant return on investment from the use of
developmental assessment centers?

Guide to Tables and Figures Table 1: Developmental Assessment for Selection Philosophy Page 3
Table 2: Developmental Assessment Philosophies Page 4
Table 3: The Audience of Assessment Results at Profiled Companies Page 4
Table 4: Design and Management Costs of Assessment Centers Page 6
Table 5: Assessment Center Component Details Page 7
Table 6: Center ROI at Profiled Companies Page 10

Figure 1: Determining Center Participants at Company C Page 3

Figure 2: Timeline of Company A’s Vendor Relationship Page 5
Figure 3: Costs and Benefits of Leveraging Internal Assessors Page 6
Figure 4: Costs and Benefits of Employing External Assessors Page 6
Figure 5: Role Play Exercise at Large Telecommunications Company Page 8

 2005 Corporate Executive Board

TRENDS IN DEVELOPMENTAL A SSESSMENT CENTERS PAGE 12
MARCH 2005

Professional Services
The Corporate Leadership Council has worked to ensure the accuracy of the information it provides
to its members. This project relies upon data obtained from many sources, however, and the Council
cannot guarantee the accuracy of the information or its analysis in all cases. Further, the Council is
not engaged in rendering legal, accounting or other professional services. Its projects should not be
construed as professional advice on any particular set of facts or circumstances. Members requiring
such services are advised to consult an appropriate professional. Neither Corporate Executive Board
nor its programs is responsible for any claims or losses that may arise from any errors or omissions in
their reports, whether caused by Corporate Executive Board or its sources.

1
Joel Schettler, "Building Bench Strength," Training (June 2002). (Obtained from Lexis-Nexis).
2
Author Unknown, "Succession Management: Filling the Leadership Pipeline," Chief Executive (April 2004).
(Obtained from Factiva).
3
Corporate Leadership Council, Voice of the Leader, Washington: Corporate Executive Board (2001).
4
Author Unknown, "Succession Management: Filling the Leadership Pipeline."
5
Sarah Butcher, "How to Gain an Edge at Assessment Centers," eFinancialNews (16 April 2003).
(Obtained from Lexis-Nexis).
6
William Byham, "Leadership: How to Create a Reservoir of Ready-Made Leaders,"
Training & Development (March 2000). (Obtained from Lexis-Nexis).
7
Joel Schettler, "Building Bench Strength."
8
William Byham, "The Assessment Center Method, Applications, and Technologies,"
Development Dimensions International (May 2000). (Obtained through www.assessmentcenters.org).
[Accessed 27 February 2005].
9
Joel Schettler, "Building Bench Strength."
10
Sylvester Taylor, "A Question of Leadership," Leadership in Action (May/June 2003). (Obtained through EBSCO).
11
Heather Johnson, "Leveraging Leadership," Training (January 2004). (Obtained through ProQuest).
12
Author Unknown, "Succession Management: Filling the Leadership Pipeline."
13
Joel Schettler, "Building Bench Strength."
14
Frank J. Landy, Ph.D., "The Best Assessments; Standardized Testing Can Reveal the Right Candidate for the Job—
But Handle with Care," Corporate Counsel (1 September 2003). (Obtained from Factiva).
15
William Byham, "Assessment Center Methods."

 2005 Corporate Executive Board