Whether an organization is recruiting, raising the pay of existing workers, or promoting them to new positions, reliable indicators of current and potential employee value are required to make good business decisions. Despite this, reliable performance assessment methods have remained elusive, miring companies’ success in a bog of uncertain outcomes. This paper delves into the statistical backbone of performance assessments, finding evidence of widespread disagreement and confusion. While most assessment techniques seek to either mitigate the effect of the work environment or ignore it, a fundamental and consistent flaw is the failure to truly separate context from performance. Deeper analysis reveals that context is in fact inseparable from performance – it is the thing being performed.
Even as companies have experimented with case interviews, behavioral interviews, group discussions, and computerized testing, the practice of recruiting has maintained a dismal track record in almost every industry. The problem isn’t with inadequate assessments, but because most organizations are looking for the wrong thing.