This research illustrates the power of empirical approaches to talent management. First study shows the statisticl linkage of competency proficiency to the performance of IBM's top 300 excecutives. Second study demonstrates the power of assessment, and how it paid off in revenue terms when applied to the selection of large account managers. Presentation was made on the maiden broadcast of the Conference Board's Human Capital Watch in October 2011.

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Human Capital Watch
October 2011

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Michael N. Bazigos, Ph.D.
Strategy and Change Executive
IBM
Holds global responsibility for internal and external
initiatives related to workforce and leader
effectiveness in an enterprise with over 400,000
employees doing business in 170 countries,
including 45,000 leaders
Current focus areas include assessment of key
leader populations, competency and development
strategy, with special focus on the performance of
sales executives globally and in “growth countries”
Currently an adjunct professor at Columbia
University’s Department of Organization and
Leadership

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The IBM Leadership Framework
Linkage Research in Talent - Bazigos
© 2011 IBM Corporation

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Competencies Explain Most of What Matters to
Performance
Linkage Research in Talent - Bazigos
© 2011 IBM Corporation
Relative contributions of competencies to performance
Factors Influencing Performance Ratings Breakdown of the 56% Competency
Portion
All underlying correlations statistically significant. Odds of a chance finding are less than 1 in 100.
Data sources: I&VT 360-degree competency ratings (“Total Others”) and BTLR performance ratings.

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Does a 56% linkage matter? Depends; compared to
what?
Linkage Research in Talent - Bazigos
© 2011 IBM Corporation
LINKAGE r % variance
explained
Smoking and lung cancer after 25 years* .08 < 1%
Antihistamines and reduced nasal discharge* .11 1%
Ibuprofen and pain reduction* .14 2%
Height and weight of US adults* .44 19%
SAT (verbal) and freshman GPA** .47 22%
SAT (math) and freshman GPA** .48 23%
IBM Competencies and executive performance .75 56%
* Hogan, R.T. (2011). Issues, controversies, and advancements in workplace assessment . Panel discussion at the 2011 Conference of
I/O Psychologists, Session #193.
** http://fairtest.org/sat-i-faulty-instrument-predicting-college-success

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The performance of MDs who are recommended by
assessment far exceeds the performance of those who
are not recommended.
Linkage Research in Talent - Bazigos
© 2011 IBM Corporation
History
suggests an
multi-billion
dollar 3-year
gain for MDs
using a new,
robust
assessment
(Based on revenue
CAGR gain for
“Recommended”
segment of
incumbents against
the other two
groups)

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Our stress test retro-”selected” top 39%. Resulting
success rate of 82% is in line with (and exceeds) industry
benchmarks when discriminating at the 40% level.
Linkage Research in Talent - Bazigos
82%
IBMBenchmark
Source: “Business value of employee selection”, Wayne Cascio, 11/2009, NYC to METRO Applied Psychology Association
© 2011 IBM Corporation

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This result compares favorably with external estimates of
selection success rates for executives
Linkage Research in Talent - Bazigos
© 2011 IBM Corporation
33%
50%
60%
70%
82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Peter Drucker
estimate (1985)*
Hogan, Hogan
& Kaiser (2010)*
BEI assessment
method (Consultant)
Jack & Suzy
Welch (2007)*
New IBM
MD assessment
(2009)
•Source: Hollenbeck, G. (2009). Executive selection: What’s right… and what’s wrong. Industrial and Organizational Psychology, 2, 130–
143. Retrieved from http://www.turknett.com/sectionS/documents/ExecutiveSelection_001.pdf

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IBM’s Workers Beyond Borders report and Getting
Smarter About Your Workforce report
can be downloaded at:
The Conference Board
www.conference-board.org

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Human Capital Watch for October 2011
The Human Capital Practice @ The Conference Board
This Month’s Human Capital Watch Focus: Human Capital
Analytics
History of Human Capital Analytics
Analytics, Measurement & Evaluation
Approaches to Human Capital Analytics
Human Capital Analytics Roundtable
Next Month’s Human Capital Watch

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Featuring
Rebecca Ray, Ph.D. (The Conference Board)
Michael Bazigos, Ph.D. (IBM)
Jac Fitz-enz, Ph.D. (Human Capital Source)
Julia Gomez (JetBlue Airways)
Patti Phllips, Ph.D. (The Conference Board, The ROI Institute)
Roundtable Discussion