Potential and Performance Measurement via Predictive Assessment

1. Potential and Performance Measurement via Predictive Assessment Presented By: Scott Hudson – VP of Sales/Marketing

2. Planned Agenda

3. Chally Overview

5. Dayton, Ohio based with 37+ years of R&D experience • Founded through a Grant from U.S. Justice Department • Purpose - to develop an assessment to improve the selection of Law Enforcement Officers to minimize impact of the pending EEOC law • Terms of the Grant outlined that Chally could build a business around the assessment and we decided to focus on helping clients select more productive Talent

6. The core assessment initially focused on personality and motivation • However we quickly discovered, via research conducted with our clients, that just because you are extroverted, assertive and competitive, • It doesn’t mean you can sell, lead or manage! • It just means you are extroverted, assertive and competitive!

7. Targeted Marketing based on buying patterns Credit Scores Life Insurance Las Vegas handicapping SAT & ACT • We decided to re-tool the assessment and leverage the predictive capabilities of the Insurance Industry which utilizes actuarial sciences • Actuaries are experts in evaluating the probability of future events—using numbers, not crystal balls to design creative ways to reduce the likelihood of undesirable events

8. Decision Making Accuracy Political Astuteness Profit Consciousness • The Actuaries stated; throw out the “Personality” theory and to research KEY Talent to determine what they do (skill) versus how they behave (personality) to achieve outcomes • Our Research found that successful performers depending on the role, perform competencies such as; • We studied large groups, had them take the “re-tooled” assessment with Non Face-Valid questions and applied an actuarial approach to measuring/predicting likelihood of successful performance

9. Takes responsibility for results as an entrepreneurial manager Management Ambition Profit Conscious Maximizes Results Develops Technical Competence Team Orientation Makes Presentations Problem Solving Has ability to verbally inform, persuade and motivate Promotes Growth Through Innovation • As we continued to work with clients, we uncovered many different competencies/skills/behaviors • Currently, we have an unparalleled database of 140+ validated competencies based on scientific research • Spend 45 minutes answering 288 questions; we collect 866 points of data and predict the performance of a person, team or organization on over 140+ validated competencies

10. You must decide what competencies you are planning to measure and then have research to support they are important

11. Talent Measurement Solutions Support:

12. Why Benchmarking and Traditional Competency Modeling Can Fail 2009 Listing of World’s Top 10 Golfers The following “logical” benchmark competencies (supposed predictors of success) are officially tracked to measure professional golfers as a measure of success;

13. Traditional Methods Don’t Always Work! Would results like this get you excited about selecting this person? These were Tiger Woods’s resultswhen he was #1 Golfer in World! REJECTED #93 in driving accuracy #38 in driving distance #71 in greens in regulation #68 in ball proximity to hole #9 in scrambling #38 in putts per round • These “competencies” do not predict – scores do! • What makes Tiger different is he didn’t make fatal errors!! Emphasis on didn’t!! • How few bogeys, double bogeys, or worse they don’t get...round after round after round

14. False Predictors in a Leadership Position Job Competency model that was not working successfully for Fortune 500 company that was developed by Global HR Consulting Firm

15. It All Starts with a “Profile(s)” A select group of skills/competencies that statistically differentiates performance • To develop custom profile(s) we follow the entire process below (1-3) • If desire is more future state and/or performance metrics are not available we utilize Step (2-3) • Process takes 4-8 weeks depending on specific client requirements

16. Examples of Competencies within Custom Leadership Profile for Chally Client Predictive Probability of Success Descriptive

17. Example of a Competency Definition

18. If Ready to Utilize the Assessment as Part of Development/Selection Process Assessment Applications…

19. Organizational Development Talent Audit + Multi-Rater Performance Trac

20. Talent Audit/Performance Trac Good for: • Developing a talent management database to mine for future candidates • Setting up a high potential/succession planning program to laser focus development • Reorganizing departments/functions and/or going to a new strategy • And you need to know: • Who has the best potential to fill critical leadership positions? • What leadership talent do I have? • What training and development will have the most impact? • What support will my leaders need to succeed? • Who are my future leaders and what development will they need? • Whom should I select for my next leadership opening? • How do I best leverage top-grading (low performance and potential) to enhance my leadership team?

21. Profiles/Roles Against as many Client specific/Chally Tailored Leadership related profiles to effectively and objectively measure/predict success

22. Skill Scoring • Do not think school grades where 58 = F. This is not a percent correct scoring convention • Scores are percentiles so a score of a 58 indicates the person has higher potential than 58% of all others in the database • A low score does not mean the person is incapable of performing the skill. It means it will be harder for them than for people who have high scores • Do not think school grades where 58= F. This is not a percent correct scoring convention • Scores are percentiles so a score of a 58 indicates the person has higher potential than 58% of all others in the database • A low score does not mean the person is incapable of performing the skill. It means it will be harder for them than for people who have high scores • Example — if two people have the same job, such as changing ceiling light bulbs • If one is tall and one is short — the shorter person will need a tool/workaround (ladder) to help them successfully accomplish the job, so it isn't they can’t do it • Because of the need for this workaround, they will need to carry a ladder all day which will be more exhausting for them than the taller person who doesn’t require a workaround

23. Put Potential by Person by Roles • Ability to measure the person, team, or organization against key profiles and sort/slice/dice on your key data/metrics to aid in key Talent Decisions such as: • Move to new leadership roles • Succession for Management • Talent Alignment/downsizing

24. Who can make the move to the next level • Client Example • Business Issue for Client – Identified 22 people as high potential but could only select 10 for Hi Po Development Program for future General Managers • Issue is no current leaders wanted to eliminate their person from process (politics) • TA was used as object measurement and final determining factor for selection into program

25. General Manager Profile Expanded Average overall success probability for each competency within General Manager Profile Overall average success probability for General Manager • New profile more traditional hunter is more challenging for team, overall average and number of people with success declines • Though average skill scores are all above 50th percentile • Ability to focus development where most impactful

26. Performance Trac

27. Performance Trac Good For: A diagnostic tool that integrates core Chally assessment and Multi-Rater development methodologies  • Assessment of Employee Potential + Observed Performance (Multi-Rater), to deliver meaningful and measurable Talent productivity and ROI Focused on diagnosing an organization’s Talent Potential and then measuring its current state of performance to determine if it aligns with the specific talent needs Once the needs/gaps are identified through Performance Trac, you can prescribe training/coaching/development to aid your organization in achieving your strategy and goals with the associates who have the highest probability of improvement

28. Performance Trac Examples • Graham associated with Valuing Diversity—his potential is average at 50, and feedback from everyone else other than his peers has him performing at/above his potential. We would question whether focused development would gain significant improvement, and would propose focused development in other areas. • Donald has high potential (74) associated with Oral Communications, however, he does not feel he is currently performing at an above-average level – neither do his boss, direct reports and peers. This data would suggest focused development for Donald would have significant value and ROI.

29. How you can put this data into action! The Talent Assessment Phasewill include the following Validation of skills that predict success in key roles Assessment system to process, track, and analyze talent potential and current state • Data use via various reports that details likely on-the-job behaviors and their most distinctive motivational characteristics Implementation of a methodology to use the assessment results for talent deployment, selection, and succession planning, and to identify training priorities • The Skill Development Phase will include the following: • Selection of skills identified as capability gaps to be addressed in training • Development, execution, and evaluation of a solid training implementation • Measure Impact

30. Development Individual Profile Report(s) Single Individual compared to one or multiple roles + expanded feedback on individual motivators & work habits

31. Describes the candidate’s candor in responding to questions The Position’s Job Skills Sample • Manager and Employee Assessment Report • TheChally ManagerReport measures an individual’s critical on-the-job strengths and weaknesses relative to the skills of the success profile. Chally highlights key development areas and provides the manager with coaching techniques to strengthen the direct report’s performance based on the identified ‘weaknesses’ in relation to the specific position profile. • The Chally Employee Report has all the features of the Manager’s Report, but offers a narrative explanation instead of percentile scores for each competency, and does not include the bottom-line recommendation.

32. Definition of skill and graphic rating of level of competence Practical coaching tips for training and development Sample Prediction of typical on-the-job behaviors and limitations

33. Motivation or habit that is very evident in the candidate (+70% or -30%) compared to other successfully employed individuals Suggestions for a manager to best focus and motivate the candidate Sample

34. By Implementing Chally’s Talent Performance Measurement Methodology, You Can Move Forward With Confidence! Hire better performers • Reduce turnover, faster ramp-up time, higher productivity, better corporate fit Select better management/leaders • Reduce turnover, better team development, more productive team Align existing people to the roles in which they will succeed • Reduce unwanted turnover • Improve Productivity • Increase customer satisfaction through better representation Move the curve • Improved Individual Development and Ascension/Succession Planning

35. What Our Clients Say About Chally • Predictive and accurate data • Customizable to specific job requirements • Objective findings and analyses • Provides access to an extensive database and research • Helps reduce costly employee turnover ≥ 30% • Helps improve employee productivity ≥ 35% • EEOC-compliant - reduces legal exposure • Data has long-term value Chally’s extraordinary science, applied to measures of Talent performance, enables our customers to realize greater productivity and profitability.

36. Scott Hudson Vice President Sales and Marketing 3123 Research Blvd., Dayton OH 45420 Direct: 937.610.4313 Cell: 513.520.4187 ScottHudson@chally.com www.chally.com

37. Since 1992, Chally has been conducting comprehensive World Class Sales benchmarking studies. • The studies have collected data from over 80,000 business decision makers on over 7,300 sales forces to gain a better understanding of what it takes to become a World Class Sales organization. • The research is uniquely distinguished because it is customer-centric, empirical and represents a comprehensive statistical sample.

38. Chief Executive’s “Best Companies for Leaders” survey, administered in cooperation with Chally • This Global Leadership Research project is the premier effort toward identifying and recognizing excellence in leadership development.

39. Chally’s Clients

40. Independent Research Firms Confirms Chally’s Value • Independent research firms, Aberdeen Group and CSO Insights, have conducted studies revealing that companies who use Chally’s talent management solutions have far exceeded sales performance results compared to companies using conventional/competitors methods. • Chally’s clients rated better year-over-year results in: • Average sale or contract value (5.5% compared to -1.2% others) • Lead conversion rate (4.7% compared to -0.9% others) • Customer renewal rate (4.1% compared to -0.7% others) • Reduction in sales turnover (1.1% compared to -2.2% others) • Reduction in sales cycle (0.6% compared to -3.1% others)

41. CHALLY CUSTOMERS WIN MORE DEALS! An independent research firm confirmed that customers who use Chally’s better science approach have higher win rates!