4 - How well does your instrument predict success on the job? Explain

The goal of the POP is to predict both performance and retention. We have conducted hundreds of predictive validation studies with all types of distribution systems. SMG conducts an annual study for each client with the goal to improve the predictive capability of the selection process. This creates a continuous improvement model and provides an organization with ongoing knowledge about the effectiveness of recruiting sources, screening criteria, selection tools and retention strategies.

The SMG research team continually collects E.E.O. data to ensure compliance with all guidelines and legislation. For individual clients, we have included data from the complete recruiting process to ensure compliance of all the components of a process. These studies have demonstrated that the POP is fully compliant and the database adds credibility to a client's system and supports the objectivity of a client's hiring practices.

We have a validation manual, sample studies, executive overviews and marketing materials that highlight the predictive capabilities of the POP. SMG has the largest database (over 2 million) of candidates in the financial services industry. A significant number of these candidates were hired and their performance and retention data were used to validate our predictive models.

The validation study includes a written report that highlights the success factors across the total company, at a regional level and a branch level. This can help tailor the selection criteria to any differences within an organization. The validation results can then be used as the benchmark to compare new recruits and programmed into a customized page in the POP report.

From a statistical perspective, insurance companies that use the POP as part of their selection process have on average double the 4 year retention of the industry average. As a predictor of performance, if the POP is predicting superior performance, survival rates are typically in the 90-95% range. The Predictor Score (PS) on the POP typically displays a linear relationship to actual performance. For example, low performers who had an average PS score of 23 achieved only 75% of the sales objective, average performers who scored 32 on the PS achieved 100% of the sales objective and the high performers who averaged 42 on the PS achieved 150% of sales objective.

In summary, the POP can improve both retention and performance simultaneously. Many selection systems tend to improve performance at the expense of retention or retention at the expense of performance. Through our validation studies, which provides for a continuous improvement model, our clients have realized significant growth in both number of agents and production per agent.