Development Centre or Assessment Centre: What’s the best way to grow top talent?

What’s the difference?

In today’s world, organizations are increasingly investing in talent development programs to enhance their employees’ skills, capabilities, and potential. Organizations use two common types of programs: Development Centres (DCs) and Assessment Centres (ACs). Although these two programs may seem similar, they are fundamentally different in their purpose, methodology, and outcomes.

My own involvement with ACs and DCs

Through out my career, I have had the opportunity to both participate in, and design and deliver, assessment centres (AC) and development centres (DC). Early on, I was originally very much on the assessment side of the equation. Looking back, I realise just how far I have now moved to the other end of the spectrum. Having experience of both however, is definitely an advantage.

My first exposure to ACs came when I worked in corporate HR for HJ Heinz in the early 1990s, while Head of Compensation. At the time, ACs were a popular method for selecting and assessing candidates for leadership positions, and I saw first hand how this process could be used to identify top performers and potential leaders within the organisation. Although, I also saw just how problematic meaningfully differentiating individual levels of talent and performance could be.

Later, in the late 1990s, I worked as a Regional Director of management consultancy HayGroup, where I had the opportunity to work on the design of ACs and DCs as part of more integrated client solutions. One notable project involved the design of an AC following the acquisition of Japan’s Daiyaku Insurance by Canadian firm Manulife. This project challenged us to adapt the AC process to a different cultural context and incorporate local nuances into the design. A robust method of selection was needed to select for top positions and the process had to be robust enough to be acceptable to both sides of the M&A deal.

In the early 2000s, as part of my board role with New World Cyberbase, I helped to build a DC to support the development of CEOs in our portfolio. This experience made me realise how valuable leadership development and entrepreneurship training was for inexperienced tech founders.

Later, as a board coach, I had the opportunity to design DCs for the Nielsen leadership development program in 16 countries across Asia. One of the most memorable DCs that I helped to design was for Heineken, in Indonesia and Vietnam. For three years, we ran the DC in the Javanese rainforest, incorporating wider ecological awareness, yoga, and mindfulness. This experience taught me the importance of incorporating diverse perspectives and practices into the DC process to promote holistic and sustainable development.

I have also supported many coaching clients through the experience of being a participant of ACs during key promotion and selection events. In my observation, the quality of these Acs has been highly variable, with sometimes poorly designed tools and exercises leading to arbitrary decisions and misguided feedback. For instance, in one case, a board member was hired to bring about culture change and a more human-centred approach, but was rating negatively for being insufficiently focused on the bottom line. There was therefore a mismatch between the strategic intention and the direction of the feedback.

The more I have been involved in DC design, the more I realise just how crucial it is to access the human qualities and creative potential of people, which is so often “processed out” through management systems, “punishment-by-rewards”, and bureaucratic controls.

Development Centres – Going for Growth

DCs are designed to promote deep reflective learning and development, where confidentiality and trust in the analyst/coach are of utmost importance. These programs aim to facilitate self-awareness, self-reflection, and personal growth by providing participants with a safe and supportive environment to explore their strengths, weaknesses, and potential.

In a DC, a great deal of weight is placed on the self-assessment and the perspectives of various sources of feedback, such as the Board, staff, peers, customers and investors. However, the focus is not on ranking or selecting individuals but on developing their deep-seated skills, knowledge, and competencies that enable them to take on larger or more complex roles in the future.

The outcomes of a DC are often less clear-cut, but they are more deep-seated and authentic, leading to long-term personal and organizational growth.

On the other hand, ACs identify individuals who possess the necessary skills, knowledge, and competencies to perform specific job roles, either the one they’re being hired for, their current job or the next step up.

Assessment Centres – on target selection

ACs are primarily designed to evaluate and rank candidates for selection purposes. The focus is on identifying the best candidate for a particular job role based on predetermined criteria, such as job fit, cultural fit, and potential. In an AC, participants are typically assessed through a series of standardized exercises, simulations, and interviews. The outcomes of an AC are measurable, but they are less likely to generate significant development outcomes.

Coaching-led vs Consultant-led

One of the key differences between a DC and an AC is the methodology used. DCs are more coaching-led, whereas ACs are more consultant-led. In a DC, the analyst/coach works closely with the participants to identify their strengths, weaknesses, and development areas. The coach provides feedback, guidance, and support throughout the program to help participants achieve their developmental goals. In contrast, an AC evaluates and ranks individuals based on their performance in standardized exercises and simulations.

Gaming the system

Another key difference is the behaviour of participants. In a DC, participants have good reason to be transparent about their development needs with their analyst/coach. The program is designed to help them grow and develop their skills. However, in an AC, participants are likelier to demonstrate contrived or inauthentic behaviours to “game the system” and score more highly in the rankings. This is because the focus is on selecting the best candidate for a particular job.

Role of HR

It is important to note that in an AC, the assessment results are often fed back to HR and the line manager. This feedback may impact the participant’s behaviour in the AC exercises, as they may try to present themselves in the best possible light to secure a job offer or promotion. This can lead to contrived or inauthentic behaviours that do not accurately reflect the participant’s true capabilities.

Skin in the Game

Furthermore, even though an organizational psychologist may be involved in an AC, they may work for search consultants, compromising their independence and neutrality. Search consultants have a vested interest in finding the best candidate for the job, which can create a conflict of interest when providing objective feedback to the participant.

In contrast, DCs are often run by boutique research companies with no “skin in the game” and no vested interest in the outcomes beyond advancing talent development in their client organizations. A DC focuses on providing a safe and supportive environment for participants to explore their strengths, weaknesses, and potential without the pressure of competing for a job offer or promotion.

Relationship with Coach

In a DC, the analyst/coach works closely with the participant to provide feedback, guidance, and support throughout the program to help them achieve their developmental goals. This can lead to deep-seated and authentic outcomes that can have a long-lasting impact on the individual’s personal and professional growth.

Market Shifts

In recent years, as hiring has become more competitive and intensified, there has been greater use of ACs than DCs. Search firms acquired DCs to access their intellectual property in measurement science and beef-up their focus on selection.

Korn Ferry acquired market leader The HayGroup,
Spencer Stuart acquired Cambria, based in Boston, USA;
Saville & Holdsworth were acquired by WTW.

This has left a gap in the market for truly developmentally focused firms independent of search and selection decision-making.

We need transformational competencies

The need to develop deep transformational competencies to tackle sustainability, culture change, social inequality and trigger innovation and growth suggests that companies should consider investing more in DCs. DCs offer a more objective and neutral approach to talent development, focusing on authentic and long-lasting outcomes. Investing in DCs can help organizations to develop a culture of continuous learning and growth, which is essential in today’s fast-paced and rapidly changing business environment.

Summary

In summary, while DCs and ACs may seem similar, they are fundamentally different in their purpose, methodology, and outcomes. Companies need to be clear about the purpose of either a DC or an AC. DCs promote deep reflective learning and development, whereas ACs are primarily designed to evaluate and rank candidates for selection. Both have a role to play, but companies need to be clear about the purpose of either a DC or an AC and invest accordingly to develop a culture of continuous learning and growth within their organization.