Insurance Sales Position

Background

Harrison Assessments' is an assessment instrument that is used for selection and development. It measures 130 different characteristics of an individual. In addition it formulates the requirements of a particular job and compares the individual to that job. It offers a final score between zero and one-hundred which represents the degree of suitability of a person for a particular job. A score of one-hundred represents a person who is completely suitable for a particular position, while a score of zero represents a person who is completely unsuitable for that position. Assuming the person is eligible for a position (has the education, experience and technical skills), a suitability score of 75 or greater represents a person who is considered likely to perform effectively in that position. A score of 74 or less represents a person who is considered to be unlikely to perform less effectively than average in that position. The data was collected by Dan Harrison (Ph.D.) and the performance ratings were given by four different nationwide insurance companies between 1992 and 1995.

The aim of the case studies below was to determine the degree of predictive accuracy of Harrison Assessments' for the insurance industry. These studies were conducted in 4 different companies and represent 102 subjects. This was achieved by comparing the Harrison Assessments' suitability score (using the insurance sales template) with the person's actual performance. The performance rating was given by a group of supervisors for each agent that competed the Harrison Assessments' profile.

Performance ratings

Each company was instructed to have a random sampling of employees from their company complete the Harrison Assessments' questionnaire (a range of excellent to poor performers). Each of those employees was then rated by the company according to their job performance. The following scale was used:

90-100
Excellent to Best - considering the amount of experience
80-89
Excellent to Best - considering the amount of experience
70-79
Average to Good - considering the amount of experience
60-69
Below average - considering the amount of experience
40-59
Poor - considering the amount of experience
Below 40
Failed or will soon fail in the position

The companies were asked to provide this rating given the length of time the person has been in the position. This was to control the variable of the level to which the person had already established his/her market contacts. (see Appendix A - Performance guidelines). The lowest performance rating given by any of the companies was 50%.

Predictive accuracy

A prediction is considered accurate if one or more of the following conditions are met:

a) The suitability score is 75 or greater and the performance score is 75 or greater

b) The suitability score is less than 75 and the performance score is less than 75.

c) The suitability score is within 6 points of the performance score.

The logic behind this definition is that, if the suitability score were 75 or above and the person were eligible for the position, it would indicate a prediction that the person would probably succeed in the position. If the suitability score were less than 75 and the person was moderately eligible (not highly eligible) for the position then this would indicate a prediction of below average performance. Also, if the suitability score were within 6 points of the performance score it would indicate a very close prediction and thus should also be considered accurate. The suitability score for each person appears on the template screening in the far right-hand column of the table.

From the research sample, 88 of the 102 Salespersons (86.3%) showed a correlation between the Harrison Assessments' suitability score and performance to be accurate, according to the definition above.

The results show that the template developed is able to predict job success with a high level of accuracy. The sample size was sufficient to gain fairly reliable results, especially considering the close approximation to other research in this industry research.

Appendix A

GUIDELINES OF PERFORMANCE RATING FOR HARRISON ASSESSMENTS' RESEARCHED TEMPLATE

Accurate performance ratings for employees are important in order to achieve an Harrison Assessments' template with the highest possible accuracy. Templates are constructed by comparing the performance ratings of the employees who are currently in the position with their results on the Harrison Assessments' profile. By analyzing the factors related to effective and ineffective performance, we are able to quantify specific requirements for the position and your organization. You will receive the benefit of previous research from similar positions which will verify and perhaps, even in some cases, even modify your results, (if your sample size is small).It is best to profile as many employees as possible for the sample. There should be a variety ranging from good performers to poor performers wherever possible. Each employee in the sample needs to be given a percentage rating between 0 and 100 according his/her performance as related to the following scale:

90-100
Excellent to Best - considering the amount of experience
80-89
Very Good - considering the amount of experience
70-79
Average to Good - considering the amount of experience
60-69
Below average - considering the amount of experience
40-59
Poor - considering the amount of experience
Below 40
Failed or will soon fail in the position

Important note:

The rating should take into consideration the degree of experience that the person has in the position or previous similar positions. For example, if person A (your best performer) has been in the position for 6 years and is selling $750,000 per year of product, he/she should receive a score of 100% (unless your best performer is selling considerably less than you think is possible). Person B is selling only $375,000 per year of product (which is about average) and thus would receive a performance rating of 70-75%. However, if person B has only been in the position for 6 months and has not had previous experience which would enable such good performance so quickly, then you need to consider that person B is actually an excellent performer for the length of time he/she has been in the position. If $375,000 is considered to be excellent performance for having been in the position for only 6 months, then person B should receive a performance rating of around 90% rather than only 70-75%.

A few positions may also have a further complicating factor which should be taken into consideration. If person B is selling insurance and came to the company 6 months ago from a different part of the country, then it should probably be considered that person B is still at least a very good performer because building a client base is very important in this situation. However, if person B has been working in insurance in the same geographical area and has built up a client base in that area for many years, then much of his/her early success may be based on that factor, rather than a 'super start'. In which case the performance rating for person B should be less than if he/she had no previous experience in the same geographical area, (perhaps only 75-80%).