2012. Vol.3, No.6, 500-503
Published Online June 2012 in SciRes (http://www.SciRP.org/journal/psych) http://dx.doi.org/10.4236/psych.2012.36071
Copyright © 2012 SciRes.
Assessment Center Dimensions Predict Performance-Based
Bonus in Business Management Settings
1Gordon College of Educ a tion, Haifa, Israel
2Department of Psycholo g y, Tel Hai College, Tel Hai, Israel
Email: firstname.lastname@example.org, Leehu@telhai.ac.il
Received April 8th, 2012; revised May 4th, 20 12; accepted June 1st, 2012
This study sought to add to the literature on the validity of Assessment centers (ACs) by first examining
the factorial structure emerging from observers’ dimension ratings and then examining their predictive
validity using a performance criterion often unavailable to researchers—performance-based bonus pay-
ment. A series of ACs specially designed for the selection of candidates for entry-mid tier management
positions in a large financial corporate (n = 180) was used as the sampling frame. For candidates who
were promoted to managerial position we gathered bonus information within 6 - 12 months of their pro-
motion (n = 75). The dimension ratings and factorial structure of the AC were examined to reveal a
2-factor structure pertaining to cognitive and interpersonal aspects of performance. Both the original di-
mensions and the two factorial grades showed moderate predictive validity using performance-based bo-
nus as the criterion: The ‘organizational commitment’ dimension best predicted bonus payment (r = .38; p
< .01) and the interpersonal factorial grade best predicted bonus (standardized b = .22 p < .01), followed
by the cognitive factor, after controlling for gender and tenure. The theoretical and practical implications
of the findings are briefly discussed.
Keywords: Assessment Centers; Construct Validity; Predictive Validity; Performance-Based Bonus
Assessment centers (AC) have earned a mixed bag of re-
views and opinions as instruments of employee screening and
selection. Prominent authors view them as either highly effec-
tive, valid measures of predicting future job-related perform-
ance (e.g.: Cascio, 2010; Schmidt & Hunter, 1998), or a prob-
lematic, unstable method yielding inconsistent content and
construct validity indices (Bowler & Woehr, 2006; Melchers,
Kleinmann & Prinz, 2010). Only few, however, will dispute the
impressive criterion-related validity of ACs. Persistent evidence
gathered across time and various target populations point to the
ability of AC-derived ratings to predict and correlate with a
broad range of job-performance indices (Thornton & Gibbons,
2009). Despite abundant evidence some questions linger re-
garding the validity and relevance of the AC method in HR
selection contexts. This paper depicts a field study aiming at
two of them.
The first issue relates to the question of construct validity in
AC indices: the literature proposes that dimension ratings pro-
duced by observers in ACs do not represent assessment of
separate performance-related entities but rather tend to con-
verge into either a single factor (reflecting perhaps a halo ef-
fect), or a set of factors representing the various tasks in the AC
(For a summary of this issue see Thornton & Gibbons, 2009).
Can observers’ impressions and judgments of participant be-
haviors reflect separate job-related entities?
The second issue pertains to the criteria used in AC validity
studies: While the literature on this subject is quite consistent,
most popular criteria measures are subjective such as job-satis-
faction, supervisors’ evaluations, performance appraisals by the
participants and peers, etc. (Arthur, Day, McNelly, & Edens,
2006; Gaugler et al., 1987). Some studies provide additional
criteria to reflect work-related performance indication such as
salary and organizational hierarchy (e.g.: Bray & Grant, 1966;
Jansen & Stoop, 2001). These however, remain sporadic and
less available in the literature, compared with “soft measures”
as mentioned above.
Using bonus payment as a criterion for job-performance
rarely appears in the literature on AC’s predictive validity since
this information may be sensitive and unavailable to researchers.
It does, however, present a potential as an easily quantifiable
indicator of general job performance in for-profit organizations.
The literature on pay for performance models (e.g.: Werner &
Dudley, 2009) suggests a closely supervised practice, in which
a clear set of performance criteria is used to systematically
determine bonus payments. As such it may be an interesting
criterion in predicting job related performance (Ittner, Larcker,
& Rajan, 1997).
The current study examined a series of ACs designed for the
selection of entry-to-mid level managers from the ranks of pro-
fessional employees in a large financial organization offering
investment, insurance and other related services, headquartered
in Israel. The study investigated both the structure of the mea-
sures produced by the observers in the AC, seeking potential
factors and dimensions underlying their judgments and then
looked at the predictive validity of these factors against a sel-
dom available criterion—performance based bonus payments.
We hypothesized that 1) AC dimensions will show a consistent
factor structure that is not global nor an artifact of the AC tools
and, 2) AC dimensions and factors will predict manageri al per-
formance, represented by performance-based bonus.
Settings an d S tu dy Design
The study was conducted in a large financial organization
providing investment services to a broad range of clients, in
Israel. The organization employs about 7000 individuals, about
66% of whom are based in 180 branches nationwide. Data col-
lection took place in a series of specially designed assessment
centers used for the selection of Investments department man-
agers. The position is considered mid-tier management and is
open to inside employees only, typically investment profes-
sionals without official managerial background (though many
have some training in management).
One hundred and eighty candidates took part in ACs for the
above job, after applying for an internal call for candidates, and
passing a basic screening process based on their resumes. Of
the above sample, 75 were placed in managerial positions with-
in 6 month s following the AC. For this sample, ages ranged 29 -
50 (mean age = 41.00; sd = 7.65), 60% were men and 40%
were women. Tenure with the company at the time of applica-
tion ranged 5 - 25 years. They all had at least a Bachelor’s de-
gree and 20% had a graduate level degree or equivalent.
Assessment centers were specially designed for this position
by a team of expert Industrial-Organizational psychologists
working for the organization, to reflect behaviors according to
the job description provided by the organization HR division.
The assessment centers included: 1) A self- presentation task in
which participants planned and performed a time-limited self-
presentation; 2) A discussion group, simulating professional
credit-approva l dilemmas in whic h consensus has to be reached
via discussion; 3) A group “in-basket” assignment simulating
daily assignments of an investment department manager and 4)
A competitive ‘branch promotion event’ assignment in which 2
or more sub-groups competed on designing and presenting the
best promotion event for a new investment product. These tasks,
though tailored for the specific job and organization are based
on widely used paradigms (see for example: Bray & Grant,
1966; Thornton & Gibbons, 2009).
Data from 10 groups (total n = 75) was included in this
analysis. The data was summarized across 6 dimensions rated
by 2 observers (one is an HR specialist and the other an I/O
psychologist from outside the organization). The two observers
discussed each candidate after the AC and reached consensus as
for the grade on each dimension, as well as a general recom-
mendation regarding the candidate’s fit for the position. Grades
were given on a Stanine scale. The dimensions were as follows:
1) General cognitive ability: problem solving, effective infor-
mation processing; 2) Work style: planned, orderly perform-
ance, paying attention to technical details while keeping awa-
reness of the group goals; 3) Interpersonal relations: open, ef-
fective and assertive communication, collaboration and sensi-
tivity to others; 4) Service & Sales orientation: service aware-
ness, perceiving client-oriented service as a priority, identifying
and taking opportunities to broaden the business and customer
base; 5) Organizational commitment: Embracing organiza-
tional values and priorities, identification with the organization
and its interests; 6) Leadership potential: initiating action, as-
suming responsibilities and motivating others. These dimen-
sions fit a model of generalized dimension structure presented
in a meta-analysis of a large number of studies of assessment
centers (Arthur, Day, McNelly, & Edens, 2006).
Demographic data was collected via a short questionnaire.
Data analysis included gender, age, and tenure.
Criterion data—bonus for managerial performance: as a cri-
terion for managerial performance we collected data regarding
the managers’ performance-based bonus, at the end of the year
following the AC. Bonus is calculated and paid by the HR divi-
sion, ranges 0 to 30 units, each unit representing a given per-
centage of the employee’s monthly salary. Bonus is paid once a
year only in branches reaching or surpassing their business
objectives and goals. Differential bonus is awarded based on
profits, and performance appraisal provided by the employee’s
supervisor. Though there is room for personal judgment, bonus
sums are monitored carefully by the corporate office and super-
visors are held liable for the fairn ess a nd perf ormance cong ru-
ency of the process. Thus it is assumed that this data is a valid
indication of managerial performance through the corporate
After obtaining the organization’s approval for data collec-
tion, we retrieved data from the corporate files making sure no
identifying markers are left in the data to allow tracing indi-
viduals, thus assuring anonymity.
The data was then analyzed using SPSS 19.0 (IBM, 2012).
Before testing the hypotheses we examined the distribution
of our main variables and the general associations among them.
Table 1 summarizes descriptive statistics and Pearson’s corre-
lations between the study variables.
The results reveal a distribution of grades and the bonus units
allowing for parametric statistical analysis (Coolican, 2010).
The analysis shows that 5 of the 6 dimension ratings in the
AC correlated positively with the bonus criterion. “Organiza-
tional commitment” showed the strongest association while
“cognitive skills” did not associate with the criterion at all. The
correlations reveal association patterns within the AC dimen-
sions suggesting underlying factors. The correlations also indi-
cate moderate associations between various AC dimension
grades, the AC final recommendation grade and the bonus
We then proceeded to conduct an exploratory factor analysis
(EFA) to reveal potential factors within the AC dimensions.
The Varimax rotated model accounted for 68% of the total
variance suggesting 2 factors. Table 2 depicts the EFA results.
The 2 factor structure matches a conceptual differentiation
between cognitive/intellectual aspects and interpersonal aspects
of performance in the AC. We then calculated a mean score for
dimensions loading on the Cognitive factor and the dimensions
loading on the Interpersonal factor. We used these factorial
scores in a regression analysis, as well as tenure and gender to
predict the bonus value. Table 3 summarizes the results of the
The results show that a multiple R of .36 (p < .01) was ac-
counted for by the interpersonal and cognitive factor grades.
Copyright © 2012 SciRes. 501
Descriptive statistics and pearson’s correlations among the study vari-
ables (n = 75).
sd 1 2 3 4 5 6 7 8
Work style 5.82
.70 .58** -
.71 .09 .30** -
Service & sales 5.50
.77 .23* .31** .58** -
.72 .16* .29** .53** .66** -
Managerial pot 5.99
.75 .52** .44** .26** .44** .27** -
Total AC 5.73
.74 .44** .51** .47** .72** .61** .52** -
6.63 .07 .22* .21* .21* .38** .28** .27** -
*p < .05; **p < .01.
EFA analysis on the AC dimension grades.
Dimension Factor I Factor II
Cognitive .69 –.10
Work style .79 .25
Interpersonal –.15 .85
Service & sales .40 .79
Commitment .03 .76
Managerial pot. .46 .65
Regression coefficients and correlations between the predictors and the
bonus value (in units) (n = 75).
Predictor Simple Pea rso n’s r Standardized
Cognitive Factorial .28** .16*
Interpersonal Factoria l .31** .22*
Gender –.16* –.10
Tenure .07 .05
Multiple R for the en tire model = .36; p < .01; *p < .05; **p < .01.
Gender and tenure did not show any added value in the model,
though simple Pearson correlations were significant for 3 out of
the 4 predictors.
The current study tested two hypotheses: The first posited
that AC dimension grades will reflect job criteria rather than a
general impression (a single factor) or factors representing the
various tasks in the AC. This hypothesis was supported by our
analysis, suggesting 2 underlying factors accounting for 68% of
the variance in the AC dimensions. The factors pertained to
skill type (cognitive vs. interpersonal) rather than task type.
These results suggest that AC observers are capable of differen-
tiating between psychological and behavioral qualities via-a-vis
the job description and not necessarily fall victims to the halo
effect or judge each task performance as a stand-alone entity (as
suggested in the literature, e.g.: Bowler & Woehr, 2009; Meriac,
Hoffman, Woehr, & Fleisher, 2008). The results suggest that
the differentiation between the dimensions may not be specific
but skill or job content related, as demonstrated by the factors
found in our analysis.
The second hypothesis posited that AC dimensions will show
satisfactory predictive validity using a rarely utilized criterion:
performance-based bonus. This hypothesis too was supported
by the analysis: Five out of the 6 dimensions showed direct
associations with the bonus sum. Interestingly, the single most
predictive dimension was “organizational commitment”, revea-
ling perhaps an important aspect of the organization’s culture
and values, but also quite congruent with the importance of
commitment, motivation, and other related concepts and mea-
sures, such as conscientiousness in predicting organizational
performance (Jansen, Lievens, & Kleinmann, 2011; Witt,
Burke, Barrick, & Mount, 2002). Factorial grade analysis re-
vealed that interpersonal aspects of performance in the AC as a
whole were better predictors of performance-based bonus sum
than cognitive aspects. Gender and tenure did not associate with
the bonus, when analyzed as a part of the whole model.
The effect sizes of the association between the AC dimen-
sions or factorial grades with the bonus criterion were moderate.
This can be partly accounted for by the fact that our sample
included only candidates who successfully passed the AC,
which may cause a range restriction. Based on this assumption,
actual associations may be significantly higher (Sackett & Yang,
In interpreting the results one should be aware of the study
limitations: A relatively small sample taken from a specific
industry (finance) and a specific culture. The AC tasks and
criteria (dimensions) were specially developed for the organiza-
tion and the position participants applied for. Despite these
limitations, our sample provided adequate statistical power and
suggested trends congruent with previous evidence mentioned
in the literature (Arthur, Day, McNelly, & Edens, 2006; Bray &
Grant, 1966; Hofman, Melchers, Blair, Klienmann, & Ladd,
2011; Thorenton & Gibbons, 2009). As such it adds to our un-
derstanding of the potential constructs represented and assessed
in ACs, as well as contribute to the body of research supporting
the predictive validity of ACs as applied tools in a real world.
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