Hogan Leadership Development Process

1. HoganLeadership Development Process

2. Presentation Outline • Overview of Hogan Assessment Systems • Hogan Leadership Development Process • Customization Options • The Hogan Value Proposition 2

3. Hogan At A Glance MISSION We provide state-of-the-art assessment solutions to enhance the effectiveness of individuals and organizations • World’s leading provider of employee selection and development assessments • Assessed over 2.5 million working adults performing over 400 different jobs across 40 countries • Over 25 years of research and implementation experience • Continuous system testing, research and support improvement • Legally defensible: never been successfully challenged • Predictive, with demonstrable bottom-line results ranging from improved employee performance to reduced turnover and recruiting expense HISTORY A 28-year legacy of producing measurable results supports our mission 3

4. Factors In Choosing An Assessment Provider Assessments Should: • Predict Job Performance • Be Legally Defensible • Be Based on a Robust Platform • Be Easy to Implement and Use • Rest on Solid Service and Support EXPERTISE Research Technology Consulting Coaching Support 4

5. Hogan Leadership Development Process Step 2 Step 3 Step 4 Step 5 Step 1 Assessment Reports Feedback Planning Monitoring 5

6. Assessment Job Fit (+) HPI Cognitive Job Fit (-) HBRI HDS MVPI Environment Step 1 Step 2 Step 3 Step 4 Step 5 HPI - Hogan Personality Inventory Normal personality as it relates to success in a job or career HDS - Hogan Development Survey Eleven patterns of behavior that can lead to career derailment MVPI - Motives, Values, Preferences Inventory Core values related to organization fit and leadership environment HBRI – Hogan Business Reasoning Inventory Tactical and strategic reasoning as it relates to decision making 6

7. Hogan Personality Inventory – HPI Seven scales predicting job and career success • Adjustment Self-confidence, resiliency, and composure • Ambition Expectations for self/others and leader-like • Sociability Socially proactive vs. reactive • Interpersonal Sensitivity Confrontation style • Prudence Attention to detail and following rules • Inquisitive Visionary vs. implementation-focused • Learning Approach Learning style - “traditional” vs. “hands-on” HPI Scale Provides insight regarding … 7

8. Hogan Development Survey – HDS Eleven scales that indicate barriers to career success HDS ScaleHigher scores suggest a propensity to be … • ExcitableMoody, inconsistent, and unpredictable • Skeptical Cynical, distrustful, and fault-finding • Cautious Reluctant to change, averse to strategic risk, and fearful of failure • Reserved Socially withdrawn, distant, and unapproachable • Leisurely Indifferent to requests, covertly resistant, and passively aggressive • Bold Overly self-confident, stubborn, self-promoting and entitled • Mischievous Eager to take risks, test limits, and neglect consequences • Colorful Attention-seeking, dramatic, and socially dominating • Imaginative Eccentric, flighty, and excessively creative yet impractical • Diligent Perfectionistic, averse to delegation, and micromanaging • Dutiful Overly eager to please, reliant on others, and ingratiating 8

9. Motives, Values, Preferences Inventory – MVPI Ten scales measuring values related to the way one would lead MVPI ScaleHigher scores suggest valuing … • Recognition Public acknowledgement and “pats on the back” • Power Being in charge and being perceived as influential • Hedonism Fun, lighthearted, and open-minded work environments • Altruistic Actively helping others and providing excellent customer service • Affiliation Networking, building relationships, belonging to work group • Tradition Conservative org. cultures and personal-workplace values match • Security Secure, predictable, and risk-free work environments • Commerce Making and saving money and involvement in org. finances • Aesthetics Focusing on quality and product “look & feel” • Science Analytic problem solving and working with technology 9

10. Hogan Business Reasoning Inventory – HBRI Overall Reasoning Analytic/ Spatial Verbal Quantitative Strategic Reasoning Tactical Reasoning Analytic/ Spatial Verbal Quantitative A face-valid blend of items providing a measure of cognitive ability Tactical Reasoning • Ability to deal effectively with details, implement plans within a strategy, and use established rules or procedures to solve a variety of problems • e.g., implementing programs, diagnosing problems, and adjusting implementation to achieve results Strategic Reasoning • Ability to see the big picture, infer relationships, and identify potential opportunities, challenges, and problems • e.g., looking at market trends, finding relationships between market factors, and choosing key issues 10

11. Reports Step 1 Step 2 Step 3 Step 4 Step 5 Leadership Forecast Series Leadership Forecast Potential Report Created from HPI results; covers day-to-day leadership behaviors Leadership Forecast Challenge Report Created from HDS results; covers potential derailing tendencies Leadership Forecast Values Report Created from MVPI results; covers core values related to leadership Leadership Forecast Coaching Report Summary report that provides development guidance 11

12. Leadership Potential Report – Profile 12

13. Leadership Potential Report – Description 13

14. Leadership Potential Report – Recommendations 14

15. Feedback Comprehensive Leadership Model Job Requirements Model Values-Based Model Step 1 Step 2 Step 3 Step 4 Step 5 Hogan Feedback Models Comprehensive Systematic coverage of each scale plus configurations Job Requirements Model Approach structured around the requirements of a job Leadership Model Customized approach based on competencies Values-Based Model What a person values and how they might get it 15

16. Feedback – Success Factors Our professional coaches are certified in using Hogan inventories and adhere to our 10 success factors when providing feedback We systematically calibrate our coaches and evaluate their performance in partnership with our clients 16

17. Planning Step 1 Step 2 Step 3 Step 4 Step 5 Development Planning Determine requirements needed for effective performance Analyze Your Job Identify current performance strengths and weaknesses Review Performance Data Identify strengths and opportunities related to assessments Review Forecast Reports Integrate assessment and performance data Data Integration Identify development targets and actions Plan Development 17

18. Planning – 5 Strategies for Change 18

19. Monitoring Build Awareness Internalize Change Modify Reputation Target Behaviors Seek Feedback Step 1 Step 2 Step 3 Step 4 Step 5 Leaders moving from good to great 19

20. Monitoring – Methods of Monitoring Progress Traditional Methods • Collecting actual performance metrics • Rating based performance appraisal • 360° ratings Hogan Calibrator TM • The Calibrator TMis a self-report inventory • Measures 16 facets of great leadership • Organized by domains (business, leadership, interpersonal, and intrapersonal) • Provides a progress index for facets based on: • Self-awareness • Attitude • Behavior 20

21. Customization Step 2 Step 3 Step 4 Step 5 Step 1 Assessment Reports Feedback Planning Monitoring 21

22. Options To Consider Hogan Assessment Systems is widely recognized for its ability to design and implement solutions to meet customer needs • Assessment • Platform, system integration, user interface • Assessment configuration • Administration • Reports • Type of report (e.g. individual, group, integrated summary) • Content (e.g. competency driven) • Feedback • Coaches (Hogan experts, internal coaches, customer selected coaches) • Feedback model and/or session design • Planning • Development planning model and/or tools • Development content • Monitoring • Traditional methods • Calibrator TM with customization 22

23. The Hogan Value Proposition • Predictive assessments with measurement breadth • Proven to be legally defensible • Easy to implement and use • Delivered in a reliable and timely fashion • Supported by a professional team 23

24. Predictive Assessments with Measurement Breadth We conduct an average of 89 validity studies on 74 different job titles per year We conduct an average of 35 criterion-related validity studies per year World-class research team Advanced degrees in psychology or measurement Focused on client research, improving our assessments, and creating new assessments Provide research support needed to design and implement custom solutions RESEARCH LEADERS Hogan Assessment Systems is the industry leader with respect to creating high-value predictive assessments that are directly related to job performance and bottom-line results 24

25. Research Example – High Potential Leaders 350 executives from a Fortune 100 company participated in a longitudinal study of leadership potential. The Hogan Leadership Development Process served as the foundation for the study. The process was strongly endorsed by the participants and the assessment component was highly predictive of job performance and potential. Hogan assessments in combination with performance ratings accounted for 41% of the variance in predicting leadership potential 360° Assessment .31 HPI HDS MVPI HBRI Job Performance People = .32 Business = .27 .37 Future Potential 25

26. Research Example – High Potential Leaders What participants (executives) say about the process …

27. Business Case – Hogan Executive Selection The following are quotes from a client describing the results from their investment in Hogan assessments for executive selection • “For an up-front investment of $124,000 and a yearly investment of approximately $25,000 ($75 per applicant x 208 applicants, plus $7,500 administrative fees)” • “We added rigor, accuracy, and legal defensibility to our hiring practices for leadership positions” • “Even if the use of the Hogan tools results in only a 1% decrease in executive turnover caused by poor hiring decisions, the investment would yield a $285,000 annual return” • “With the help of Hogan information, we only needed to avoid 1 bad hire at the SVP level to pay for the initial as well as the first 5 years’ investment in assessment” 27

28. Meta Analysis – Leadership Competencies 28

29. Legally Defensible If fairness is ever called into question, a judge will want to know… • Relationship between the assessment procedures and job performance • Adverse impact of the assessment procedures • Race • Gender • Age • Consistent application of the assessment procedures CRITICAL QUESTIONS 1. Has the test been reviewed in Buros’ Mental Measurements Yearbook? 2. How are cut-off scores established for employee selection procedures? 3. Can the provider produce a summaryof validation results for jobs similar to the one under consideration? …These are just three of the twelvequestions to ask your assessmentprovider. 29

30. Legal Defensibility – Hogan Commitment We adhere to the Federal Uniform Guidelines • We treat validity is an ongoing concern, not a single event • Our technical manuals outline tool development and validation research • Research archive includes studies in virtually every industry in the Dictionary of Occupational Titles (D.O.T.) • Technical reports directly address the Uniform Guideline expectations Age Gender Race 30

31. Easy to Implement and Use Consulting Clients MDAhas partnered with Hogan to create a branded integrated report that is part of their approach to the selection and development of leaders. Mercer-Deltauses a branded version of our Leadership Forecast Reports as the foundation for programs in their Executive Leadership Center. DDIuses a branded version of our Interpretive Reports as a key component of their executive development practice. Corporate Clients Bank of America uses the Hogan Leadership Forecast Challenge Report as a key part of their on-boarding process for newly hired executives. Dell uses Hogan Leadership Forecast Reports and our Professional Coaches as part of their Global Talent Management Program. PepsiCo uses the Hogan Leadership Development Process to develop leaders throughout the world. 31

32. Reliable and Timely Delivery World-Class Reliability Industry leading assessment platform System maintenance requires no downtime Intrusion detection / encryption Leading edge disaster recovery plan Immediate Results ... anywhere Results available in 90 seconds Multiple delivery options 20+ languages and growing ADVANCEDTECHNOLOGY A world-class, globally-available assessment platform delivers what you need whenever you need it in the most reliable manner in the industry 32

33. Reliable and Timely Delivery – Facts Over 50,000 assessments delivered per month 99% returned within 90 seconds or less Zero system outages in 27 months Redundant web/database/application servers, firewalls, switches, internet connectivity, power systems Regular security audits Annual & quarterly security reviews 100% success in client system audits On average, four Fortune 100 clients audit our technology every year Assessment platform is most secure in the industry 24 x 7 x 365 fully-managed and monitored intrusion detection systems (IDS) Our data and system have never been compromised Our assessment platform security and facility controls exceed Department of Defense standards 33

34. Supported by a Professional Team We support projects using an integrated team approach Client Project Team Senior Consultant Research Team Member Technology Team Member Customer Service Team Member 34

35. Hogan Leadership Development Process