Advance Auto Parts Builds a Higher Performing Organization

Advance Auto Parts (Advance), a Fortune 500 company, is the second largest specialty retailer of automotive parts, accessories and maintenance items in the United States. Advance operates more than 2,600 stores in 39 states, Puerto Rico and the Virgin Islands. In addition to serving the "Do-it-yourself" customers, they also serve the professional installer market, which represents approximately 16% of their total sales.

Situation Analysis

In 2002, the COO of Advance, Mike Coppola established the vision that the Advance Parts Specialist be seen as the most knowledgeable auto parts professional in the local community. The Parts Specialist embodies the automotive parts knowledge Advance prides itself for, and is ultimately the face to the customer in that respect. Advance already had the most ASE certified professionals in the industry (the ASE is the foremost certification for Parts Specialists in the automotive industry). Coppola wanted to raise the bar.

Coppola's vision ties right into the bottom line the more often the customer is in the store, the more often they will make purchases. Put the right people behind the counter and the customer will come back again and again. Advance needed to identify, develop and retain the "right people".

Doug Bryant, Advance's Vice President Organizational Development and Training, was tasked with making Coppola's vision a reality. "We equate our Parts Specialists to your local pharmacist," says Bryant, "looking to them for advice, and developing a one-to-one relationship with them".

Bryant used the following three-pronged approach to build the desired high performance organization:

• Conduct a talent re-calibration
• Implement training to more quickly fill the knowledge gap of Team Members
• Implement measures to ensure better qualified candidates are selected as part of the hiring process

From 2002-2003, Advance conducted the talent re-calibration, whereby low potential, low performing Team Members that had been with the company for a long time, were moved to different job categories where they could be more effective. This activity led to Advance getting closer to becoming the high performance organization they planned to become.

Training was also incorporated during this time frame. Training is offered to all Parts Specialists, but Bryant knew it could only correct so much. "We quickly realized the challenges of improving the current workforce. Not only are there technical challenges in logistically deploying e-learning opportunities to over 2,600 stores, but also the fact that hiring the best talent initially usually yields better results than training. Ensuring the selection of high performance, high potential Parts Specialists would much more dramatically raise the bar for the organization."

In October 2003, Advance introduced a job-specific skills assessment as part of the hiring process for Parts Specialists. Advance worked with Brainbench to develop and deliver a test that specifically measured the parts knowledge of the job candidates. Applicants are screened on-site at the Advance retail stores, accessing the test via the Internet. Over 3,500 tests have been administered since the system was put in place. Bryant expected that an improved selection process would have the most dramatic impact on the performance of the organization in the long term.

Results

Getting started was not easy. According to Tonya Baker, Manager of Organizational Development and Talent Management, "Initially, across the board, managers were creating push back on the testing they felt it would delay the hiring process, and they might lose otherwise good candidates. The tide began to turn, however, when the managers saw that those who had been tested were a better fit for the job. Now we hear, 'I won't hire a Parts Specialist until I see their score.'"

In order to determine the effectiveness of the program, Advance compared the test scores of the Parts Specialists who were hired since Jan. 1, 2004 against the entire universe of Advance Parts Specialists test scores. This information included performance evaluation scores, ASE certification status, and employment status (active vs. terminated). What Bryant hoped to establish, was that if managers adhered to using the assessment as part of the hiring process, they would have more productive and longer tenured Team Members.

The results were dramatic.

• Performance Evaluations
• Advance saw a 50% increase in the number of Parts Specialists who received a performance evaluation of "Greatly Exceeds Performance Measures" for those who went through the testing process.
• Those who received a performance rating of "Greatly Exceeds Performance Measures" had an average test score in the top 33%; those receiving an evaluation of "Does Not Meet Performance Measures" had scored on average below 50% of their counterparts on the test.
• Employment
• Those who remain employed by Advance scored on average in the top 40% of all test-takers; those who have since been terminated scored on average in the bottom 50%.
• ASE Certification
• 32% of all employees who were tested in 2004 as part of the selection process have received the ASE certification, compared to 25% of those who had not been tested.
• ASE-certified Parts Specialists scored on average in the top 39% of all test-takers, VS 47% for those who are not yet ASE-certified.

Advance has been able to realize the value of introducing assessments into the hiring process hiring candidates with higher scores led to Team Members more likely to exceed manager expectations, stay with the company longer, and more likely to achieve ASE certification. All of these factors support Coppola's vision of creating the industry's most knowledgeable workforce, leading to greater customer satisfaction, and ultimately positively impacting the bottom line. "We saw a direct correlation between test scores and our key metrics. We rely heavily on factual data and assessment," says Bryant.

Assessment as part of the hiring process is mandated across all regions within Advance. The regions have embraced the tests and have managers who support the findings above. "The test adds a valuable piece of information to consider in the hiring decision. It can make the job much easier. In one case, it validated a team member's knowledge to others who questioned their skill level. The team member was promoted and is currently doing very well," said Doug Price, Store Manager.

What's next? Advance continues to collect information documenting the positive impact assessments have had in creating a higher performance organization. Studies documenting impact on sales, turnover, and overall impact on revenue, will be released later this year. Furthermore, Advance is even considering augmenting their skills tests with assessments measuring personality and ability traits.

Bottom line assessment as part of the hiring process is helping Advance achieve their objective of creating a higher performance organization. According to Bryant, "In order for Advance Auto Parts to build a high-performance workforce we had to focus on the selection of high-performance Team Members. This focus has contributed to Advance Auto Parts being named by Forbes Magazine as the best managed company in the retail segment!"

CLOSING REMARKS: Wendell Williams, Ph. D.

This case represents an excellent example of what good hiring and selection practices can do for an organization as well as the predictable obstacles and opportunities encountered. For example:

• A foresighted employee willing to take risk by doing things different is required to start the project
• The employee must have full support from the executive level
• A reliable full-service test vendor with a collection of solid hiring tests is necessary to assemble the hiring system
• Everyone must have the willingness to manage-through initial supervisor skepticism
• And, within a few months, results should be published in terms of bottom-line benefits

Few people stop to consider that EVERY method used to screen prospective employees and managers is a test. Tests include unlikely things like interviews, application forms, resumes, references, and the like.

So unless an organization is hiring everyone who applies, by default, they are using some sort of "test." The ONLY question they have to answer when choosing between candidates is, "How accurate do they want to be?"

Foresighted employees and supportive executives are, of course, the first step in every project. Organizations have built-in people-inertia that actively resists doing anything "differently." They generally push-back anything that causes them to change their opinion about hiring and promoting people.

Managers who are accustomed to quick-hiring initially resist screening more people to find right-skilled ones (hiring ratios for an effective selection system are generally about 1:6); but the employees they do hire are generally twice as productive, have half the turnover and require much less training. However, after a short period of resistance, managers generally become firm believers.

Given time and patience, almost everyone realizes the obvious: it is better to hire a right-skilled person than it is to train a wrong-skilled one, both from a logistical as well as an effectiveness basis. Screening-in people with the right skills and knowledge gives both the company and the employees a "running head start."

Dr. Wendell Williams (rww@ScientificSelection.com) is a bottom-line consultant with a message: how to avoid nonsense HR practices, how to identify employees in the top 20%, and how to manage their performance effectively. Wendell has both a PhD in industrial psychology and an MBA. He has been widely quoted both nationally and internationally and is a ER Daily author. He holds memberships in the American Psychological Association, The Society for Industrial and Organizational Psychology and The Association of Test Publishers. His web site is www.ScientificSelection.com, and his phone number is (770) 792-6857.