Understanding psychological testing

Finding qualified job applicants with the right work experience and solid references may seem like a small miracle during this global drought of skilled IT professionals, but the cost of a bad hire, especially at an IT-management or executive level, can be devastating, and some companies are using psychological tests to help assess the competency of candidates

These companies view psychological tests as a way to help determine if new hires will be a boom or a bust in the office, and how they will increase or detract from productivity.

Psychological testing is becoming more and more prevalent in the workplace, according to Dr. Mitch Rothstein, professor of Organizational Behaviour at Ivey Business School in Ontario, and author of “The circumnavigation of personality” in the International Journal of Selection and Assessment.

A 1999 American Management Association (AMA) study reveals that 39 per cent of 1,054 companies surveyed use psychological testing as part of their application process – a sizable number that has remained constant over the past several years. This is due to recognition, especially among technology companies, that every new addition is critical to the success of the team, especially when resources and deadlines are tight.

These tests are a great help in determining if a candidate is a good fit with a company, said Fernand Sarrat, who has experience with these tests at Cylink and IBM Corp., and most recently as president and CEO of Linuxcare, a San Francisco-based provider of services for enterprise Linux environments. For example, if you’re trying to promote teamwork as part of your company’s culture, these tests can help you determine if a candidate is a team player.

The growing trend of psychological testing has been good news for testing agencies. Dr. Art Resnikoff, a consulting psychologist at Silicon Valley-based Hagberg Consulting Group (HCG), said his firm has been getting more business recently, because an estimated 35 per cent of new hires fail.

This is incredibly expensive, Resnikoff said, and not just in terms of hard costs like signing bonuses and relocation expenses, but in terms of productivity loss.

Treading lightly

Using psychological testing is not without risks, however. Companies need to be sure they’re getting the right test for the job, or they risk violating the privacy of their applicants.

For example, Sibi Soroka of Lafayette, Calif., took a version of the Minnesota Multi-Phasic Personality Inventory (MMPI) test as part of his application process to Target Stores. The test was developed to assist in the diagnosis of mental disorders, and many of its more than 700 questions delve into personal areas, such as sexual practice and religious beliefs.

Soroka got the job, but was so offended by the nature of the questions that he decided to sue. He was awarded a settlement in 1993.

And rightly so, Ivey Business School’s Rothstein said. The MMPI was not designed for assessment.

Currently, there is no government or industry regulation of testing, nor is there an official stamp of approval that deems a certain test effective and appropriate. As Dr. Martin Haygood, president and co-founder of the Atlanta-based Management Psychology Group (MPG), a consulting firm of professional psychologists, points out, anybody could make up a test with some friends over cocktails, throw it up on a site, and sell it.

The average manager or HR representative has no way of differentiating between quality and useless tests, even after generating some sample reports. Sometimes, Haygood explains, this is because test providers utilize Barnum effect statements in their results – statements that are true for many people, much like a horoscope. For example, a test may say that you are prone to becoming anxious when speaking in front of a group, Haygood said. Those statements do not effectively differentiate between applicants or identify real and unique attributes of a single candidate.

To avoid problems, companies should use tests that are not excessively intrusive and have predictive validity – evidence that the test is indicative of success on the job. Get good advice if you don’t have experience with testing for selection, Rothstein said. For most organizations, this means hiring a consultant.

Getting guidance for some roles

The extent of the consulting help that you need depends upon the type of hiring you’re doing. If you’re looking to fill an executive or managerial position, it pays to use a company that provides customized assessment criteria and personal advice from professional psychologists. Dr. H. Michael Boyd, program manager of Human Resources Strategies Research at IDC in Framingham, Mass., recommends using a highly-trained consultant who will guide you through each step of the evaluation process, from preparing the test to interpreting the results.

One such firm is Resnikoff’s HCG, which specializes in the assessment and development of executive leadership. HCG’s process consists of four steps.

First, a consultant determines the characteristics most important to success in the open position. Second, the consultant interviews the hiring manager to understand what work styles he or she prefers. HCG then interviews members of the organization to identify cultural elements of the workplace. And finally, after the applicant takes the two-and-a-half hour psychological Leadership Evaluation test, an HCG psychologist assesses the candidate’s fit with the position, culture, and potential boss. HCG also conducts an in-depth interview with the applicant to address any areas in which his or her results were especially high or low. For instance, if a candidate ranked below average in the area of willingness to take charge and exert influence, HCG may ask, “When faced with a situation that requires quick action, when the decisions made will affect others, does your approach change? If so, how?”

Resnikoff insists that this process is far more predictive of a candidate’s success than is a regular round of interviews. In a standard interview, Resnikoff explains, an applicant is using a role style, which means the person is conscious of the impact he or she is having and is probably on exemplary behaviour. What an employer cannot discern from an interview is the person’s operating style, or how the person behaves under a possibly stressful situation, when he or she is less concerned with making the right impression. HCG’s test can pick up deficiencies that an interviewer probably cannot, such as impatience, indecisiveness, and poor listening skills.

The test comprises more than 600 true/false questions about the candidate’s social manner, thinking style, work habits, organizational skills, and so on. These high-end evaluations are expensive – HCG charges between US$3,000 and US$4,000 per candidate. But according to clients, the fee is worth it. Steve Thomas, president of Pyxis, a provider of medication and supply dispensing systems in San Diego, believes these tests save money in the long run.