Friday, May 19, 2017

Psychometric Testing: Friend or Foe?

I’ve seen it before. It’s amazing. You can’t believe how badly you got it wrong. And then you go back to the psychometric test results in the personnel file and the concerns that were identified or the markers that should have given you ‘cause for pause’ and you think, "Why, oh why, did we hire this person?"

As a consultant, one of the most common questions I get asked by clients is "Should I use psychometric testing?" It is estimated that a cost of a bad hire is equivalent to 150-300 per cent of an employee’s annual salary, which can result in more than $1 million for an executive role. According to Harvard Business Review, up to 80 per cent of employee turnover is due directly or indirectly to poor hiring decisions.

Now it makes a lot of sense to test the potential of candidates in the hiring process when one considers the inherent requirements of their job and the potential consequences of having a psychopath in the workplace. Any sound test or profiling tool whether psychometric or otherwise must be reliable and valid. It must measure what it purports to measure (Test validity) and what it needs to measure (be situationally appropriate).

Let’s assume you have agreed on which instrument to use (no tests fallen off the back of a cornflakes box, please) and could appropriately and reliably assess a candidate's cognitive capacity. How much weight should you give the test results and how do you maximise the future benefits of undergoing such a lengthy and exhaustive process?

What is Psychometric Testing?

Psychometric testing is commonly designed to measure a candidate’s employment suitability based on their cognitive capabilities, thinking preferences and/or personality traits. Companies will often utilise a variety of tests (the most common pairing is intelligence and personality testing) to increase the validity of the testing process and to ensure the company-candidate fit.

While I will use the word 'test' here for the sake of simplicity, many instruments will not generate a pass or fail nor yield either good or bad profiles. The 'test' results must always be interpreted in their correct context. Even the word 'test' has a connotation of putting the assessee under pressure and while they may do assessments that demand forced choice and hence feel pressure, not all tests are designed to depict assessee performance under pressure.

I recently consulted with an organisation that used a suite of psychometric tests to assess the likelihood of candidates (internal and external) for a senior leadership role. Both intelligence and personality traits were tested for comprehensively. In this situation, assessing intelligence and reasoning levels measured the candidates’ ability to communicate and articulate ideas and words, analyse numerical data and think in conceptual terms.

In addition to the aforementioned, the inclusivity of a personality test measured candidates on several personality factors, their ethical values and was designed to predict their likelihood to engage in counterproductive work behaviours (CWBs), specifically fraud and corruption. For example, a low scorer on the fairness category could indicate they may be willing to gain through cheating or stealing at the expense of others. Warning signs like this highlights factors that will hinder the employee’s ability to perform the inherent requirements of the job; especially for managers or people undertaking a leadership role where there is a high degree of trust and security required for confidential matters as reflected in that particular role. When analysing the test results, employers must know how to responsibly interpret (often with the aid of the consultant assessor) the behavioural qualities that flag undesirable traits in a potential candidate as well as the candidate's ability to adopt a growth mindset and exhibit positive workplace behaviours. 

Why use Psychometric Testing?

· As a hiring tool. Psychometric testing can provide an accurate description of a candidate’s working preferences and suitability to the role as long as the selected test measures what it purports to measure (test validity), what it needs to measure (is situationally appropriate) and has a high degree of reliability (would produce the same or similar results over time). Dr. Andrew Marty, CEO of SACS Consulting argues that psychometric testing models can assess the "organisational fit, emotional intelligence and engagement levels" of candidates. Studies have shown that high levels of agreeableness and conscientiousness have an inverse relationship with counterproductive work behaviours; thus if we select for these two traits, it is less likely to result in a negative impact on workplace behaviour. However having a high score on these traits will not automatically ensure one’s suitability for the role. Organisations more than ever are hiring for potential and attitude, which brings the use of psychometric testing to the forefront of the hiring process as a way of predicting an individual’s likelihood of performing well in the role, dealing with adversity and maintaining a positive mindset. 

· To understand our employees better. Organisations should strive to implement a feedback culture and top performing organisations ensure that all levels are performance managed; not only the top-end managers or the problematic employees. Tests such as the Herrmann Brain Dominance Instrument (HBDI) are able to provide potent self-report data about thinking preferences, learning preferences how individuals tend to behave under pressure thereby enhancing self-awareness. Therefore, the HBDI can be used as a team building exercise in which individuals make sense of their appetite for change and use understanding of different thinking styles to practise greater tolerance and appreciation of difference within their work team.

· To increase professional-development. Testing can be a powerful tool for identifying skill gaps and the learning and development of employees through: 1) Building leadership capabilities through awareness of leadership style, learning how to lead change and lead diverse teams. 2) Encouraging self-awareness and self-reflection amongst leaders to help them understand their strengths/weaknesses and identify training needs. 3) Developing an understanding of the psychology of change, employee’s emotional intelligence, resilience and “bounce-backability”. 4) The strengthening of employees' communication skills and their ability to handle courageous/difficult conversations.  

· To identify and retain talent. The American management consultant Peter Drucker is often credited with the words "culture eats strategy for breakfast". Similarly, good character supersedes any policy, no matter how well written. There is an elaborate recruitment process within the Australian Football League (AFL) to identify talent from early to mid teens. In a domain where demand for places at the highest level exceeds supply, the league can be choosy, and what it is choosing for when all the other boxes are ticked, is character. In fact, some have gone so far as to say that character will sometimes be preferred over natural talent because if the fledgling players are made of the right stuff, they will withstand the extreme pressure and temptations and will be able to make the very best of the opportunities they are given. What clubs are trying to gauge beyond the footballers' aerobic capacity, technical prowess, fast twitch muscles and ‘footy brain’ mental toughness, is their strength of character, particularly in an era where clubs are so attuned to sponsorship deals and reputational risk. 

Choosing a Psychometric Test

One of the biggest challenges with selecting a psychometric test is that there are so many tests available that it can often be difficult to select the most suitable one combination. 

Organisations have the responsibility to create and maintain a healthy system and choose staff preciously. I’ve seen clients come up with a list of reasons as to why they should cling onto a bad hire.

· The applicant bluffed or deceived the manager in the selection process
· The recruiters were looking for the wrong attributes at the time of selection
· They’ve wasted company money or a bad hire and it could expensive and tedious to make good on the mistake. 

Another common occurrence with new hires if that if we’ve been the ones to endorse or select them, and if they prove to be a disaster, we often hold on far too long before we are prepared to get involved, address the issues and, if necessary, ‘cut the tangled parachute’.

Things to consider…

· Does my preferred test stand up to rigorous scrutiny? Check out the reported validity and reliability of the test and don’t get creative and use psychometrics to test for something they were never designed to test. If psychometric testing is used as part of the pre-employment screening process, ensure that assessment tools are valid and reflect the inherent requirements of the job.  

· Does this test measure what I want it to measure? Is my goal to assess cognitive capacity (e.g. reading fluency, reasoning: verbal, numerical, abstract)? Is my goal to assess personality traits or counterproductive work behaviours (e.g. personality/values based questionnaires)? Is my goal to assess performance (e.g. 360-degree surveys, team questionnaires, culture surveys)? If the results are being shared with the candidate, make sure that feedback is given appropriately and by a test-accredited professional.

· Does the test measure preference or capability? The distinction is important in terms of a) what we extrapolate from the data b) the decisions we make around the distinction and c) what and how we communicate with the person tested.

· How much weight do I give the data revealed by the test and what will I do if testing results are unfavourable? I always recommend that testing is administered by someone who is accredited to run the test and is able to correctly analyse and interpret the test results. Understand how the testing questions are likely to result in the conclusions reached. Don’t ignore ‘red flags’ or undesirable behaviours if visible in a candidate’s results. If testing for hiring potential, complement test results with other factors such as the candidate’s interview and references given. And try not to shoot the messenger when you had your heart set on someone and the consultant assessor doesn't agree!

· Will we share the test results with candidates or current employees or not? What is fair and reasonable? What is onerous and unnecessary? What are any risks of different courses of action and do they have the right to know? If we do share, how do we do so in a way that is encouraging and leads to intentional action to work on 'growing edges' (particularly for existing employees)?

· What other methodologies, questions, assessment tasks might we need to use? What combination of assessment elements will give us the most robust and holistic picture of someone as role ready?

Psychometric testing can be a wonderful tool to hire for potential, maximise engagement and grow emotional intelligence in our leaders. Bear in mind, the ultimate protection against counterproductive workplace behaviour is to attempt to recruit people of good character and create a values narrative so they understand what the organisation stands for and what it will not tolerate. In an era of where employee retention is one of the biggest challenges facing organisations today, the question of how we embrace and best utilise psychometric testing in the workforce is one that we should bring to the boardroom table.