Psychometric testing is used commonly in business today for everything from recruitment to professional development. But how much weight should we put on psychometric tests when it comes to hiring, firing and promotion?
Critics believe that psychometrics is an inaccurate science and that data from psychometric testing should not be relied on when it comes to making important business decisions. In fact the law is quite strict on using psychometric testing in the workplace and it is important for organisations to adhere to best practices when it comes to administering tests.
Is psychometric testing effective?
The first concern when considering if a personality test is accurate or not would be is it possible to cheat? After all, in a multiple choice test, it is pretty easy just to tick the choice that you think your manager will want to hear, rather than the one that is closest to the truth.
In actuality, well-designed psychometric personality tests are extensive enough and structured in such a way that inconsistent data is easily filtered out when processing the results. However it is important not to rely on such tests as the only method of assessment, but rather use them together with other techniques.
The results of psychometric testing may not be 100% accurate but neither are other assessment methods. A study by Schmidt and Hunter in 1998 found that psychometric tests were actually more accurate than interviews, job knowledge tests or experience when it came to predicting future job performance. Only work sample tests provided a higher accuracy of judging performance.
Psychometric tests are also designed to give reliable and repeatable results. Provided the candidate has experienced no major life changes, either professionally or personally, or they have not received specific training, you can expect an individual to get the same results from a personality or aptitude test several years later. With other techniques such as interviewing, it is highly likely that results will differ depending on arbitrary factors.
Best practices for psychometric testing
For test results to be meaningful and accurate, the questions must be valid and non-biased. This can be quite difficult especially when it comes to culture bias, which has been shown to have an effect on intelligence tests.
It is important when administering a test that every candidate is subject to the same conditions such as physical environment, lack of interruptions, given instructions and time limit.
If not performed carefully, psychometric testing can discriminate against certain candidates and this can have legal implications. Tests should not favour younger or older employees or be biased against certain ethnic groups. The best way to ensure this is to work with a specialist company that has experience in psychometric testing to ensure that the test is well structured and the resulting data is processed effectively.
Like it or not, the popularity of psychometrics in the workplace shows no signs of declining. For advice on how to manage psychometric projects within your business, please contact us for an informal discussion, or read on to the next article.
Used properly, psychometric testing can provide you with valuable data that can help you to hire the best people for the job, get the most out of your staff and help you to manage more effectively.
However if carried out poorly, psychometrics can be a waste of time and money and the results can be inaccurate and unreliable.
For this reason, it is vital to first understand the theory behind psychometrics and then ensure you are working within best practices and planning effectively to get the most from your psychometric instruments.
Choosing psychometric tests
Before choosing the type of tests that will be most suitable for your purposes, you need to define what you hope to achieve from carrying out psychometric testing.
If used in the recruitment process, this may be to find individuals with a high aptitude in the skills that the role requires, to find candidates with a personality profile that fits with the rest of your team or to eliminate a bottom percentage of applicants.
In judging the effectiveness of a psychometric test, you should first consider the potential reliability and validity of the test. Working with a specialist provider with a good reputation and proven track record makes this a lot easier. There are many cheap and free psychometric test kits available on the Internet but are not researched and tested thoroughly. If you are relying at least partially on the results of the test to help you make important business decisions, you need to assign an appropriate budget to it.
It is equally important to choose tests that are relevant to your business and the job role of the candidates taking it. For example, a complex numerical reasoning test is probably overkill for most job roles.
When to administer psychometric testing
If you are planning on asking candidates to undergo psychometric testing, the timing of the test depends on if you are using it to screen applicants prior to selection, or if you are using the psychometrics to aid you in shortlisting candidates.
For screening purposes, it is probably most efficient to administer testing online before inviting candidates for interview or other assessment. Specially designed software makes it easy to administer both job applications and psychometric testing over the Internet and allows you to filter the data depending on your individual requirements.
Tests used for other purposes such as staff development, promotion, team building and other business decisions should be carried out alongside other processes such as appraisals, measurement of job performance and employee surveys.
Factors that may influence the results of other tests do not generally affect psychometric testing, however in the case of aptitude tests, candidates should have time to prepare and have had sufficient rest before the test. An aptitude test given after staff have been working long hours to make a deadline, for example, will result in poorer scores and may be inaccurate.
Tips and warnings
In order to be effective, psychometric tests must be properly constructed, valid and reliable. The best way to ensure this is to work with a professional supplier that provides statistical data on the reliability of tests and information about how the data should be interpreted.
Test takers should be given clear instructions as to how to complete the test and should fully understand the reasoning behind the test and its purpose. The environment in which candidates take the test should be comfortable and free of distractions.
Above all, the results from one test should never form the basis for any business decision. Psychometrics should always be used in conjunction with other assessment methods and processes for best results.
For more details on choosing the right psychometric test for your purposes, read our final article on psychometrics.
Historically, the task of getting the entire workforce to complete a survey, collecting them, collating the data and analysing the results was huge one, and many companies wondered if it was worth the effort. Small businesses in particular, often did not have the available budget with which to conduct an effective engagement survey and act on the results.
However, these days technology has made things a lot easier and small to medium sized businesses can now benefit from engagement measuring methods that were previously only accessible to large corporations.
The rise of the online survey
Advances in Internet technology have resulted in the launch of several websites that allow individuals to design and launch their own employee engagement surveys.
Rather than relying on the classic 15 questions, companies are now free to develop their own surveys and move away from the one-approach-fits-all philosophy. It is possible for all survey taking and result analysis to be completed in-house on a shoestring budget.
Conducting any kind of survey electronically is much easier than traditional paper-based methods. Results can be measured and statistics compiled automatically and it is easy to keep track of who has and has not completed the survey, while still keeping results anonymous.
The result of this cheap and easy way of measuring employee engagement is that an increasing number of small businesses in the UK are recognising the potential benefits of measuring engagement and using online software as an effective method of surveying their staff.
Best practices for carrying out an employee engagement survey
When constructing a survey to measure engagement, it’s very important that questions are worded in a way to encourage feedback that is honest and constructive. For example, asking workers if they feel they are paid fairly may not be a good question, as some of your employees may see this as an opportunity to push for a raise.
You also need to make it clear to employees how the data will be used and demonstrate how responses are kept anonymous. Many employees may worry that there is some kind of electronic tag on each survey that will allow it to be traced back to them and this may affect their answers.
If your employees are taking the time to give you feedback, it is critical that you put a high priority on confidentiality, their opinions are listened to with respect and that data is analysed properly and acted on.
While it may be very easy to conduct a survey using one of the free sites such as SurveyMonkey, there are many advantages of having a bespoke system built that is tailored to your organisation.
Read more about the advantages that bespoke engagement survey software provides over DIY alternatives (link to last article)
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As managers began to recognise the value in employee engagement and its effects on running a profitable business, interest grew in how it could effectively be measured.
Business analytics agency, Gallup, is commonly accredited with inventing the modern engagement survey and their research has been published in a number of publications including the Harvard Business Review and the Journal of Applied Psychology
Gallup has claimed that employee engagement can be measured by asking 12 key questions:
Gallup uses employee engagement as a method of benchmarking businesses and publishes a list of organisations every year that have achieved its “Great Workplace Award”, based on levels of employee engagement and productivity.
The future of employee engagement surveys
After reading the research by Gallup and other business consultancies statistics agencies, many organisations jumped on the employer engagement bandwagon with little planning. It became common for companies to survey their employees but then do little with the findings, provoking a spate of headlines in HR publications such as “Don’t Waste Your Time on Engagement”.
It’s now recognised that traditional employee engagement surveys such as those based on the above 12 questions may not always be the best methodology and a more flexible approach to surveying is required for each individual organisation. Additionally, it is important to analyse the data resulting from the engagement survey and use this information to construct an action plan with the aim of improving results in the future.
The rise of the Internet and improved technology over the years has now made it possible for small businesses to carry out their own DIY engagement surveys and compile the results in an easy to digest format. These advances mean that more companies than ever before are benefiting from the knowledge that a well designed employee engagement survey can provide them with.
Read on to find out how employee engagement surveys are being used effectively within organisations today. (link to next article)
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Employee engagement is a term used in business management that can be used to measure each employee’s attachment to their job and their following performance at work. Employee engagement is not the same as satisfaction, happiness or effort, although all these things may play a part in overall engagement levels.
Employee engagement is linked directly with operational performance, and understandably, most managers are keen to increase it. HR consulting agency, Towers Watson, conducted a study in 2011 reporting that highly engaged organisations increased their operating income by 19.2% in one year. Conversely, the income of companies with low employee engagement declined by 32.7%. Engaged work forces also benefit from reduced staff turnover, increased sales and employees take less sick days on average.
The background behind the employee engagement principle
A couple of generations ago, anyone attaining employment in a large organisation would often expect to work for them for the entire length of their career. Employees were expected to be loyal to the organisation and in return for this loyalty, they were rewarded with a series of promotions and lifetime employment.
However, in the 1980s, large corporations started looking outside the UK for their workforce requirements and moved many production units overseas to countries with lower wages, in a bid to improve profits. Redundancies became common and loyalty was no longer the key to long-term employment. The era of a job for life was over.
These days new university graduates do not expect to stay with the same company for their whole career, rather they plan to use each position as a stepping stone to the next. The average person in the UK is said to hold between 10 and 14 different jobs in their lifetime.
Employees facing the threat of redundancy are reluctant to put their trust in the company and even to put in 100% effort at work. This limits productivity and results in an attitude of “every man for himself”.
Employee engagement: a solution to workplace disharmony
Employee engagement was devised to solve this problem. The idea behind the concept is that engaged employees are more productive, less likely to leave the company and the business is more profitable as a result.
Employee engagement may be a relatively new term but the concepts have been around for a long time. The US Army used the concept of actively engaging soldiers during World War II as a method of improving morale and increasing unity.
As interest in employee engagement has grown over the years, the methods of measuring engagement have also become more sophisticated. In the next article we discuss engagement surveys and their function in the modern workplace (link to evolution of engagement surveys article)
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You’d have to have been living under a rock in the business world not to have heard the term employee engagement. But while many managers recognize the term, surprisingly few actually understand exactly what it means and how utilising it could help to grow their business.
Employee engagement is not a new HR fad or a meaningless buzzword. In fact the ideas behind the successful engagement of employees have been around for thousands of years. It’s said that Alexander the Great was so successful in conquering lands far and wide and building one of the ancient world’s greatest empires because his army was so well engaged and loyal.
So what exactly does employee engagement mean and how can conducting an engagement survey benefit your business?
Employee engagement: a definition
Employee engagement is not a distinct concept and there are many factors that may influence the level of engagement for each individual employee. The fact that engagement is linked with human behaviour, rather than concrete actions, also means it can be quite difficult to measure without careful planning.
There is no one true definition of the term and you might like to think about adopting or constructing a definition that makes the most sense for your organisation.
You can think of employee engagement as being an emotional investment that employees make into the organisation for which they work, which provokes them into higher performance, increased efficiency and an eagerness to strive for and achieve company goals.
Engaged employees don’t just work for the salary they receive at the end of the month or in hopes of receiving a raise or promotion. Rather, they are committed to the success of the company as a whole and see themselves as an integral part of the organisation, instead of as a separate individual.
Employee engagement is not the same as job satisfaction, employee happiness or commitment, although all these things are linked. An actively engaged employee will be loyal to the company and this will reflect in their actions and work achievements, regardless of how happy they may or may not be while at work.
How is employee engagement measured?
Employee engagement surveys are the modern answer to how engagement at work can be effectively measured. Once a measure of current engagement has been taken, it is possible to take steps towards putting an action plan in place in order to increase the level of engagement overall.
Measuring employee engagement on a regular basis is an important factor in employee retention, productivity levels, performance, job satisfaction and other factors that have a direct link to the success of your company.
There are many ways you can get a feel for the general level of employee engagement within your organisation. Informal discussions, employee appraisals and carrying out leaver’s questionnaires can all help you to become more aware of engagement levels within your organisation.
However, carrying out a formal engagement survey will provide you with concrete figures and data so that you can go forward with an action plan for improvement, which can be accurately measured.
Before planning an engagement survey, it is helpful to know some background as to how the modern engagement survey came about and how they are being used in different organisations today. (link to history of employee engagement article).
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There are a number of factors, of course, that can contribute to a situation in which relatively strong, steady sales figures deteriorate.
The first thing that needs to be understood of course is the why? In small organisations this can be solved fairly quickly. In larger more complex organisations the reasons may not be so obvious. It can sometimes take significant cross departmental effort to discover why and how the drop in revenue has occurred.
The classic causes include economic conditions, new competitors or products, political intervention, supplier disruption, pricing wars and degeneration of quality of service/product. The solutions are various but usually have two common themes involving change: Change of service or product, and change of behaviour in the market. Corporate change of behaviour and individual change of behaviour go hand in hand. You can’t change one without the other.
However the first port of call should always be the customer? It is amazing how many organisations, in this day and age of instantly available information, are not close enough to their customers (and their customers’ customers!!) to obtain honest, immediate feedback. In-depth perspectives from the customers are invaluable. Client Satisfaction, Engagement and Focus groups systems form the standard stock, but an often overlooked tool to gain a richer picture of some of the more subtle issues is the use of 360 degree feedback software. These can provide both very granular information of individual behaviour, but also provide clues as the way that an organisation’s behaviour is perceived by the client.
Marketing managers must consider the market in which the product or service is being sold. Has new competition cropped up which makes the product or service seem old-fashioned, expensive, or irrelevant? Managers must conduct market research of potential customers with feedback software tools to determine what the market in that specific area needs, wants, and is likely to purchase. Products and services may need to adapt rapidly if the market is volatile, or if new offerings have appeared in the particular market that the company serves.
Human Resources staff must consider the employees who are responsible for selling the product or serving the customers directly. An inadequately skilled staff, or a disgruntled staff, or an underpaid staff is far less likely to bring in the healthy sales figures needed for sustainable growth. Therefore, it is vital to the future of any corporation that HR staff remain knowledgeable about the needs and capabilities of those they employ. 360 Feedback software can be woven into company web portals to gain a clear understanding of how well employees’ behaviour aligns with the Best Practice requirements of the company. The sales and service staff are the most visible face of the corporation to those who might become customers. If there are indadquecies in that front line, the entire company will suffer.
In conclusion, information is the most valuable tool a company can pursue in the battle to survive an unsteady market. When sales figures drop, the management must act quickly to get as many pertinent facts as possible, in order to stay afloat and come back stronger than ever.
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When you return from that human resources conference, where you heard about the wonders of 360 degree feedback for the first time, it can be tempting to jump right in and start creating your new appraisal system on your first day back at the office. But hold off for a while, and consider that 360 degree feedback creates a major change in the way your employees operate and interact. Big changes should never be entered lightly.
Here are a few ways your new 360 degree feedback system could go wrong, if you are inadequately prepared.
1. You could end up wasting a lot of time, on a system that has no real purpose.
Your 360 degree feedback must have a clear, stated goal before you set out to integrate it into your employees’ daily lives. Because it is infinitely adaptable, you run the risk of trying to assess too much, too often, for no good reason. This will waste company time and money, and become an unnecessary burden to your staff. Decide what you need to know, and who you need to ask, and cut out any unnecessary reporting.
2. You could alienate valuable staff.
Suddenly being asked to report detailed feedback on jobs and managers, when employees had been used to operating with a high degree of anonymity, can cause distress. Employees may feel they are no longer trusted, or that the information they provide could be used against them. Communicate well and often what your purposes are in implementing 360 degree feedback. Help them understand the vision you have for a more cohesive, transparent organization, and show them how they will reap the benefits of the changes.
3. Managers might try to use 360 degree feedback to replace good management techniques.
While employees can certainly benefit from a higher degree of self-awareness provided by the information they get from their new appraisals, this is not a substitute for direct, communicative management. Underperforming employees still need the involvement of a real, live human to help them understand what they need to do better or faster. Simply providing them the information through 360 degree feedback is not enough to cause improvement on its own.
4. You might offend your stakeholders.
Always remember that 360-degree feedback is a major alteration in the way your company communicates and operates. Therefore, it is vital that you make sure the people who have a stake in your company’s success are on board with the changes you want to make. Suddenly implementing a comprehensive appraisal system without notice can raise the hackles of any concerned shareholder, and you could end up in deep water. Get the major decision makers on board before you begin, and keep them up to date on your progress.
5. You could betray your employees’ trust.
Your staff takes a big risk in reporting on the management successes and failures of their superiors, and on their own performance. If information that they considered private is leaked to those in authority over them, your employees could be rightfully outraged and fearful. Be perfectly clear as to what is confidential, what is public, and who reads each report they provide, before you create your feedback system.
6. You could stifle the potential for growth.
Once your employees begin to receive valuable feedback from your new system, they will need resources at their disposal to learn, and room to improve. It would be infuriating to finally understand exactly how you need to change and grow, and have no learning or development resources available to make it happen. Before you implement your 360 degree feedback system, make sure that your organization has the tools in place to develop your staff’s potential to its fullest extent.
With adequate planning and preparation, and a clear goal always kept at the forefront, your new 360 feedback system could help your company accomplish amazing things. But if you want to just jump in, do so at your own risk.
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Psychometrics are only useful if they are valid and relevant to your business. One of the biggest mistakes managers make when investing in psychometrics is choosing tests that are inappropriate or invalid for their business.
Not all tests are the same and pricing, software, analysis and support can vary widely. Before choosing a psychometric to measure, make sure you are working with a reputable provider who will both provide you with a well-constructed test and advise you on the type of testing that will be most beneficial to you.
Selecting a psychometric tool
Different types of tests measure different psychometrics and you first need to decide whether you are more concerned about personality, values, abilities or strengths.
Personality tests can provide useful information for practically any organisation. They can help managers to make decisions about team roles and fit, identify opportunities for staff development, categorise learning and communication styles and anticipate how people will behave in different situations.
Interest tests can be very helpful for identifying employee motivation and planning career development and training programmes.
Ability or aptitude tests are split into several further categories and not all may be relevant to your business. Mechanical reasoning tests, for example, may be very useful for use in engineering roles or those requiring a technical skill, but will be mostly irrelevant to a data administration role
Factors for judging a psychometric test
Price will always be part of the equation for managers struggling to balance their budgets but cheap psychometric tests may result in an ultimately bigger price to pay. If you put value into the theory behind psychometrics, it’s important to invest in a well-developed solution. However the most expensive software is not always the best and different providers also have different pricing models such as pay per use and subscription based. It’s best to shop around a little to investigate different options.
Design is also an important factor to consider. A well-designed test will result in more accurate results. You should also bear in mind how easy the test is to set up and administer and whether it requires supervision to complete. Some organisations may prefer internet-based tests for accessibility, while others will want access to the software restricted to those who are on the business premises.
Equally important as the test itself is the report resulting from the compiled data. Reports should be relevant, easy to understand and represent detailed data in a clear format such as graphs and charts.
Technical information such as validity, reliability and normative data should be included with the test and be backed up with evidence.
For more information on choosing psychometric tests to achieve your goals effectively, please visit PsyMart
Today we take a brief look at the issues of how and why measuring Board effectiveness is so important.
Stay out of jail?
There is no doubt that we live in an increasingly litigious age and that directors and managers of companies are coming under ever increasing pressure to be accountable for their decisions. In a recent Sky News report Corporate Manslaughter cases are up by 40% in the last three years. There is unfortunately very little data to suggest if this has also been reflected in equivalent cases around corporate nonfeasance, misfeasance and malfeasance. One indicator may perhaps be the increasing insurance premiums and expected salaries required of Non-Executive Directors.
Directors of companies are more exposed than ever to the consequences of getting it wrong, well beyond any financial implications of failure. In simple terms if you cannot prove that collective decisions taken by the board were well argued, broadly analysed and risk quantified then each individual on the board is culpable and can individually bear the consequences of any retaliatory mechanisms, including loss of freedom.
The quality and transparency of Corporate Governance is the prime method by which the courts judge a company in cases involving corporate failure.
What is Corporate Governance?
Corporate Governance attempts to define the systems, processes and moral integrity required to manage a company. It is the domain of the board of the company. The board members are required to act as trustees for all stakeholders in the company (shareholders, customers, employees, suppliers and potentially anyone touched by the company’s business).
The public focus on Corporate Governance has, to a certain extent, waxed and waned with economic vicissitude. Over the last 20 years there have been numerous high profile investigations and associated reports, from the famous Cadbury report of 1992 following the Polly Peck and Coloroll collapses to the latest Walker report of 2009 following the massive financial meltdown of 2007/8. History is littered with the examples of systemic corporate failure affecting those far beyond the company’s immediate base. To name just a few in our lifetime that many will remember;
At one time Corporate Governance was considered entirely the province of very large businesses, due to their complexity and potentially devastating consequences of failure. It is important to remember that since the Walker report the same principles of Corporate Governance apply to all companies large and small. Basically if you are fully signed up 288a director of a registered company, no matter how small, you are just as liable for the consequences of your actions as a director in Equitable Life.
Even after the litany of investigations and reports from eminent committees over the last 20 years, the act of signing up t0 Corporate Governance guidelines is still voluntary. The underlying principle being that the act of self regulation matched by the transparent requirement to “comply or explain” is sufficient. This was at the heart of the Cadbury report of 1992 and remains in place to this very day.
Why is it so difficult?
The board of the company needs to steer a transparent and (usually) profitable path between the sometimes intractable needs of all stakeholders. In some companies this is easier than in others. For example, small businesses tend to be less complex and with fewer differences of opinion about the “right” thing to do, however although the consequences of failure may be infinitely less far-reaching than those of larger companies, they still bring significant personal loss and trauma to all involved.
Since the fall out from the Equitable Life fiasco, the recent focus on the role of Non Executive directors and their failings has in some instances created truly adversarial environments that do very little to enhance the quality of decision making and guidance expected of those involved. At it’s worst it can result in extremely conservative decision making that can actually damage the business.
Perhaps the most important recommendation from the most recent investigation after the bank collapse of 2009, the Walker report of 2010, was that deficiencies in board practice are predominantly of behavior rather than of system or process. It’s as much about the way that the board interacts, supports, analyses and challenges each other as about any system or process.
It’s difficult because it’s all about the people and the politics!!
Ten years ago in 2003 Derek Higgs published his report on Corporate Governance in which he recommended best practice behaviours for directors of boards. It’s surely a travesty that such a critically important area of board effectiveness, due perhaps to the voluntary nature of the process, has to be re-iterated and recommended a decade later. The art of developing and monitoring excellent behaviour is applied throughout business, so why is it so difficult for the board members?
What can boards do about it?
Since the financial collapse of 2008 there is ever increasing pressure towards active Corporate Governance, whicn in turn means that there is more pressure to demonstrate that boards are abiding by the code. The declaration of Director responsibilities and increasing quality of Board minutes and actions do appear to be improving matters. The checks and balances for the sytemic, risk and committe are becoming more naturally embedded. However, the issue of demonstrating and measuring best practice behaviour is still relatively barren ground.
Behaviour can only be measured by the effect it has on those people who experience it. There is only one way to measure behaviour, either collective or individual, and that is to ask the people who are affected by it. There is only one tool that can do this effectively and that is 360° Feedback.
Over the years we have created a simple and effective three step approach specifically for Boards wishing to review and develop best practice behaviours.
Step 1 – Review of collective Board behaviour.
Using a standard Corporate Governance framework, individual directors give feedback on the collective performance of the board, defined against an amalgam of generic best practice behaviours as defined by Cadbury, Greenbury, Higgs and Walker. This is followed by a two hour review session with the board to define the areas for potential development.
Benefits
Quick, comprehensive, impersonal and effective as an entry review process because it’s all about the board not any individual directors.
Step 2 – Review of individual Directors
Once the Board members are comfortable with the approach and quality of outcome, then the same process, using a slightly different competence framework focused on individual contribution, can be applied to all Board members. Each director is marked by every other director, and each member receives a personal debrief and individual development plan that they may or may not wish to share with the board.
Benefits
Detailed review enables individual directors to gain insight into the areas where they could make significantly more impact for both their own and the board benefit. It’s where the real differences will take place
Step 3 – 3 month and 6 month “micro” review
To ensure that the behavioural changes have been embedded into the culture a very short review mechanism is introduced to check the board and/or individual development is on track against the specific behaviours that they have committed to develop.
Benefits
Transparency and auditability. Extremely efficient because it focuses only on the important.
What are your experiences of working with boards? How do the behaviours of fellow directors affect your boards ability to perform? Are there underlying tensions between the Execs and Non Execs that are preventing your board from working at its best?
If you would like to discuss any aspect of this article further we would love to hear from you.
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