SAN MATEO (05/01/2000) - 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. In the interest of filling seats, many companies tend to overlook a candidate's less tangible qualifications, such as temperament, attitude, work style, and personality. 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 for business-critical roles. 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," says Dr. Mitch Rothstein, professor of Organizational Behavior at Ivey Business School, in Ontario, Canada, 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 percent 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," says 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), says his firm has been getting more business recently, because an estimated 35 percent of new hires fail.
"This is incredibly expensive," Resnikoff says, "and not just in terms of hard costs like signing bonuses and relocation expenses, but in terms of productivity loss, which could cost an organization millions if the employee was senior level."
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, California, 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 says. "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 says. Those statements do not effectively differentiate between applicants or identify real and unique attributes of a single candidate, he says.
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 urges. "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, Massachusetts, 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 behavior. 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.
It includes a built-in "faking scale" that detects any significant self-misrepresentation by the test-taker. In addition, "many of the questions are neutrally loaded -- there is no clearly desirable answer," Resnikoff explains.
These high-end evaluations are expensive; HCG charges between $3,000 and $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.
"Hiring mistakes are 100 times more costly than using Hagberg's process," Thomas says. "If you hire the wrong executive or senior manager, it is a disturbance to your entire business."
Raising red flags
There are also companies, such as MPG, that offer cheaper, less comprehensive testing services. MPG's Web-based Business Check List (BCL) test is an assessment tool developed by psychologists that includes three sections: cognitive ability, vocabulary, and psychology. The psychological portion asks candidates to read 317 different adjectives and indicate how well each adjective describes them. At $150 per candidate tested, this evaluation is usually used to gather information about the personality and potential performance of an entry-level or midlevel hire.
The BCL takes about an hour to complete online and the results are transmitted to both the company and candidate in 15 minutes. The results contain a narrative description of the candidate's profile and a list of suggested questions for the hiring manager to use in further interviews and reference checks.
However, some experts believe that these less expensive tests are not worthwhile.
"They may be useful as a developmental tool for present employees, but not as a hiring tool," IDC's Boyd says. "In the hiring process, it is important to use trained psychologists to help you interpret the results."
But Lisa Justice, a human resources consultant at Acsys, a national staffing company in Atlanta that places technology professionals, has only good things to say about the BCL. "The test is more than worthwhile because the costs of turnover can be exorbitant," Justice says. "We compare the candidate's results against benchmark personality traits we've found to indicate success among our employees."
Justice emphasizes that her company uses the test to drive interview questions, not as a definitive psychological assessment. But as she points out, "it's a great interviewing tool because it raises red flags in areas we may otherwise have missed."
Keeping candidates in mind
And what about the candidates? Do they mind taking these tests? Not according to Justice. "They don't mind taking them at all," she says. "We make sure they know it's not a pass/ fail situation and that it's only one part of our hiring process."
Most candidates are willing to suffer through tests if it means getting a job, explains Ivey Business School's Rothstein. "Testing has become so widespread that people have gotten used to it," he says. "Also, professional practice in this area requires organizations to brief candidates appropriately about the testing and provide feedback," Rothstein continues. "So although some people certainly don't like the testing, it has not created a major problem."
Pat Lambs went through HCG's testing process before getting her current job as vice president of Service Solutions at Linuxcare. She was unfazed by the psychological assessment and found the test results to be dead on.
"I don't see these tests as a deterrent at all," Lambs says. "The test was accurate within 80 to 95 percent of my own self-evaluation and feedback I've gotten over the years."
Similarly, Pat Kennedy, executive vice president and COO of information technology at Acsys, took the BCL test during her interview process.
"The test was not in the least bit intimidating," Kennedy says. "In fact, it makes me more comfortable knowing that the people coming into my company are a good fit."
Denise Ryan (email@example.com) is an assistant editor in the InfoWorld Test Center.
Taken with a grain of salt
Organizations seeking a simple cure for the employee-selection blues will not find it through psychological testing alone. Although some industry professionals swear by the reliability of these tests, the results of any third-party assessment should always be questioned. There are inconsistencies inherent in the process, and factors such as fatigue, stress level, mood, and luck can adversely or beneficially affect a test-taker's score.
Another factor to look out for is conflicting test results for a particular applicant, which make it necessary for you to weed out useful data from inaccurate information. For instance, a candidate who takes MPG's Business Check List may be characterized as intolerant, patient, disorganized, and hyperorganized all in one page. So use these as a starting ground for further discussion.
Choosing a testing agency
Any company thinking about using psychological tests as part of their employee selection process should get advice from a reputable testing agency, according to Dr. Mitch Rothstein, professor of Organizational Behavior at Ivey Business School, in Ontario, Canada. How do you choose from among the hundreds of companies that provide pre-hire assessment services? Following are some guidelines.
Select a company that has been in business for several years and has experience working with a variety of organizations.
Even if you only need a basic test for entry-level or midlevel hires, choose a provider that offers a range of evaluation services, including executive assessment. These companies are likely to have the most extensive experience in the field.
Be certain the company's staff includes industry psychologists who develop the tests and direct interpretation.
Make sure the company provides a written report stating the validity of the test you will be using, as well as information regarding pertinent legal issues and requirements.
Never use a test that definitively assigns particular characteristics to an applicant, e.g. disorganized, hot-tempered, and so on. The test results should be used as part of the evaluation process only, never as a final basis of judgment. "If a test conclusively states that a candidate is dishonest, for example, it is very difficult for the hiring party to be fair," says Lewis Maltby, director at the American Civil Liberties Union's Workplace Rights Task Force.