A recent study indicated that 95% of applicants exaggerate during their job interview, and 50% misrepresent their qualifications on their resume. Is it any wonder that two thirds of all new-hires will disappoint their supervisor or manager within the first year of their employment?
According to the Journal of Applied Psychology, the two most common selection procedures used by companies today, the Training and Experience Point Method and Reference Checks are also the two procedures least likely to be a predictor of overall job performance. Not surprisingly to experts at pan, Work Samples, Structured Interviews, and Tests and Assessments have considerably more linkage to overall job performance.
Link Selection Procedures to Overall Job Performance
Tests and assessments are no longer used solely by the largest companies; companies of all sizes are realizing the benefit of finding the right talent for the right job at the right time -- in fact over half of all U.S. firms use some type of assessment in their hiring practice. With the cost of replacing workers at 6-18 months of an employee s salary, ensuring that there is a good fit between the skills and abilities of an applicant and the job they are applying for makes good business and financial sense.
As more companies undertake "competency modeling", the use of valid tests and assessments becomes even more important. A competency is a personal characteristic (skill, knowledge, or motive) that drives behavior leading to superior performance. A job competency model is a description of those competencies possessed by the top performers in a specific job or job family. Once the competencies of a particular job or job family are known, selection experts can determine the tests or assessments that best measure those skills and abilities.
Aptitude testing has long been recognized as an important step in the hiring process for many jobs. Whether assessing an applicant s mechanical or technical aptitude, valid tests provide an objective measurement of a job applicant s knowledge, skills, and abilities. In fact, studies have shown that top-performing workers identified by pre-hire screening are 2 to 3 times more productive than their average co-worker. However, more and more companies understand the benefits of testing for "culture fit" as well.
The majority of the personality tests measure a five-factor framework, known as the "big five": emotional stability, extraversion, openness to experience, conscientiousness, and agreeableness. These personality tests allow the organization to learn more about the applicant, but just as importantly, help in assessing how the employee will fit in with their co-workers and managers. Employees don t "quit a company," they quit a boss or the other employees they work with on a daily basis. These personality tests are also being used along with 360 ° Feedback Surveys in coaching supervisors and managers, working with current and future leaders of the organization, and team building.
The Business Case for Tests and Assessments
The public scandals that have plagued businesses for the last decade or so have led to an increase in the use of ethics or integrity tests in businesses of all sizes. Pre-employment ethics/integrity tests have been shown to predict tardiness and absenteeism, potential disciplinary problems, even job satisfaction and tenure. Whether retailers are trying to reduce "shrinkage," or call center managers want to ensure that credit card information will not be stolen by customer service representatives (CSRs), integrity tests have been shown to predict antisocial or counterproductive behaviors in applicants.
An industry white paper reported in 1998 that 60% of firms have been defendants in employment-practices or wrongful termination lawsuits. Although no federal or state laws require nor prohibit the use of testing for pre-employment selection, due diligence creates important implications for hiring, promoting, and terminating through Title VII of the Civil Rights Act, the Uniform Guidelines on Employee Selection Procedures, and other laws designed to reduce discrimination based on age, gender, or disability. According to a SHRM Legal Report:
"Testing provides probative evidence that the employer met its duty to
Investigate reasonably an applicant s fitness. Companies that adopt pre-
employment integrity test to screen job applicants can reduce their exposure
to negligent hiring claims."
The use of valid tests and assessments in a company s selection process can also save valuable time and money. According to the Reid Report, one Fortune 10 retailer averaged an employee retention rate of 75% after beginning a pre-screening testing process for applicants, saving hiring managers 15-20 minutes of every hour they spent. Sherwin Williams reported the use of assessments reduced the number of interviews conducted by more than 5,000 per year.
A Fortune 50 consumer goods company cut sales turnover from 32% to 14% through the use of a biodata assessment (questions about past life experiences) and saved $10,000 per retained employee. UPS reduced turnover 33% in the package handler position through the increased use of pre-employment tests. Similarly, Procter & Gamble estimated that time-to-job offer was reduced by 70% and that turnover in sales positions had dropped by half.
Finally, there is a significant link between a company s decision to administer a pre-employment test and assessment and the employee s engagement with their organization. In pan s 2004-2005 National Study on Workforce Engagement, employees who were given a pre-employment assessment were:
- Much more positive about their organization s performance in all of the drivers of workforce engagement;
- Much more positive about issues related to fairness, company communications, and their relationship with their supervisor;
- More positive in their perceptions of how they are treated compared to employees with similar jobs at other companies;
- Much more likely to be fully engaged, leading to decreased turnover, improved performance, and increased customer satisfaction, retention, and repeat purchase;
- Significantly less likely to be unengaged, no longer putting customer relationships at risk.
Companies of all sizes are better understanding the difference between selection and. hiring. Ensuring that an applicant has the skills, abilities, personality and competencies to meet and exceed internal and external expectations is no longer a "nice to have" for today s employers. Why hire a sure fire?
About the Author
Marc Drizin is director of workforce engagement and survey solutions at Performance Assessment Network, Inc. (pan). Drizin is an authority on employee loyalty and engagement and a frequent speaker at HR industry conferences. He is the co-author of an upcoming book "Employee Hold emTM: Strategies to Recruit, Retrain, Reward, and Retain Talent" (WorldatWork, 2006). For more information, visit www.panpowered.com.
