Fundamentals of Testing in Business

"What you DON'T know about testing can hurt you "“ what you DO know can help you!"

Considering the costs of recruiting, interviewing and training, the total direct and hidden cost of hiring a person who does not succeed in your company could be as much as 200% of the person's salary. Turnover will also have a negative impact on productivity and profitability in any organization. One of the most effective ways to narrow your margin of error in the hiring process, and avoid the negative impact of lost money, lost time and morale problems, is to employ a system of well-validated tests as part of the selection process. Reasons for the use of an appropriate selection testing process include:

As noted above, the cost of hiring the wrong person can be prohibitive.
Properly constructed and validated tests can provide you with a great deal of information about how the candidate will perform on the job.
Tests let you get to know a candidate more quickly.
Validated tests provide a more objective approach than making decisions based on loose interviewing techniques and gut feelings.
A good selection system speeds up the hiring process.
Testing can help you maintain high standards during periods of fast growth.
Tests provide hiring managers easy and practical tools to make better decisions.

The appropriate use of the right kinds of tests can address these and other important business issues. However, the use of tests is not an automatic guarantee of success. The improper use of tests can get you in legal trouble and wastes time and money. The need to attract people and the pressures on recruiters to fill slots is sometimes at odds with the quality control aspect of a selection testing system. Any selection process must not only help you to hire people who have a better chance of being successful on the job than a non-screened candidate, it must also be fair and not discriminate on non-job-related factors. We will talk more about this in the section on validation.

Basic Types of Tests

The major types of tests are listed below. Some of these are suitable for an employment selection setting, but some should not be used for such purposes.

Aptitude Tests. These include math, language, space relations, mechanical, general intelligence, mental agility, etc. These types of tests are often part of validated selection batteries. However, they can also be lightning rods for litigation if you cannot show that they are related to success on the job. Some tests in this category have adverse impact. That is, they tend to penalize some groups unfairly. Unless you can show that the specific aptitude under consideration is a bona fide occupation qualification (BFOQ), you should not be testing for it, especially if there is a chance for adverse impact. Adverse impact is discussed further in the later section on validation.

Physical abilities tests: e.g., strength, endurance, manual dexterity, eyesight, hearing. These are most appropriate for positions requiring physical labor and activity. These may also have adverse impact, particularly if the results disproportionately exclude women. Proof that the ability and degree of ability required are related to test performance is a must.

Clinical instruments such as the Minnesota Multiphasic Personality Inventory (MMPI) or the California Personality Inventory (CPI) are designed to diagnose pathology and not appropriate for business use. However, the exception is for positions which could place the public at risk, such as armed guard, airline pilot, etc. If you are selecting for such positions, you may be at risk if you're not using such measures. In these cases, you could face a negligent hiring suit for not screening for the types of pathologies identified by clinical instruments. But in general, they should not be used for business applications. They often contain intrusive or objectionable items, and they may be considered medical tests under ADA (Americans with Disabilities Act) guidelines. Medical testing is prohibited as a pre-hire requisite.

Knowledge/achievement tests are used to assess mastery of course material, vocabulary, spreadsheet, word processing, etc. These are often more useful in training than selection, but if the job requires specific skills, these tests can be quite useful.

Interest inventories: e.g., the Strong Interest Inventory and the Campbell Interest and Skills Survey are useful for career guidance to help a person compare the strength of his or her interest patterns with those of people in a wide range of occupations. They are typically not included in selection test batteries.

Personality typing, such as the Myers Briggs Type Indicator (MBTI) are widely used for team building and self-insight but are not recommended for selection situations. For instance, about half of the people in business organizations fall into just two of the sixteen types described by the MBTI, and fewer than 10% fall into any one of eight particular types combined. There is not enough variability to be useful for selection applications. They are often easy to fake, and their link to actual job performance is typically not significant.

Personality inventories such as the eTest Personality Inventory, Sixteen Personality Factor Inventory (16 PF) and Hogan Personality Inventory are often part of a selection battery for business applications. In contrast to shorter personality typing measures such as the MBTI, all of these inventories have been validated in business settings and used in a broad range of jobs. The eTest instrument was designed specifically for use in a business context, while the others were developed to measure personality in the general population but have been adapted for business uses. Personality inventories are useful in understanding normal behavioral patterns of individuals and are often related to performance on the job, as opposed to clinical personality measures such as the MMPI, which were developed to diagnose psychological pathologies and problems. General population and business-normed personality inventories typically paint a comprehensive picture of the wide varieties of normal personality differences in people.

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