Employee Testing and Selection

Employee Testing and Selection

Lecture Outline:

Why Employee Selection Is Important

The Basics of Testing and Selecting Employees 

Reliability

Validity

Evidence-Based HR:  How to Validate a Test

Bias

Utility Analysis

Validity Generalization

Test Takers’ Individual Rights and Test Security

How Do Employers Use Tests at Work?

Types of Tests

Tests of Cognitive Abilities

Tests of Motor and Physical Abilities

Measuring Personality and Interests

Achievement Tests

Work Samples and Simulations

Using Work Sampling for Employee Selection    

Situational Judgment Tests

Management Assessment Centers

Situational Testing/Video-Based Situational Testing

The Miniature Job Training and Evaluation Approach

Realistic Job Previews

Choosing a Selection Method

Background Investigations and Other Selection Methods

Why Perform Background Investigations and Reference Checks?

How to Check a Candidate’s Background

      Social Media and HR

      Using Pre-employment Information Services

The Polygraph and Honesty Testing

Graphology

“Human Lie Detectors”

Physical Exams

Substance Abuse Screening

Complying with Immigration Law 

In Brief:

This chapter gives an overview of the selection process, testing concepts, types of tests, and selection techniques.  It also addresses legal and ethical questions surrounding the area of testing and selection.

Interesting Issues:

Reference checking is part of the care an employer must take to ensure that the potential employee will not pose a threat to current employees or customers. Employers who fail to exercise “due diligence” in checking a job candidate’s background may find themselves legally liable if the candidate is hired and subsequently uses the job to commit a crime. Liability may even extend to offenses that occur outside of work time.

Learning Objectives:

1. Answer the questions: Why is it important to test and select employees?

2. Explain what is meant by reliability and validity.

3. List and briefly describe the basic categories of selection tests, with examples. 

4. Explain how to use two work simulations for selection.

5. Describe four ways to improve an employer’s background checking process.

Annotated Outline:

I.  Why Employee Selection Is Important - Selecting the right employees is important for three main reasons:  1) employees with the right skills and attributes will perform more effectively; 2) the cost of making a wrong hire can become exhorbitant considering the time and money invested in the selection and training process; and 3) there are legal implications of incompetent or negligent hiring. 

II. The Basics of Testing and Selecting Employees 

     A. Reliability refers to the consistency of scores obtained by the same person when retested with the identical or equivalent tests. You can measure reliability in several ways. One is to administer a test to a group of people one day, re-administer the same test several days later to the same group, and then correlate the first set of scores with the second (test-retest reliability estimates).  Or you could administer a test and then administer what experts believe to be an equivalent test later; this would be an equivalent or alternate form estimate. Or, compare the test taker's answers to certain questions on the test with his or her answers to a separate set of questions on the same test aimed at measuring the same thing.  

      B. Validity refers to evidence that performance on a test is a valid predictor of                  subsequent performance on the job.

1. Test validity answers the question “Does this test measure what

it’s supposed to measure?” Put another way, validity refers to the correctness of the inferences that we can make based on the test.

2. Criterion validity shows that scores on the test (predictors) are related to job performance. It involves demonstrating statistically a relationship between scores on a selection procedure and the job performance of a sample of workers.

3. Content validity shows that the test contains a fair sample of the tasks and skills actually needed for the job in question.

4. Construct validity involves demonstrating that (a) a selection procedure measures a construct (something believed to be an underlying human trait or characteristic, such as honesty) and (b) the construct is important for successful job performance.

C. Evidence-Based HR: How to Validate a Test – This section discusses the steps in the  validation process as well as the role that bias plays in validation. Utility analysis and validity generalization are also addressed.

1. Analyze the job and write job descriptions and job specifications.

2. Choose the tests that measure the attributes (predictors) important for job success.

3. Administer the test selected to old or new employees for concurrent and predictive validation.

4. Relate test scores and criteria through a correlation analysis, which shows the degree of statistical relationship between (1) scores on the test and (2) job performance.

5. Cross-validate and revalidate by performing steps 3 and 4 on a new sample of employees. Testing guidelines: 1) use tests as supplements; 2) validate the tests; 3) analyze all your current hiring and promotion standards; 4) keep accurate records; 5) begin your validation program now; 6) use a certified psychologist; and 7) test conditions are important. 

6. Who Scores the Test? – Some tests are professionally scored and interpreted but some allow the employer to score the test.

  D. Bias usually occurs in two ways: 1) how the test measures the trait, and 2) the predictions made with the test results. Employers must be careful to avoid bias whenever possible.

  E. Utility Analysis - Knowing the test is reliable and valid is important, but one must also consider the practical use of the test.  Completing a utility analysis shows the degree to which a selection test improves the quality of those selected versus what decision would have been made without it. Utility analysis usually includes the validity of the measures, a measure of job performance in dollars, the applicant’s average test scores, the cost of the measure, and the number of applicants tested and selected.

    F. Validity Generalization - is the degree to which evidence of a measure’s validity in    one situation can be used as a measure of validity in other situations. 

           G. Test Takers’ Individual Rights and Test Security – Test takers have certain rights to   privacy and information under the American Psychological Association’s (APA) standard for educational and psychological tests.

1.  Privacy Issues – Supreme Court decisions provide protection against the disclosure of employee information to people outside the company. Organizations should train supervisors regarding confidentiality and adopt a “need to know” policy to protect information. Disclosure of procedures may also limit liability.

H. How Do Employees Use Tests at Work? – Various types of tests are widely used by   employers today, including those for basic skills, job skills, and psychological measurement. 

III. Types of Tests

A. Tests of Cognitive Abilities - Cognitive tests include tests of general reasoning ability (intelligence) and tests of specific mental abilities like memory and inductive reasoning.

     1. Intelligence tests are tests of general intellectual abilities ranging from memory, vocabulary, and verbal fluency to numerical ability.

     2. Specific cognitive abilities (aptitudes) include inductive and deductive reasoning, verbal comprehension, memory, and numerical ability.

B.  Tests of Motor and Physical Abilities - Employers may use various tests to measure such motor abilities as finger dexterity, manual dexterity, and reaction time.  They may also want to measure such physical abilities as static strength, dynamic strength, body coordination, and stamina.

C.  Measuring Personality and Interests can be used to assess characteristics     such as attitude, motivation, and temperament.

      1. What Personality Tests Measure – Tests measure basic aspects of an applicant’s personality, such as introversion, stability, and motivation.

2. The "Big Five" – Industrial psychologists emphasize five personality dimensions as they apply to personnel testing: extraversion, emotional stability, agreeableness, conscientiousness, and openness to experience.  

3. Do Personality Tests Predict Performance?  Personality tests do correlate with job performance in a number of areas. Different traits are predictive of different jobs. 

4. Caveats – Personality tests are the most difficult tests to evaluate and use. Recent court decisions indicate that the Minnesota Multiphasic Personality Inventory (MMPI) is a medical test because it can screen out applicants with psychological impairment, and that its use before an employment offer is made is therefore a violation of ADA. Also, some dispute that self-report tests predict performance at all. 

5. Interest inventories compare a person’s interests with those of people in various occupations.

    D. Achievement Tests

      1.  Computerized multimedia candidate assessment tools are systems specifically designed for each company to measure any type of skill of ability.

IV. Work Samples and Simulations

A. Using Work Sampling for Employee Selection  

      1. Basic Procedure – is to choose several tasks crucial to performing the job in question and to test applicants on those identified tasks. 

B. Situational Judgment Tests - These tests are designed to assess an applicant’s judgment regarding a situation encountered in the workplace. 

C. Management Assessment Centers provide simulations in which candidates perform realistic management tasks under the observation of experts who appraise each candidate’s potential. Simulated exercises include in-basket, leaderless group discussion, management games, individual presentations, objective tests, and interviews.

D. Situational Testing/Video-Based Situational Testing - typically present the candidate with several scenarios, each followed by a multiple-choice question.

E. The Miniature Job Training and Evaluation Approach involves training candidates to perform a sample of job tasks and evaluating candidates’ performance.

F. Realistic Job Previews - Being explicit about work schedules, preferences, and other job standards at the point of interview can help reduce turnover later.

G. Choosing a Selection Method

V.  Background Investigations and Other Selection Methods

A. Why Perform Background Investigations and Reference Checks? - Most employers check and verify an applicant’s background information and references, including driving record, check for criminal charges or convictions, and credit check.

1. Why Check?  The main reasons for conducting investigations into an applicant’s background are to verify factual information and to uncover damaging information to help prevent losses.

2. Effectiveness – Reference letters are not viewed as very useful. Fewer than half of HR managers state that they were able to obtain adequate information about candidates.

B. How to Check a Candidate’s Background - Most employers at least try to verify an applicant’s current or former position and salary with current or former employers by phone, assuming permission was given by the candidate. Employers should include on their application forms a statement for applicants to sign that explicitly authorizes a background check; rely more on telephone references than written ones; ask open-ended questions;  use each reference as a source for another; and watch for “red flags.” 

C. Social Media and HR - Checking Applicants’ Social Postings - A new technique for exploring applicants’ qualifications is checking social networking sites or using Google to run  searches on the applicant. There are some legal issues with checking social networking sites. Organizations need to be careful when using this information for employment decisions. 

D. Using Pre-employment Information Services - Various federal and state laws govern how employers acquire and use applicants' and employees' background information.  Compliance involves four steps: 1) Disclosure and authorization; 2) Certification; 3) Providing copies of the reports; and 4) Notice after adverse action.

E. The Polygraph and Honesty Testing

1. Paper-and-Pencil Honest Test

F.   Graphology – (handwriting analysis) assumes that handwriting reflects basic personality traits. 

G. “Human Lie Detectors” are experts who may be able to identify lying just by watching the applicant. The expert watches for signs of deception such as irregular breathing or pupils changing size.

H. Physical Exams - Once an offer is made and the person is hired, a 

medical exam is usually the next step in the selection process.

I.  Substance Abuse Screening - Because drug abuse is a serious problem for employers, it is common practice for most employers to conduct drug screening just before employees are formally hired.

1. Some Practical Considerations – Because drug testing indicates only the presence or absence of drugs, it can’t measure the level of impairment or addiction. Some argue that the testing is therefore not justifiable if workplace safety is the motivator for using tests.

J.  Complying with Immigration Law - Under the Immigration Reform and Control Act of 1986, employees hired in the U.S. have to prove they are eligible to work in the U.S. Immigrants face increasing difficulty in entering the U.S. Figure 6-10 outlines procedures to comply with immigration laws.

   1. Proof of Eligibility – Restrictions on hiring undocumented workers

       have tightened. Employers should be careful to obtain and verify       documents.   

Improving Performance Questions:  

6-1: Choose a position with which you are familiar, such as a counterperson at a McDonalds restaurant, and describe how you would create a selection process for it similar to those in this feature.

6-2: In what ways do you think the questions you put on a selection test in China might differ from those on a test in the United States, and why?

6-3: You own a small ladies’ dress shop in a mall and want to hire a salesperson. Create a test for doing so.

6-4: Evaluate Figure 6-9; what other questions would you ask, and why?

6-5: What other blunt questions do you think would be appropriate?

Discussion Questions:

6-6: What is the difference between reliability and validity?  

Reliability is the consistency of scores obtained by the same person when retested with identical tests or with an equivalent form of a test.  It is a measure of internal consistency of the instrument.  Validity is the degree to which a test measures what it is purported to measure.  It is a measure of external consistency.  They are similar in that both are concerned with aspects of consistency of the instrument, and that reliability is a necessary condition for validity.  

6-7: Explain why you think a certified psychologist who is specially trained in test construction should (or should not) be used by a small business that needs an employment test.  

Due to the complex and legal nature of this activity, the use of a certified psychologist may be the only safe way to accomplish your objectives.  However, because of the high salary and limited job scope of such a specialist, a definite drawback to this approach is the cost involved.  Perhaps more "direct" tests can be developed which require less sophistication:  motor and physical abilities tests (many state employment agencies provide this service), on-job knowledge tests, and work sampling.  This chapter also presents some alternative testing tools that are relatively easy to administer and low in cost and that are reasonable choices for small employers to use. 

6-8:  Why is it important to conduct pre-employment background investigations?  How would you do so?  

Past behavior is the best predictor of future behavior.  It is important to gain as much information as possible about past behavior to understand what kinds of behavior one can expect in the future.  Knowledge about attendance problems, insubordination issues, theft, or other behavioral problems can certainly help one avoid hiring someone who is likely to repeat those behaviors.  The section on background investigations and reference checks has some excellent guidelines for background checks. 

6-9:  Explain how you would get around the problem of former employers being unwilling to give bad references on their former employees. 

Since many companies have strict policies regarding the release of information about former employees, it may not be possible to get information at all, good or bad.  However, conducting a thorough reference audit by contacting at least two superiors, two peers, and two subordinates will help increase the chance that you will find someone who is willing to give you the information you need.  Also, making the contacts by phone rather than in writing will increase their belief that the information may not be traced back to them.  Using the additional technique of asking references for the name of someone else who might be familiar with the applicant's performance will also increase the possibility of getting more information. 

6-10:  How can employers protect themselves against negligent hiring claims?  

There is a list of ways employers can protect themselves against negligent hiring claims discussed in the section on why careful selection is important at the beginning of the chapter. 

Individual and Group Activities: 

6-11: Write a short essay discussing some of the ethical and legal considerations in testing.  

State and federal laws, EEOC  guidelines, and court decisions require that you must be able to prove that your tests are related to success or failure on the job and that they are not having an adverse impact on members of a protected group.  Test takers also have certain basic rights to privacy and information.  The test taker also has the right to expect that the test is equally fair to all test takers. 

6-12: Working individually or in groups, develop a list of specific selection techniques that you would suggest your dean use to hire the next HR professor at your school. Explain why you chose each selection technique.  

The students should use the selection information presented in the chapter to list their selection techniques of choice with their supporting rationale. 

6-13: Working individually or in groups, contact the publisher of a standardized test such as the Scholastic Assessment Test and obtain from them written information regarding the test's validity and reliability.  Present a short report in class discussing what the test is supposed to measure and the degree to which you think the test does what it is supposed to do, based on the reported validity and reliability scores.  

Encourage students to contact different sources; it may be a good idea to have a sign-up sheet so that no two students or groups are gathering information about the same instrument.  Students should be able to relate validity and reliability scores to effectiveness. 

6-14: Appendix A, PHR and SPHR Knowledge Base at the end of this book lists the knowledge someone studying for the HRCI certification exam needs to have  in each area of human resource management (such as in Strategic Management, Workforce Planning, and Human Resource Development).  In groups of 4-5 students, do four things: (1) review Appendix A; (2) identify the material in this chapter that relates to the required knowledge Appendix A lists; (3) write four multiple-choice exam questions on this material that you believe would be suitable for inclusion in the HRCI exam; and (4) if time permits, have someone from your team post your team's questions in front of the class, so that students in all teams can answer the exam questions created by the other teams.  

Material included in this chapter that relates to the HRCI certification exam includes establishing and implementing selection procedures of testing; reference and background checking; post-offer employment activities; knowledge of reliability and validity of selection tests/tools/methods; and use and interpretation of selection tests. 

Experiential Exercises:

Experiential Exercise: A Test for a Reservation Clerk

Purpose: The purpose of this excericise is to give you practice in devlopeing a test to measure one specific ablilty for the job of airline reservation clerk for a major airline. If time permits, you’ll be able to combine your tests into a test battery. 

Required Understanding: Your airline has decided to outsource its reservations jobs to Asia. You should be fully acquainted with the procedure for developing a personnel test and should read the following description of an airline reservation clerks duties.

How to Set up the Exercise/Instructions: Divide the class into teams of five or six students. The ideal candidate will need to have a number of skills and abilities to perform this job well. Your job is to select a single ability and to develop a test to measure that ability. Use only the materials available in the room, please. The test should permit quantitative scoring and may be an individual or group test.

Each group should then rate the importance of these abilities on a five-point scale. Then, develop a test to measure what you believe to be the top ranked ability. If time permits the group should combine the various test from each group into a test battery. If possible, leave time for a group of students to take the test battery.

Video Case Appendix:

Video Title: Employee Testing and Selection (Patagonia) 

Synopsis: 

Patagonia strives to select employees whose values are in sync with the philosophies and values of the company.  The interviewing process is a multifaceted one, in which candidates take part in several group interviews. These interviews follow a very controversial style, in an attempt to reveal as much about a potential employees interests, passions, and personality as possible. It is important that those hired by Patagonia not only have an interest in outdoor activities and the products the company produces, but also are passionate about preserving the environment which is the mission of Patagonia.

Discussion Questions:

6-15: If you had to create a talent management – type job profile for the average employee at Patagonia, what would the profile look like in terms of its specific content?

6-16: What trait does Patagonia look for in its future employees during the interview process?

6-17: In what respects does Patagonia's employee selection process reflect a talent management approach to selection? 

6-18: What is the employee turnover rate at Patagonia? Is it higher or lower than the industry average? What reason can you give for why Patagonia's turnover rate is as you described?

6-19: Describe the interview process used by Patagonia. How is this process similar to others in the industry? How does the process used by Patagonia differ?

Application Case:  The Insider 

6-20: We want you to design an employee selection program for hiring stock traders. We already know what to look for as far as technical skills are concerned – accounting courses, economics, and so on. What we want is a program for screening out potential bad apples. To that end, please let us know the following: What screening tests would you suggest, and why? What questions should we add to our application form? Specifically, how should we check candidates’ back-grounds, and what questions should we ask previous employers and references?

      Students should consider the different types of selection measures that they believe should be included.

6-21: What else (if anything) would you suggest?  

      Students should list (and be ready to defend) the specifications that they believe would be needed.

Continuing Case: Carter Cleaning Company - Honesty Testing at Carter Cleaning Company 

6-22: What would be the advantages and disadvantages to Jennifer’s company of routinely administering honesty tests to all its employees? 

Polygraph testing raises a large number of legal and moral issues, issues Carter Cleaning would best avoid. Use of some of the available “paper–and-pencil” honesty tests may be a possibility.  In general, these have been shown to be reasonably reliable and valid, but they are still controversial.  The costs associated with these tests may also make them prohibitive to a small operation like Jennifer’s.

6-23: Specifically, what other screening techniques could the company use to screen out theft-prone and turnover-prone employees, and how exactly could these be used? 

More thorough background checks are a recommended technique to eliminate potential thieves.  Some firms choose to contract this out to a private security agency, although cost may be an issue to Jennifer. However, the company can quickly check to see if savings from reduced theft would offset the cost of an outside agency. As part of the job preview, Carter must communicate that dishonesty and theft will not be tolerated.  Further, company policies regarding theft should be clearly communicated to new and existing employees. 

6-24: How should her company terminate employees caught stealing, and what kind of procedure should be set up for handling reference calls about these employees when they go to other companies looking for jobs? 

Terminating employees for theft should include the involvement of proper authorities and should only be done when there is absolute proof of the theft and who committed it. Such an action will also send a message to the other employees that you will not tolerate theft of company resources.  While many employers are reluctant to prosecute employees for theft, developing evidence with police and through the courts can be beneficial in providing future employers of the individual with truthful and factual information.

Hotel Paris: Improving Performance at the Hotel Paris – The New Employee Testing Program

 6-25: Provide a detailed example of a security guard work sample test. 

Students should begin by discussing the types of tasks a security guard is responsible for. 

6-26: Provide a detailed example of two possible personality test items you would suggest they use, and why you would and use them.

Answers will vary. 

6-27: What other tests would you suggest to Lisa, and why would you suggest them?

Because front desk employees usually handle credit cards and make cash transactions, Lisa should consider the benefits of paper-and-pencil honesty testing.

6-28:  How would you suggest Lisa try to confirm that it is indeed the testing and not some     other change that accounts for the improved performance? 

Answers will vary.

Key Terms:

Negligent Hiring - Hiring workers with criminal backgrounds without proper safeguards.

Reliability - The characteristic which refers to the consistency of scores obtained by the same

person when retested with identical or equivalent tests.

Test Validity - The accuracy with which a test, interview, and so on measures what it purports to measure or fulfills the function it was designed to fill.

Criterion Validity - A type of validity based on showing that scores on the test (predictors) are related to job performance.

Content Validity - A test that is content valid is one in which the test contains a fair sample of the tasks and skills actually needed for the job in question.

Construct Validity - A test that is construct valid is one that demonstrates that a selection procedure measures a construct and that construct is important for successful job performance.

Expectancy Chart - A graph showing the relationship between test scores and job performance for a large group of people.

Interest Inventory - A personal development and selection device that compares the person’s current interests with those of others now in various occupations so as to determine the preferred occupation for the individual.

Work Samples - Actual job tasks used in testing applicants' performance.  

Work Sampling Technique  - A testing method based on measuring performance on actual job tasks.

Management Assessment Center - A situation in which management candidates are asked to make decisions in hypothetical situations and are scored on their performance.  It usually also involves testing and the use of management games.

Situational Test  - Requires examinees to respond to situations representative of the job.

Video-based Simulation - A test in which examinees respond to video simulation of realistic job situations.

Miniature Job Training and Evaluation - Training candidates to perform several of the job’s tasks, and then evaluating the candidates prior to hire.

（中国经济管理大学MBA公益课堂---美华管理人才学校---28年知名管理培训机构）

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