H E A LT H W E A LT H C A R E E R

A P P L I C AT I O N O F
PSYCHOMETRIC
TESTS IN AN
O R G A N I Z AT I O N
How Psychometric Tests Impact
Your Business Outcomes
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CONTENT
1. Introduction

2. Application of Psychometric
Tests in an Organization

• Recruitment
• Training & Development
• Organizational Planning
• Performance Evaluation
• Employee Engagement

3. Conclusion
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IN T ROD UC T ION
Nowadays, making predictions is essential: we need to anticipate the
climate, sports results, monetary information, and so forth. It just
bodes well that the business world is going with the same pattern. To
this end, vast organizations have been utilizing psychometric tests
for quite a while now, to foresee individual behavior before recruit-

68% of organizations
ing, advancement and other necessary activities.

The Society for Industrial & Organizational Psychology (SIOP) cites

from their research that an active 68% of organizations to engage in
various forms of job skill testing. This transcends to about 29% when to engage in various forms
it comes to one or more forms of psychological measurement and
around 20% for cognitive ability tests. of job skill testing.
These tests in combination form the essentials of a psychometric
test, something when used correctly enhances the chances of orga-
nizational success. Having said that, there are several applications to
psychometric tests in an organizational context. We’ll take a look at
the same in segments to come.

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A P P L I C AT I O N O F P S Y C H O M E T R I C T E S T S I N
A N O R G A N I Z AT I O N

RECRUITMENT TRAINING & ORGANIZATIONAL PERFORMANCE

DEVELOPMENT PLANNING EVALUATION

Training Need Training Succession

Identification Effectiveness Planning

Assessments
& Development High Potential
Centres Identification

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2.1 PSYCHOMETRIC TESTS IN RECRUITMENT

Most Effective Hiring Selection Practices
For anyone who’s ever been responsible for hiring, you must know
that there’s wide variation in workforce performance across jobs.
This makes it important to understand the differences among Multi-Measure Tests
individuals that systematically affect job performance, ensuring
candidates with the greatest probability for success be hired. Cognitive Ability Tests

The table below covers the predictive validity of some commonly Integrity Tests
used selection practices, sorted from most effective to least
effective according to research shared at the Personnel Testing Reference Checks
Council Metropolitan Washington Chapter in 2014.
E.I Tests
The chart is based on validity coefficients ranging from zero to one.
The higher the number, the higher the correlation between test Personality Tests
scores and predicted job performance.
Job Experience

0 0.2 0.4 0.6 0.8

Correlation Score
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For your reference, multi-measure tests are psychometric tests

- a combination of cognitive ability, personality and interest tests.
In the table from Frank L. Schmidt’s data, research indicates
0.71+ correlation, identifying it as the greatest predictor for job
performance in the hiring scenario. It also cites the insignificance
of relying primarily on interviews, reference checks and personality
tests alone.

In fact, the data solidifies that despite popular belief personality

Frank L. Schmidt’s, research indicates constructs are not the most predictive measures available with a
correlation score of not more than 0.22. They are most effective in
combination with other measures with higher predictive validity such
0.71+ correlation, identifying as cognitive ability or integrity tests.

it as the greatest predictor for Note: In scientific and research theory, and especially within the
field of psychometrics, a construct is an explanatory variable that
job performance in the hiring is not directly observable. An example would lie in the concepts of
motivation or intelligence utilized to explain certain phenomena in
scenario psychology, yet neither is directly observable.

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Here are some inherent benefits to including the same in your Standardized Testing:
organization: It’s a fair form of testing in the simplest of terms. While larger orga-
nizations do tailor tests to their specificity, candidates interacting
Interview Independence: with the test go through exactly the same process and without bias.
Recruitment agendas are most commonly associated with It’s a strong alternative to interviews, which heavily relies on the
filling your vacancies with the right people for the job; by it- interviewer’s frame of mind - often prone to fluctuation.
self, interviews do not measure capability. Psychometric tests
stand to give you a benchmark - a comparative view of results Cultural Fitment:
against other applicants, and also previous hires currently Recruitments aren’t all about hiring strong talent with the demon-
thriving in your organization. strative ability to fit into a job role. Whilst a critical requirement,
it’s ideal to identify if said candidate fits in well with the rest of the
Cost & Time Efficient: team already working with you, or better yet - how well they fit into
Using psychometric tests at the beginning for the application a company’s culture. This benefit has also been known to affect
process eliminates the need to shift through a mountain of ap- employee attrition.
plication forms. In a highly competitive talent market, it’s easier
to work with the filtered best as candidates than finding them
from scratch.

Inherent Traits:
Contrary to popular belief, a strongly constructed psychomet-
ric test is difficult to game. In most cases, the results mirror
the candidates in question. These results are likely an inside
view into how he or she is going to interact with, engage or
improve your workplace. This would include behavioural traits
in addition to the important technical aspect.

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2. 2 P SYCHOMET RIC T E STS IN T R A ININ G &

D E V ELO P MEN T

When it comes to L&D programs, Business Impact and Return on

Investment (ROI) rank as the two most desired measures by CEOs

WHAT sort of training

in an Adecco survey. Yet merely 8% of the organizations surveyed
currently notice business impact by L&D; this drops by another 4%
when it comes to ROI measurement as well.
is required?
The recent advent of assessment technology, however,
seemed to have offset this disadvantage; at least to a certain

WHY is training
degree. But we can maybe look more closely at how psycho-
metric tests improve learning, training and development pro-
grams in organizations.was brought to fruition using:
needed?
Training Need Identification:
When working through a training, identification of the need

WHO precisely
ranks fairly high in importance. A prime focus on each kind of
training - albeit task based, industry based or job based - is
necessary to determine the best course of action for the en-
terprise. needs the training?
But while much of what’s been described covers the aspect
on how training can most effectively be delivered, a better
analysis would require an organization to answer the following
questions also:

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To answer the first question, Training Need Identification ranks It builds towards the improvement of different aspects of the orga-
among those strategic initiatives taken to delve deeper into the ways nization, build specific training programs to address important gaps,
of enriching competencies, workforce potential, and capabilities. and boost the effectiveness of the company overall.
In fact, with the successful deployment of the analysis, the organi-
zation would be in its most primed position to evaluate better out- Here is an E book to know
comes considering the best utilization of its resources. more on training needs
assessment.
Through the training need analysis, you also gain insight into how
relevant training is for the employees. The important question to
consider here is if trained, would they actually improve in terms of
job performance? And if the improved job performance has anything Training Effectiveness:
to do with an organization’s business outcome or goals. The advent of test technology propelled the understanding of L&D
efficacy without leaning in on real-world observation. This has,
On the other hand, it also allows for a detailed foray into the areas in fact, stretched to better budgeting and greater improvement
in which employees fall behind - knowledge, attitude or skills. This in the concept of training and development also. The inclusion of
understanding also works toward empowering employees by provid- psychometric tests to analyse behavioral competencies, inspired
ing them with a platform to acquire new skills at a faster pace, and from its use in assessment centers, served to augment the process.
thereby enjoy work.
Here is the process to understand the training life cycle.
With proper analysis and implementation, an organization can steadily
steer employees into remaining happy and highly productive.

It’s this stage - the training need analysis - that scrutinizes the gap
in performance against theory to its current form.
Pre-Assessment Training Post Assessment

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Pre-Assessment Post-Assessment
An evaluation, in the first place, is taken which gives a After the training, comes the part to gauge its adequacy.
report of proficiency of each participant over the critical Luckily, there exists some demonstrated methodologies
competencies- specific set of competencies required to be for measuring training effectiveness. Using Kirkpatrick
effective at the workplace crosswise over various job roles. Model, with a basic 4-level approach, one can effectively
These reports are fundamental for we can’t move onwards gauge the viability.
until the point that the right match between candidate to
be trained and competency to be worked upon has been Through the Kirkpatrick Model, assessment technology
discovered. is introduced via a set of customized diagnostic and
Then comes the training part which could shape into various summative assessments. This covers employee proficiency
forms. It could be classroom or educator driven or could right before and 3 months post training, and is most easily
incorporate intelligent techniques (tests, case studies, identified with the learning part of the Kirkpatrick Model.
group discussions, etc.)
Behavioral changes are better measured via use of a
Training 360 feedback loop, an assessment that accounts for an
Once the 3-W’s and employee proficiency in critical individual’s change in behavior based on manager, peer
competencies have been found out, the next step is the and subordinate experience.
training part. Now training can be done by various ways.
It could be classroom or instructor-led training or could
include interactive methods such as quizzes, case studies, Know more about How to Measure
group discussions or some Q & A sessions. This could also Training Effectiveness
include online trainings such as video-conferencing, audio-
conferencing, webinars or distance learning programs.

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01 REACTION 02 LEARNING
This level measures This measures the
a trainee’s reaction learnings of trainees.
to the training in An indicative measure
the form of topics, is increased knowledge
material, instructors or as a result of the
presentations. training.

03 BEHAVIOUR 04 RESULTS
The third level measures The analysis of final
behavioral changes in the results from training-
trainee based on training outcomes an organization
received, basically may have deemed good
in the application of for business, employees
information. and the bottom line.

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2 . 3 P S Y C H O M E T R I C T E S T S I N O R G A N I Z AT I O N A L
PLANNING

As of 2017-18, every decision is often put under the microscope from

a business perspective. These decisions require justification, backed
and informed by data. When it comes to organizational planning, a lot
of weight is given to employees at different stages of their employee
lifecycle.

Here are some of the use cases.

Succession High Potential

Planning Identification

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Succession Planning Levels Beyond training

Succession Planning is determined by the identification of Contrary to popular belief, succession planning isn’t about training
vacancies that an organization may expect through either alone. And while it is part of the process necessary to provide poten-
attrition or retirement. It is the strategic consideration of tial employees with the skills, abilities or knowledge to bridge voids
how, where and when internal candidates may be primed left by future vacancies, it also aids with the initial assessment of
to fill said vacancies. potential vulnerabilities that may impact performance management.

This would require the assessment of skills and Gaps in Desirable Competencies
requirement from the job of existing employees, seeking An important benefit to consider in succession planning is the utiliza-
to plug the gaps between needs and skills with articulate tion of diagnostic tests to identify where there might be gaps be-
training and development initiatives. Simply put, it tween what an employee currently knows and what he or she needs
identifies future leaders. to know.

When you place psychometric tests into the equation, Here are the most commonly utilized steps for succession planning.
there is evidence to a more effective form of succession
planning. Identification of Critical Positions: These are the focus of
succession planning efforts, and if left vacant would make it
Some of which are highlighted below: difficult for the organization to achieve business goals.

Fiscal Benefits Competencies Required: This speaks to the identification of

Utilizing psychometric tests to identify for behavioral competencies required for success in said position.
traits that are indicative of leadership leads to a positive
impact on performance management, ensuring strategic Incorporation of Strategies: Learning, training and development
positions remain occupied with competent performers. for successful succession planning and management.
This would negate the cost and time behind external
recruitment and training, which are statistically more Evaluation of Effectiveness: This tells about the productiveness of
expensive that promoting from within. the strategies incorporated.

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High Potential (HiPo) Identification person learns, problem-solves, remembers, or pays attention
In the business world today, there is a growing interest rather than actual knowledge.
in high potential (HiPo) identification. An employee’s Learning Ability: These are mental skills with a heavy cognitive
potential determines the upper limit of his or her component, which is also an outcome of motivation. It separates
development range. Suffice to say, the more potential the sound or excellenct learners from the so-so learners.
they have, the cheaper and quicker it is to develop
them.
Social Skills:
In the 21st century, when comparing scientific re- Research reveal that the primary reason for management derailment
search or psychometric use to desirable qualities or is relationship problems. Employees steadied to succeed in more
traits on the predictors of job performance identified a complex environments are able to first manage themselves, and
couple of markers of high potential. These ingredients establish strong cooperative working relationships. Sophisticated
are key to making the psychometric test suited to high political skills are also much desired for senior roles, and much of
potential identification. these functions form core elements of emotional intelligence. While
the traits are revealed via assessment, it could be further refined
Ability: through training & development.
Forecasting potential in a bigger, more complex job
environment shifts focus to how likely an individual is to Drive:
learn and master skill along with requisite knowledge. Standardized tests that are known to measure conscientiousness
Cognitive ability or IQ is the single-best predictor of (a part of the five factor model), ambition and achievement motiva-
the same. Learning ability includes a heavy cognitive tion are often readied as part of tailored psychometric tests. These
component, aided by motivation to pick up new skills in traits are also identified behaviorally with indicators around hard
a flexible and sppedy manner. work, willingness to extra duties, responsibility, and readiness to
sacrifice.
Cognitive Ability: Intelligence Quotient or brain-
based skills required to carry tasks to completion. Connect with an expert
It has more to do with mechanisms of how a

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2 . 4 P S Y C H O M E T R I C T E S T I N P E R F O R M A N C E E VA L U AT I O N

It is important to note that in the matter of performance evaluation, Mid Level Managers: Needed less technical competence, but sig-
job performance is subject to social and organizational influences. nificant skill in areas such as communication, flexibility, risk-taking,
This is indicative of something known as effective job behavior, but leadership and concern with goal achievement.
what constitutes good from poor performance relies entirely on
organizational context. Top Level Manager: Required all the skills of a mid-tier manager
including a long-term view, a strategic view, and sensitivity to the
For example, the armed forces place a ton of importance on environment.
performance metrics such as military bearings. It signified the
appearance and mentality of a serviceman, covering meticulous To maintain the validity of the performance evaluation process, the
attributes such as ironed uniforms, properly worn equipment, manner psychometric tests deployed require a certain amount of flexibility in
of behaviour in and out of formation, and more. accordance with the situation. In other words, if you are considering
these tests, it is only helpful in case of well-established metrics of
In 1980s, the Office of Personnel Management (OPM) was reported job performance. Let us take a look at some of the criteria required
to use the Management Excellence Inventory. The MEI described of this validity:
management functions and the skills required of said functions. It
suggested that at three levels of management, different layers of • Objective and removed of impact by the values of the tester
knowledge and skills are required to reach a measurable level of • Managed in standardized or controlled scenarios
success. • Basic certainty of quantifying and minimizing intrinsic errors
• Predict and evaluate performance of employees accurately
• Provide a status of being non-discriminatory

Of course, this is only established when an organization makes use of

combined psychometric and traditional techniques. But, choosing the
Lower Level Managers: Required technical competence and right test criteria mostly depends on the role or position for which
interpersonal communication skills. the employee or candidate is being assessed.

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2.5 P SYCHOMET RIC T E STS IN EMPLOYEE

ENGAGEMENT 202%
In an organizational context, there is often the case of employee Organizations report that
burnout - a situation of emotional exhaustion, lack of personal
attribution or accomplishment, and depersonalization. Around the engaged employees
early 1980s, psychometric research led to the development of the
Maslach-Burnout Inventory (MBI) designed to measure burnout. outperform their counterparts
Typically restrained to the evaluation of human services, research
later led to the making of the MBI-General Survey (MBI-GS), a newer
version to include all employees and not merely those in industries of
people work. 6%
Relatively little attention has been directed toward concepts Highly engaged employees boost
considered antipodes of burnout; an exception being psychological
presence or to be invested fully. The thought emerged from role a company’s net profit margin
theory and is often defined as an experiential state that channels
energies into cognitive, physical and emotional labors using
personally engaging behaviors.

$450 - $550 BILLION A YEAR

Connect with an expert Employee Disengagement costs

U.S. business

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JAN 2016

In January 2016, Gallup released the results of

its annual employee engagement survey polling
more than 80,000 working adults in the U.S.A. It
accounted for a workforce across industries, of
which Gallup identified merely 32% as engaged
at the workplace.

Interestingly, 17.2% fell into the category of

being actively disengaged and 50.8% into the
classification of absolutely not engaged. It
mirrored the results of 2015, marking little
to no improvement in avenues of employee
engagement. There are some other researches
that compels one to remain firm in the matter.

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C ON CLU SION
Sooner or later, people will realize that the skills, aptitude
and knowledge alone cannot do much in the path of building
a world-class organization. It’s equally important to analyze
employee’s attitude and personality.

Organizations which are serious about attracting and

retaining the best talent should take advantage of such
methodologies rather than rely on subjective selection
methods.

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