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Assessment Tools

Learn about the tools that are utilized to screen applicants, why they’re used, and how they work to make the process more successful.

November 28, 2002
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Related Topics: Recruitment, Staffing Management
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Hiring good people is part work, part art, and part luck.

    As HR professionals know, staffing-assessment tools are designed to helpcompanies make successful hiring decisions that foster worker productivity andpromote company profits. Using several measurement criteria, such devices canhelp determine how well a person will perform a job. The keys are to make sureyou decide on your goals, and to be certain your tools are effective.

    A study conducted by RadioShack found that the use of staffing-assessmenttools for hourly workers was associated with an increase in revenue of about $10per hour per employee. Given a workforce of more than 1,000 hourly associates,this translates into an annual revenue increase of $10 million.

    By using well-designed hiring tools, organizations avoid catastrophic lossesassociated with poor hiring decisions. Brian Fuller, formerly a director ofsecurity administration for Macy's Department Stores and currently a vicepresident at Aon Consulting’s Retail Practices, tells the following story:

    "Macy's Department Stores screens out approximately 5 percent of potentialhires through background checks. These background checks often indicate that acandidate has previously stolen from another Macy's or Federated departmentstore. In one instance, an employee at Macy's was incorrectly hired because thebackground check was not conducted appropriately. This single hire resulted inmore than $1 million worth of lost revenue due to theft and subsequent legal andsecurity fees. The employee would never have been hired if the background checkhad been conducted."

Internet is making life easier
    Given the impact of hiring decisions on the bottom line, it is surprising howlittle effort many organizations put into improving the effectiveness of theiremployee-selection process. However, an increasing number of organizations havediscovered the value of using staffing-assessment tools specifically designed toprovide hiring managers and recruiters with a more complete picture of acandidate’s ability to perform a job. The development of Internet-based hiringsystems means that most of these tools are now more accessible and affordablethan ever.

    Staffing assessments are tools that range from simple pre-screening questionsasking about salary expectations and work eligibility to complex "talentmeasures" that assess candidates’ underlying motives, traits, and skills.Well-designed staffing-assessment tools predict job success with much greateraccuracy than traditional employee-selection practices such as résumé reviewsand unstructured interviews. This increased accuracy can have a monumentalimpact on organizational performance and can provide big savings as a result.The following are examples from organizations that are currently usingstaffing-assessment tools:

  • "Luxottica Retail Group integrated drug screening and a 30-minutework-style assessment into the hiring process for its LensCrafters stores. Theimplementation was associated with a 50 percent decrease in turnover amonghourly associates. A similar system is currently being piloted at Sunglass Hut."--Mike Vacchiano, senior manager -- recruiting, Luxottica

  • "Neiman Marcus integrated Web-based assessment tools into its hiringprocess for sales associates and saw a substantial drop in average turnover ofnew hires and a major increase in average new-hire sales per hour. These changestranslate into several million dollars in annual revenue gains." --Lee M.Roever, vice president -- human resources, Neiman Marcus

    Because staffing-assessment tools can often be administered automatically,they can also greatly increase the efficiency of the hiring process. Forexample, Sherwin-Williams estimates that its use of automated assessment toolsreduced the number of employment interviews conducted each year by more than5,000.

It’s all about which tools
    Any organization that hires people can benefit from staffing-assessmenttools. However, getting results such as those achieved by RadioShack, NeimanMarcus, and LensCrafters requires not only using staffing-assessment tools butalso using the right tools in the right way. To be effective,staffing-assessment tools must meet three key conditions:

  1. They must be chosen on the basis of a clear definition of performance forthe job in question.

  2. They must effectively measure the key candidate characteristics thatinfluence job performance.

  3. They must be deployed in a standardized, consistent fashion that ensuresthat all candidates are assessed in the same way.

    The following is a list of the most common types of staffing-assessmenttools:

    Qualifications Screens -- These questionnaires determine if candidatespossess specific characteristics needed to perform a job. They are best for "screeningout" candidates who do not meet minimum requirements such as relevantexperience, schedule availability, educational degrees, or citizenship.

    Structured Interviews -- In these interviews, hiring managers, recruiters, ortrained assessors systematically evaluate candidates on the basis of theirresponses to pre-defined questions built around key job competencies. Structuredinterviews can be conducted face-to-face, by phone, or over the Web.

    Job Simulations -- These evaluate how candidates respond to situationssimulating actual job tasks. Job simulations can be conducted using "paper andpencil" exercises, trained role-players, or computers. In addition to beingeffective for assessing candidate competencies, job simulations providecandidates with a realistic preview of key job roles. Their main drawbacks arethat they are relatively labor intensive to create, and non-automatedsimulations require extensive training if they are to be used effectively.

    Knowledge and Skills Tests -- These assess knowledge and skills in specificsubject areas such as computer programming or accounting laws. They are fairlycomplex to design, particularly in terms of establishing appropriate questionsand scoring guidelines.

    Talent Measures -- These measure "natural" personal characteristics thatare associated with success in certain jobs. Some of the things assessed throughtalent measures are problem-solving ability, work ethic, leadershipcharacteristics, and interpersonal style. On a broad level, talent measures tendto predict two kinds of performance: what a person can do (e.g., the ability toquickly learn new tasks or stay calm in stressful situations) and what a person will do (e.g., attendance, work ethic). Talent measures, when appropriatelymatched to the job, are the best predictors of superior job performance. Theyare also the most difficult to develop, because they require "looking belowthe surface" at underlying skills, abilities, and work styles.

    Culture Fit and Values Inventories -- These help to determine how well anapplicant will fit into a particular work environment. They are similar in manyways to talent measures, but focus on predicting tenure and organizationalcommitment as opposed to superior job performance.

    Background Investigations -- These gather information about a candidate fromsources other than the candidate him/herself. This includes employmentverification, criminal-record checks, and reference interviews. Backgroundinvestigations are most useful for avoiding potentially catastrophic hires.

    Integrity Tests -- These are written tests that predict whether an applicantwill engage in theft or other counterproductive activities. They have proved tobe effective in helping to avoid costly hiring mistakes, especially in jobswhere theft or shrinkage has traditionally been a problem. Integrity tests canbe a less expensive alternative to background investigations, but they are notas reliable at detecting past criminal behavior.

    Drug Screens -- These are tests designed to assess past drug use by analyzinga physical specimen from the candidate (e.g., hair, urine). Drug screens can befairly expensive and tend to uncover significant information for a relativelysmall proportion of candidates. However, the information provided by drugscreens might be critical for the legal and safety requirements associated withsome jobs.

    Physical-Abilities Tests -- These involve having candidates complete physicalexercises to assess talents and capabilities such as strength, endurance,dexterity, and vision. They tend to be used only for very physically demandingjobs such as firefighting.

How staffing-assessment tools work
    All staffing-assessment tools are designed to predict job performance throughmeasuring some combination of three basic things about candidates: Experience:what have they done? Motives: what do they want to do? Talents and abilities:what can they do?

    The main difference between assessments lies in how they measure these thingsand how this affects their ability to predict different types of jobperformance. From a design perspective, assessment tools can be broken intothree general categories:

  • Drug Screens, Background Checks, Integrity Tests, and Physical-AbilitiesTests measure very specific things about candidates' history or personalcharacteristics. As a result, their effectiveness is limited primarily to jobsin which theft, drug use, and the ability to perform physical functions aresignificant employee-performance issues.

  • Qualifications Screens and Knowledge Tests are good for measuring highlyobjective or "visible" things related to experience and motives such aseducation or salary expectations. It is relatively easy to build a 15-minutequalifications screen to "screen out" candidates who lack the minimumrequirements for a job. However, qualifications screens are not effective foridentifying less visible characteristics related to things such asproblem-solving, honesty, leadership, or customer service. These measures arealso relatively easy for candidates to fake.

  • Talent Measures, Culture Fit and Values Inventories, Job Simulations, andStructured Interviews can effectively measure less visible candidatecharacteristics that influence job performance such as interpersonal style,motivation, and analytical skills. These assessment tools are good for "selectingin" candidates who not only can do the job, but also are likely to do it well.These tools are also among the most difficult to build and tend to require atleast 30 minutes or more to complete. In addition, their complexity makes themsusceptible to poor design and misuse. These tools should not be used unless acompany is willing to spend the time and resources to ensure that they are usedcorrectly.

    The needs and goals of an organization determine which assessments to use:

  • Increasing Job Performance -- If they are appropriately matched to the job,talent measures designed to assess work style and ability are usually the bestpredictors of job performance. Structured interviews and job simulations arealso effective but require more time and resources from recruiters and/or hiringmanagers.

  • Increasing Tenure -- Culture fit and values inventories tend to be the mosteffective for predicting tenure. Well-designed qualifications screens can alsopredict tenure, particularly for less complex entry-level jobs.

  • Increasing Staffing Efficiency -- Qualifications screens tend to provide thehighest level of return in terms of efficiently processing candidates. This isparticularly true when they are integrated with a candidate-management orapplicant-tracking system. Web-based talent measures can also be effective forrapidly evaluating candidates but tend to have higher "per use" fees.

  • Decreasing Counterproductive Behavior -- Integrity tests, background checks,and drug screens tend to be the most effective for screening out candidates whoare likely to engage in counterproductive behavior such as theft, drug use, orworkplace aggression.

    In general, using several different staffing-assessment tools will lead tobetter hiring decisions than relying solely on one or two types of tools.However, using a number of assessment tools increases the time and expenseinvolved in evaluating candidates.

Things to consider when choosing assessment tools:

  • Are the tools adequately screening candidates on the full range ofperformance issues that affect job success (e.g., tenure, interpersonalbehavior, problem-solving ability, counterproductive behavior)?

  • How many tools can we afford? Can we use less expensive tools to screen outcandidates early in the process, and use more expensive tools only to assesshigh-potential candidates?

  • How will we administer the tools? Can we use automated tools early in theprocess to reduce the time spent by hiring managers and recruiters to assesscandidates (e.g., interviewing only candidates who have already passed aqualifications screen or talent measure)?

    The most effective selection systems tend to use multiple assessment tools ina linear fashion, with the most inexpensive and least time-consuming being usedfirst. A typical process might consist of the following steps:

  1. Automated or Web-based Qualifications Screen

  2. Automated Talent Assessment, Culture Fit Measure, and/or Integrity Test

  3. On-site Structured Interview and/or Job Simulation

  4. Hiring offer contingent on results of Background Check, Drug Screen,and/or Physical-Abilities test.

    Candidates move to a later step in this process only after they pass theassessments in the previous steps.

    It’s critical to carefully think through all the different types ofassessment tools you will use and how they will be deployed. This includesthinking about tools that may be implemented at a future date, what technologywill be used to administer tools, and how the assessment data will be tracked.It is also important to consider legal constraints that may affect the use ofcertain tools such as background checks and drug screens.

    There are a variety of ways to deliver assessments to applicants, includingpaper and pencil, Internet, phone, or person to person (interviews).

    The Internet is rapidly becoming the preferred method for delivering staffingassessments. All the major providers of talent measures, culture fit and valuesinventories, background checks, qualifications screens, integrity tests, andknowledge and skills tests offer Internet versions of their tools. The Internetprovides wide access to candidates, and allows companies to automatically assessapplicants remotely. In addition, the assessment results can be monitored from acentral location and can be linked to other electronic systems such as an HRMSand an ATS. However, Internet-based testing can present security issues, andsome candidates may not have reliable Internet access. For this reason, someonline testing vendors also provide phone and paper-and-pencil versions of theirassessments.

    Structured interviews and job simulations are typically delivered via phoneor face-to-face, although some Web-based versions of these tools are available.However, there are disadvantages to completely automating the assessment processfrom both a recruitment and a selection perspective. Research shows thatcandidates are more open to completing computer-based assessments than is oftenthought. However, some level of human interaction is clearly an important partof the hiring process. In addition, some characteristics such as communicationstyle and job fit may be more easily assessed by talking directly to candidates.In light of this, it is best to design an assessment process that uses acombination of Web-based and face-to-face or phone assessments.

    Given the growing number of assessment vendors on the market, there areprobably tools available that relate closely to your specific job needs. Inaddition, designing effective assessment tools is a complex process and shouldnot be done unless you have people on staff with in-depth expertise in thisarea. Therefore, it probably does not make sense to build your own assessmenttools unless you are staffing a very high volume of jobs or highly specializedjobs, and even then it may not be worth the effort involved.

Candidates' reaction to staffing assessments
    Staffing-assessment tools should ideally serve to both recruit and select. Itis important to consider how candidates will react to different assessmenttools. Candidates should be able to see a link between the contents of anassessment and the requirements of the job they are applying for. Assessmentsshould not leave candidates wondering, "Why are they asking me this?"

    Research also suggests that qualified candidates prefer well-structuredassessments to more informal hiring practices. Assessments that are perceived tobe intrusive, inappropriate, or inconsistently used can substantially damage acompany’s reputation among both candidates and newly hired employees.Candidates who feel they were treated unfairly are also more likely to bringlegal action.

    The legal defensibility of staffing-assessment tools is a complex issue thatis beyond the scope of this article. In general, a staffing assessment will beconsidered legal if it is job related, predicts job performance, and isconsistently administered to candidates. More "invasive" assessments such asbackground checks, drug screens, and physical-abilities tests can haveadditional legal requirements that differ from state to state. The complexity oflegal compliance makes it important to consult an expert before using anystaffing assessment.

Choosing an assessment vendor
    Like most other powerful tools, staffing assessments can do substantialdamage if they are poorly designed or implemented. Improper use of assessmenttools can lead to lost time, lost revenue, and even legal action. Mostassessment vendors are committed to providing the best-quality tools possibleand evaluate their tools using standards that are as high as or higher thanthose of their clients. However, there are exceptions. For this reason, weencourage companies to express a healthy degree of skepticism when reviewingassessment vendors.

    In addition, the tools, technology, services, and pricing models of vendorsare "all over the map," so it makes sense to spend some time shopping aroundbefore choosing a vendor.

A happier workforce
    Staffing-assessment tools use systematic, often highly sophisticated methodsto match people to jobs that suit their unique skills, talents, and interests.The benefits of these tools have been demonstrated through literally thousandsof public and private research studies.

    Largely thanks to recent increases in technology, these staffing-assessmenttools are now more accessible and inexpensive than ever before. Companies thatembrace these tools have a clear competitive advantage over organizations thatrely on less effective and inefficient traditional hiring practices. They alsotend to have much happier, more productive employees, which translates intohappier hiring managers and recruiters.

Workforce Online, December 2002 -- Register Now!

Recent Articles by Dr. Charles Handler and Dr. Steven Hunt

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