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

    A study conducted by RadioShack found that the use of staffing-assessment tools for hourly workers was associated with an increase in revenue of about $10 per 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 losses associated with poor hiring decisions. Brian Fuller, formerly a director of security administration for Macy's Department Stores and currently a vice president at Aon Consulting’s Retail Practices, tells the following story:

    "Macy's Department Stores screens out approximately 5 percent of potential hires through background checks. These background checks often indicate that a candidate has previously stolen from another Macy's or Federated department store. In one instance, an employee at Macy's was incorrectly hired because the background check was not conducted appropriately. This single hire resulted in more than $1 million worth of lost revenue due to theft and subsequent legal and security fees. The employee would never have been hired if the background check had been conducted."

Internet is making life easier
    Given the impact of hiring decisions on the bottom line, it is surprising how little effort many organizations put into improving the effectiveness of their employee-selection process. However, an increasing number of organizations have discovered the value of using staffing-assessment tools specifically designed to provide hiring managers and recruiters with a more complete picture of a candidate’s ability to perform a job. The development of Internet-based hiring systems means that most of these tools are now more accessible and affordable than ever.

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

• "Luxottica Retail Group integrated drug screening and a 30-minute work-style assessment into the hiring process for its LensCrafters stores. The implementation was associated with a 50 percent decrease in turnover among hourly 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 hiring process for sales associates and saw a substantial drop in average turnover of new hires and a major increase in average new-hire sales per hour. These changes translate 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. For example, Sherwin-Williams estimates that its use of automated assessment tools reduced the number of employment interviews conducted each year by more than 5,000.

It’s all about which tools
    Any organization that hires people can benefit from staffing-assessment tools. However, getting results such as those achieved by RadioShack, Neiman Marcus, and LensCrafters requires not only using staffing-assessment tools but also 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 for the job in question.

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

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

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

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

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

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

    Knowledge and Skills Tests -- These assess knowledge and skills in specific subject areas such as computer programming or accounting laws. They are fairly complex to design, particularly in terms of establishing appropriate questions and scoring guidelines.

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

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

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

    Integrity Tests -- These are written tests that predict whether an applicant will engage in theft or other counterproductive activities. They have proved to be effective in helping to avoid costly hiring mistakes, especially in jobs where theft or shrinkage has traditionally been a problem. Integrity tests can be a less expensive alternative to background investigations, but they are not as reliable at detecting past criminal behavior.

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

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

How staffing-assessment tools work
    All staffing-assessment tools are designed to predict job performance through measuring 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 things and how this affects their ability to predict different types of job performance. From a design perspective, assessment tools can be broken into three general categories:

• Drug Screens, Background Checks, Integrity Tests, and Physical-Abilities Tests measure very specific things about candidates' history or personal characteristics. As a result, their effectiveness is limited primarily to jobs in which theft, drug use, and the ability to perform physical functions are significant employee-performance issues.

• Qualifications Screens and Knowledge Tests are good for measuring highly objective or "visible" things related to experience and motives such as education or salary expectations. It is relatively easy to build a 15-minute qualifications screen to "screen out" candidates who lack the minimum requirements for a job. However, qualifications screens are not effective for identifying less visible characteristics related to things such as problem-solving, honesty, leadership, or customer service. These measures are also relatively easy for candidates to fake.

• Talent Measures, Culture Fit and Values Inventories, Job Simulations, and Structured Interviews can effectively measure less visible candidate characteristics that influence job performance such as interpersonal style, motivation, and analytical skills. These assessment tools are good for "selecting in" 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 at least 30 minutes or more to complete. In addition, their complexity makes them susceptible to poor design and misuse. These tools should not be used unless a company is willing to spend the time and resources to ensure that they are used correctly.

    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 best predictors of job performance. Structured interviews and job simulations are also effective but require more time and resources from recruiters and/or hiring managers.

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

• Increasing Staffing Efficiency -- Qualifications screens tend to provide the highest level of return in terms of efficiently processing candidates. This is particularly true when they are integrated with a candidate-management or applicant-tracking system. Web-based talent measures can also be effective for rapidly 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 who are likely to engage in counterproductive behavior such as theft, drug use, or workplace aggression.

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

Things to consider when choosing assessment tools:

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

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

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

    The most effective selection systems tend to use multiple assessment tools in a linear fashion, with the most inexpensive and least time-consuming being used first. 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 the assessments in the previous steps.

    It’s critical to carefully think through all the different types of assessment tools you will use and how they will be deployed. This includes thinking about tools that may be implemented at a future date, what technology will 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 of certain tools such as background checks and drug screens.

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

    The Internet is rapidly becoming the preferred method for delivering staffing assessments. All the major providers of talent measures, culture fit and values inventories, background checks, qualifications screens, integrity tests, and knowledge and skills tests offer Internet versions of their tools. The Internet provides wide access to candidates, and allows companies to automatically assess applicants remotely. In addition, the assessment results can be monitored from a central location and can be linked to other electronic systems such as an HRMS and an ATS. However, Internet-based testing can present security issues, and some candidates may not have reliable Internet access. For this reason, some online testing vendors also provide phone and paper-and-pencil versions of their assessments.

    Structured interviews and job simulations are typically delivered via phone or face-to-face, although some Web-based versions of these tools are available. However, there are disadvantages to completely automating the assessment process from both a recruitment and a selection perspective. Research shows that candidates are more open to completing computer-based assessments than is often thought. However, some level of human interaction is clearly an important part of the hiring process. In addition, some characteristics such as communication style 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 a combination of Web-based and face-to-face or phone assessments.

    Given the growing number of assessment vendors on the market, there are probably tools available that relate closely to your specific job needs. In addition, designing effective assessment tools is a complex process and should not be done unless you have people on staff with in-depth expertise in this area. Therefore, it probably does not make sense to build your own assessment tools unless you are staffing a very high volume of jobs or highly specialized jobs, 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. It is important to consider how candidates will react to different assessment tools. Candidates should be able to see a link between the contents of an assessment and the requirements of the job they are applying for. Assessments should not leave candidates wondering, "Why are they asking me this?"

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

    The legal defensibility of staffing-assessment tools is a complex issue that is beyond the scope of this article. In general, a staffing assessment will be considered legal if it is job related, predicts job performance, and is consistently administered to candidates. More "invasive" assessments such as background checks, drug screens, and physical-abilities tests can have additional legal requirements that differ from state to state. The complexity of legal compliance makes it important to consult an expert before using any staffing assessment.

Choosing an assessment vendor
    Like most other powerful tools, staffing assessments can do substantial damage if they are poorly designed or implemented. Improper use of assessment tools can lead to lost time, lost revenue, and even legal action. Most assessment vendors are committed to providing the best-quality tools possible and evaluate their tools using standards that are as high as or higher than those of their clients. However, there are exceptions. For this reason, we encourage companies to express a healthy degree of skepticism when reviewing assessment vendors.

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

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

    Largely thanks to recent increases in technology, these staffing-assessment tools are now more accessible and inexpensive than ever before. Companies that embrace these tools have a clear competitive advantage over organizations that rely on less effective and inefficient traditional hiring practices. They also tend to have much happier, more productive employees, which translates into happier hiring managers and recruiters.

Workforce Online, December 2002 -- Register Now!