Why Use Assessments?

Almost daily, business owners, executives and managers are challenged by frustrating employee-related issues. These challenges cost the company time, money, resources, lost opportunities, reduced productivity and more.

With human capital (employees) costing most businesses 50-60% of their operating budget, it’s important to maximize the return on that investment. The U.S. Department of Labor says, “The appropriate use of professionally developed assessment tools enables businesses to make more effective employee-related decisions.” Assessments are designed to help businesses select the right person for the job, retain them and develop their skills.

Various methods of “testing” have been used for several generations. Initially designed for military and medical (psychological) uses, many assessments today are specifically designed for business purposes. Web-based systems make it easy and inexpensive to administer and manage the assessment process. Reports are available almost immediately.

Companies use assessments to avoid costly hiring mistakes, hire top performers and put the right person in the right job. Pre-employment assessments have become increasingly important when you consider the following:

• Two of three new hires will disappoint in the first year;
• Two of three employees would rather work somewhere else;
• Ninety-five out of a 100 applicants will “exaggerate” to get a job;
• One in three businesses will be sued this year over an employment issue;
• Most hiring decisions are made in haste – during the first five minutes of an interview; and
• Turnover costs thousands of dollars for every employee.

Traditional hiring methods have proven ineffective. Resumes often contain false or misleading information. Business references are of little value because past employers typically tell only the position held and dates of employment. Even interviewing has shown only a small correlation between delivering a good interview and delivering on the job.

Take a moment and ask yourself these quick questions.

1.    Would you like to know in advance if the candidate is going to have the work ethic and reliability you need?

2.    Would you like to know if the candidate is going to be a good fit for the job and the company?

3.    Would you like to hire more top performers?

If your answer is yes to any of these questions, assessments may be the solution.

Assessments can provide invaluable information about an applicant to help predict the likelihood of success and offer development and coaching opportunities for existing employees. As such, ever more companies are using assessments to help select and then coach, manage and motivate their employees. Understanding each employee’s strengths and weaknesses allows for individual coaching and development opportunities to help employees reach their potential. Assessments are even being used to enhance and support special human resource initiatives such as leadership development, team building and succession planning.

Assessment tools are available for pre-employment uses to uncover direct admissions and attitudes toward integrity, work ethic, reliability and substance abuse. Assessments can also provide behavioral information to determine “job fit” for virtually any position. Specific assessments have been created for customer service and sales.

There are many methods used to estimate the potential return on investment. When one considers the cost of turnover, unproductive and troublesome employees, poor customer service or under-performing sales persons, the return on investment of pre-employment testing is astonishing.

But of course, all assessments are not good assessments. The U.S. Department of Labor published a report supporting the use of assessments … assuming they meet or exceed 13 standards. Those standards are listed in the accompanying table. Unfortunately, most assessments fall short of these principles. Many also lack the reliability and validation studies to ensure good results. It’s important to educate yourself when you develop an assessment initiative so that measurable improvements in your workforce will be achieved.  

Checklist for Choosing an Assessment

• Designed specifically for use in staff selection and coaching.
• High reliability and validity scores.
• Normative (normed against a population).
• Measures cognitive, conative and personality.
• Provides job-match “models” that are tailored to a specific company and job.
• Does not require technical interpretation, with reports that are clear and easily understood.
• Contains built in checks to spot “distortion” and faking.
• Provides the minimum return on investment required for other significant company investments.
• Has current validation (not more than 5 years old) and supportive technical manual.
• Data from each assessment has multiple uses, e.g., staff selection, career coaching and development, succession planning, team engineering, team building, management coaching and training needs analysis.
• Complies with EEOC, ADA and other appropriate state and federal requirements.
• Easy to administer, preferably internet accessible, with paper administration as a backup.
• Does not require certification, fees or extensive training to implement.
• User company can query, control and secure the assessment information data base.
• Takes less than 90 minutes to complete.

The U.S. Dept of Labor’s 13 Principles for Using Assessments

1.  Use assessment tools in a purposeful manner.

2.  Use the “whole-person” approach to assessment.

3.  Use only assessment instruments that are unbiased and fair to all groups.

4.  Use only reliable assessment instruments and procedures.

5.  Use only assessment procedures and instruments that have been demonstrated to be valid for the specific purpose for which they are being used.

6.  Use assessment tools that are appropriate for the target population.

7.  Use assessment instruments for which understandable and comprehensive documentation is available.

8.  Ensure that administrative staff are properly trained.

9.  Ensure that testing conditions are suitable for all test takers.

10. Provide reasonable accommodation in the assessment process for people with disabilities.

11. Maintain security of assessment instruments.

12. Maintain confidentiality of assessment results.

13. Ensure that scores are interpreted properly.

Jim Robinson contributed his expertise to this article. He is President of Workforce Solutions, LLC. He can be reached at jim@wfsinfo.com, www.wfsinfo.com, or by phone at (918) 298-0703.