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  • Should you Use Psychometric Assessments?

Should you Use Psychometric Assessments?

27 September 2016

By Stefan van Eeden, Senior Manager, HR Advisory Services at BDO South Africa

A question asked by some of our clients at one of our breakfast seminars recently was “should we be using assessments?” Our response was not as simple as you might think. We first asked them why they wanted to use assessments in the first place, the clients response was simply because that’s what you do nowadays.

This highlights that the public don’t always fully understand assessments or their purpose. Not understanding this means that psychometric assessments have received a bad rap as they have been used freely and inconsistently, which meant that people were using them to get a specific outcome that works for them and not potentially the correct result.

However, if psychometric assessments are used in the way they are supposed to be used, it means that you can obtain information about a potential candidate to predict their behaviour, their cognitive ability and personality traits, so as to truly understand if they are correct for a specific role and to plan appropriately for their future development, as well as your company’s.

So to start this article, and answer the question of “should you be using assessments?” companies and their decision makers need to ask themselves, why they want to assess in the first place.

To assist them in answering this question we have listed what we see as the five primary types of assessments:

  1. Ability Assessments – can the employee or candidate do the job right? What is their potential to develop in the organisation as structure decreases and analysis and decision making become more important?
  2. Personality Assessments – understanding how the employee or candidate person behaves - which behaviour traits can pose a risk to the organisation or benefit the organisation. Personality assessments can also focus on derailers, or what behaviour can be expected from an individual under stress that may under normal circumstances be positive, but under severe stress can become a risk to the organisation. Emotional intelligence – a popular concept in businesses – is also assessed under the personality assessment domain.
  3. Integrity Assessments – what is the level of risk involved with bringing on board a new employee? This can be assessed with accuracy through some of the new assessments available.
  4. In-basket assessments – makes use of real life scenarios to see how employees or candidates react or treat them
  5. 360 assessments – to understand the gap between self-perception and how your team and co-workers perceive you in the work environment.

Imagine working in a bank and wanting to hire someone, being able to see whether there is a natural tendency of them toward financially risky behaviour would be a great benefit. That is what an integrity assessment can do for you. Integrity assessments should not be used as the only tool in decision making, as no single tool can or will guarantee that this behaviour will occur. As part of an assessment battery however, they can provide useful and additional information on the candidate that can lead to a more calculated risk decision as well as a better understanding of the people in your business and the risk they bring.

In terms of the law, the Employment Equity Act stipulates that psychometric assessments may not be used if it cannot be proven that this assessment doesn’t discriminate against a person based on gender or race and if it cannot be applied to all people applying for that role. In the same way if it has not been shown to be scientifically valid and reliable it cannot be used. For example, if you use the integrity assessment, it would be unfair to appoint a person based on their integrity assessment score alone. As part of an assessment battery it can be included to have a holistic view of a candidate and their performance over all assessed domains.

So then how to identify when a company needs an assessment:

In order to assist you with an assessment we need to understand at which phase of the company process you would like to use the assessment. In our experience the two main company reasons are for:

This way we can identify if person is a good culture fit, has the ability, and the personality to do the job.

  1. Recruitment – to replace a role or start a new role:

    First step: we would need to have an in-depth discussion to understand the purpose and requirements of the role.

    Step two: Then we need to understand the personality traits and cognitive ability requirements in order to apply the correct assessment for that role.

    Step three: We need to understand the company culture in order to determine which personality will best fit the role.

    Typical questions include:

    • How do they respond to authority, and their involvement in the decision making process?
    • What level of complexity are they expected to work at in the organisation and in their role?
    • Which specific traits are required that can benefit the culture of the organisation?
  2. Succession - for promoting or transferring internally:

    This is arguably the greatest benefit of psychometric assessments to organisations.

    A psychometric assessment cannot be used to ‘get rid’ of an employee, it can however be used in talent management and promotions or transfers to determine if someone can fit into the new role. The key to successful decisions and assessments are an increased understanding of the person’s ability and personality profile. This way we can ensure that an employee is in the role that they are most naturally comfortable in and adapted for.

    By doing psychometric assessments we can predict from the outset what the next level in the employee’s career path can be, so that in two years when you want to promote this employee, at least you are aware of their strengths and abilities and it doesn’t waste your time or lead to a replacement cost.

Other popular uses of assessments can include employee engagement, staff development, 360 assessments or gap analysis, and competency mapping and alignment.

How will assessments benefit you, why go through all this effort?

If we look at replacement costs of an employee on management level (Junior, senior management up to Associate Director level), it can easily add up to 6 – 18 months’ salary. This cost can include potential recruitment fees, training and development, induction and equipment, but doesn’t even consider the loss of working hours as they are not yet ready from day 1.

The assessments can be done at a fraction of this cost, typically less than one months’ salary, and will ensure that the person is the right fit for the role based on the above mentioned assessed attributes.

This means:

  • Better decision making for the specific role.
  • Less recruitment as the right people are selected from the beginning.
  • Greater Return on Investment (ROI) for psychometric assessments through a decrease in staff turnover and recruitment costs.

Move toward Assessments in SA:

South African organisations are becoming more aware that if you appoint the right people the first time and get information that you need in terms of future planning, you don’t have to replace continually. This also assists you in future decision making as you already have the right succession candidates in the business, and don’t have to keep replacing key staff members.

For example, if we look at the breakdown of an organisation –

It is easy to bring replacements at a low level for continuity, but helps to understand who can replace senior executives in time so that you can start priming them as possible future leaders and the future of your business – which means you don’t have to bring in people who don’t contribute to the growth of the business or have no understanding and history in the organisation and the culture. Remember, knowledge and understanding of the business is equally important to possessing the right skills and knowledge.

Who should know about psychometric assessments?

Every level should be aware of assessments so that the business gets the best value. We have found that when a line manager gets involved, they make more informed decisions for their team and they become more comfortable with the usage of such assessments.

So if we sit with the Head of Tax, we find out what elements are important to this role, those being; integrity, decision making and report development, then we can create a customised assessment to get the correct person in the role for that team. The line manager then also trusts the assessment as part of the process and doesn’t hinder the decision making. We will remain agnostic toward assessments so that we can tell you what is best for your organisation to use – irrespective of assessment house and affiliation.

The selection of assessments between us and/or the line manager is the most important part of the process. This helps us understand the role and apply the correct assessment to the correct person/role. This is important because it must be a specific assessment to that role or risk to be a waste of time and money and can lead, in some instances, to staff members taking you to the CCMA due to unfair and inconsistent processes.

But we haven’t used assessments before?

Any person considering assessments can start using them now, even if they are not part of the current organisational process. They can also be implemented at any level of work if you feel you need it. You don’t have to wait for your HR to suggest and roll it out to the whole organisation.

What if a staff member wants to move to a new role, but assessments weren’t used previously in promotions?

It is unlawful to use an assessment to understand how someone is doing in their current role. We recommend it to be used in promotion decisions. In order to become a director, you have to do a set of assessments, which will be different to the set of assessments used to be appointed as a banking teller. If assessment batteries are implemented in an organisation, it will mean that all people considered for similar roles are being evaluated through the same set of assessments, thus enabling the employer to compare all candidates in the same role through the same psychometric data.

In essence, an organisation with good assessment practices won’t over assess a candidate, or re-assess the same competencies, but rather work in aligning assessments across the organisation for various roles and divisions to create consistency and comparability.

Not everyone can administer assessments:

When doing a psychometric assessment in South Africa, make sure that the person conducting it is a registered psychometrist or psychologist with the HPSCA.

Some assessment houses also offer specific training on specific uses of certain assessments if your psychologist or psychometrist want to become accredited. A registered psychometrist will have to attend such training in order to include the assessment in their proposed set of tools.

BDO HR Advisory Services has two psychometrists on staff.

Examples where we have helped before:

The two most common scenarios that lead us to get involved in assessments:

  1. Bulk recruitment – masses of people come in to apply for one position. You must have a scientific reason to explain why you regretted or accepted someone.

    Our process will roll out as follows:

    • Break the role down into ability and personality (and other traits) that will be needed for that role – so that you know what you are looking for.
    • First Assessment: can you handle numbers (or other ability identified)?
    • Second Assessment (if relevant to role): consider the personality assessment to identify traits that can be either beneficial or risky to the organisation should the candidate be appointed.
    • After these assessments you will have narrowed the candidates down to only a few that will go through to the final selection and interview phase.
    • Final interview phase – from the final list of candidates that were already successful in the assessments, you can select the best fit for your business.
  2. Senior executive role (EXCO) – at this level, most people’s reputation precedes them so most times you already know their reputation and their personality. What do we want to assess then? Usually at that level we do cognitive ability assessments and use very specific tools to better understand specific behaviour, for instance when under severe pressure.

    Cognitive assessment: how strategic are you? How comfortable are you with an unstructured work environment? (at senior level that happens and you must be able to handle ‘flux’). An in-depth analysis of such a candidate’s ability, their natural reasoning styles, general intelligence and comfort in dealing in a more strategic working environment are all being considered in this aspect.

    Personality assessment: what behaviour are usually displayed and considered a strength by the individual? This behaviour can – however – under severe pressure and stress become a risk to the business. For instance, you would expect senior executives to be comfortable in taking business risks, but when there is pressure from the board and financial constraints, you don’t want an Exco member to continue taking uncalculated risks just for the sake of potential opportunities.

Should you wish to find out more about assessments or if you would like us to assist your business, please feel free to contact Stefan van Eeden at [email protected]

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