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Growth Strategies

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Psychological testing doesn't have to lead to padded walls and straitjackets-it could lead to smarter hiring decisions.
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" It was a $50,000 mistake," says David Sanso, CEO of Lakewood, Colorado-based medical equipment engineering firm Carsan Engineering Inc. The company was expanding quickly, and Sanso needed a high-level manager to handle the $5 million firm's "fast forward" direction. He interviewed someone who came on good recommendation and looked good on paper. Sanso had a few gut-level reservations based on the interview, but he went ahead with the hire.

But it was soon clear things weren't working out. Sanso, 42, was a high- energy entrepreneur who interacted constantly with his 26 employees; his new manager had a corporate mentality and preferred to sit aloof in his office. It was a hiring decision gone wrong on many levels. Sanso had to let the manager go, he says, because "one person can set the tone for the whole place."

Hiring is like playing with fire-just ask any entrepreneur who's been burned. While the potential salesperson you're considering may look good on paper and in the interview, will he or she really fit into your work culture and get the job done? Will that prospective administrative assistant enjoy the work and stay committed? It can be difficult to tell on the basis of a resume, a few rounds of interviewing and reference checks that limit what can be said about an applicant.

Some employers have compensated for the risks with testing. Although the practice is controversial, some experts contend it's not necessarily the evil that employee advocates make it out to be. Says Lew Maltby, president of the National Work-rights Institute in Princeton, New Jersey, "A good psychological test might not be a bad investment if a company can use it fairly and knowledgeably."

Mind Games

What exactly is psychological testing? One type is the personality test, in which applicants or employees are given a list of 100 adjectives and asked to decide how well each of the words describes their personalities. Another technique is the integrity, or honesty, test, where the employee taking the test responds "true" or "false" to a series of statements. (A commonly used test of this type is the MMPI, or Minnesota Multi-phasic Inventory exam.) Test takers' mathematically averaged responses are supposed to give you details about their character, work ethic and personality. The fees for psychological tests range widely, from $5 to $250 per test.

Jim Sirbasku, CEO and co-founder of Profiles International Inc., an employee-assessment company in Waco, Texas, says that while clients also use his company's products for promotion, self-improvement, coaching and succession planning, a good percentage use testing to aid in hiring decisions. Profiles' "Job Match," which assesses individuals' tem-peraments and suitability for certain types of work, determines whether, for example, applicants for a sales position might be introverts who will be unhappy in the job. "If you're hiring in customer service, a field that has 200 percent turnover every year [according to The American Teleservices Association Inc.], you want to know how applicants handle frustration, stress and conflict," Sirbasku says. "Testing lets you know and makes some recommendations."

Some small companies are sold on psychological testing. "Hiring is always a guessing game," says Marika Hamilton, 28, co-owner and human resources director of Fort Wayne, Indiana-based Britannia Inc., a $5 million computer products company founded in 1989. To Hamilton, it's a very important guessing game, one she felt needed more backup than just her initial impressions of job applicants. "We'd rather leave a desk empty now than make the wrong hire," she says.

Surfing the Net about one year ago, Hamilton came across Indianapolis-based Hire Success, a company that sells various types of aptitude tests, including a personality test based on four basic personality types: director, socializer, thinker and supporter. Job applicants take the personality test online, then e-mail it to Hire Success, which scores it and sends the results to the applicant's interviewer or supervisor. In ad-dition to a summary of the person's personality type, the report includes interview questions tailored to the applicant's responses. The cost per test averages $10 to $13.

Hamilton ended up taking one of Hire Success' online personality tests and feeling it offered a fairly accurate portrayal. In fact, she was impressed enough to have Britannia's 28 employees-who work either in the company's engineering or customer support departments-take the test. Hamilton saw certain patterns emerge and believes the test gave her a way to spot common traits in her successful (as well as her not-so-successful) employees that she can now look for in job applicants. Does testing make a difference? Although Hamilton can't directly measure the impact on turnover, she thinks she's seen a decrease.

Failing The Test

While employers like Hamilton say they see benefits, psychological testing is not without its critics. Bob Schaeffer, public education director of the Cambridge, Massachusetts-based National Center for Fair & Open Testing, dismisses psychological testing as too arbitrary, like trying to use astrology to understand someone's personality. "You're trying to quantify the unquantifiable," says Schaeffer, who advises small employers to rely instead on probationary hiring periods to confirm the right fit. He believes psychological testing is a big turnoff to employees, who wonder about the purpose of the questions.

Critics also point out the lack of federal regulation or content standards for psychological testing. Without legal limits, they contend, tests could include intensely personal questions. Maltby says it's tempting for employers to go in blindly. Many outsource to psychological testing firms, then defer to the other party's expertise as they would with an accountant or a lawyer. Those who do, says Maltby, often never look at the actual tests, only the results. "Over-reliance is a major danger. Employers need to do their homework," he says. He suggests employers take the tests themselves: "If you're offended by the questions, chances are employees will be, too."

Failing to pay attention can be costly. A number of lawsuits have been filed over the years by employees complaining about the integrity tests they were required to take. In one California case, a male applicant applying for a security job sued Target Stores after he was required to take a version of the MMPI. The 704 questions on the test included "I have often wished that I was a girl" and "Was there ever a time in your life that you liked to play with dolls?" which the applicant found offensive. Target Stores lost the case in court, settled the lawsuit for $1.5 million and discontinued use of the test. California and Rhode Island have since outlawed making job applicants take the MMPI. Both Sirbasku and Kendall agree that employers need to make sure the tests they use don't go over the line. Find out whether tests are certified and graded by actual psychologists.

Maltby adds that employers need to be aware they may be losing good potential workers by requiring them to take tests. "About one-third of the time, the best candidates are being screened out," he contends.

In today's tight labor market, employers may be more concerned about filling empty desks than assessing the right fit. That could be one reason why, according to AMA, the number of companies using psychological testing decreased from 52 to 33 percent between 1998 and 1999.

Office, Sweet Office
Telecommuting is for the birds.

Telecommuting may be a hot buzzword, but it's lukewarm as an actual trend. A national survey released in May by the Radcliffe Public Policy Center and Harris Interactive Inc. reveals that only 50 percent of 1,008 respondents had any interest in telecommuting. In fact, 70 percent preferred flextime or a four-day workweek. Why this negative view of telecommuting? "People want to maintain distinct boundaries between work and home," says Radcliffe's Shannon Quinn. "They indicated that telecommuting would make them available 24/7, and they wanted a better life balance."

Just Another Brick In The Wall

Tom Kendall, vice president of Hire Success, says personality testing should not be used as a litmus test. While it may give you some basic insights, it's not a crystal ball and ideally should be just one small part of a comprehensive hiring process that includes interviews, resumes and references.

Hamilton agrees. "The interview is still the most important part of hiring, and you still have to go with your gut," she says. Today, Hamilton pulls out the test only when an interviewee gives off good vibes. "I'm not going to waste it on the wrong people," she says.

Sanso remains leery of psychological testing. He says it's "faceless" and prefers to bring a potential employee in for a day or two of shadowing-letting the applicant observe him interacting with his staff and vice versa.

If you decide to try psychological testing, first you need to know what you're after. "One size doesn't fit all. Know what you're trying to achieve," Sirbasku says. Next, find an established, certified testing company that has a reputable psychologist on staff. Ask for a list of references, then take the test yourself. If it makes you the least bit uncomfortable or if the results seem questionable to you, keep looking. If you start using a particular test, update it every so often to keep pace with your company's growth and the times.

Finally, if you use testing as a part of your hiring process, don't let it be the determining factor in your decisions. There will always be an enormous amount of information you'll never know about a person, and you can't eliminate all risk. But if used wisely, psychological testing might offer valuable insights about potential candidates that you can add to the decision-making mix. "Every brick in the wall makes it a bit stronger," says Maltby. "This is just another brick."

www.fairtest.org: This Web site is maintained by the National Center for Fair & Open Testing, an advocacy group that works against abuses, misuses and flaws in standardized testing.
www.dol.gov: The Department of Labor's Web site includes a testing and assessment manual, which offers employers a guide to good testing practices.


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This story appears in the January 2001 issue of Entrepreneur. Subscribe »