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Why Use Testing?
from Gately Consulting

* from Testing and Assessment: an Employer's Guide to Good Practices, Employment and Training Administration U.S. Department of Labor, 1999

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Quotes from the Dept. of Labor:

4. Why do organizations conduct assessment?

Organizations use assessment tools and procedures to help them perform the following human resource functions:

  • Selection. Organizations want to be able to identify and hire the best people for the job and the organization in a fair and efficient manner. A properly developed assessment tool may provide a way to select successful sales people, concerned customer service representatives, and effective workers in many other occupations.
  • Placement. Organizations also want to be able to assign people to the appropriate job level. For example, an organization may have several managerial positions, each having a different level of responsibility. Assessment may provide information that helps organizations achieve the best fit between employees and jobs.
  • Training and development. Tests are used to find out whether employees have mastered training materials. They can help identify those applicants and employees who might benefit from either remedial or advanced training. Information gained from testing can be used to design or modify training programs. Test results also help individuals identify areas in which self-development activities would be useful.
  • Promotion. Organizations may use tests to identify employees who possess managerial potential or higher level capabilities, so that these employees can be promoted to assume greater duties and responsibilities.
  • Career exploration and guidance. Tests are sometimes used to help people make educational and vocational choices. Tests may provide information that helps individuals choose occupations in which they are likely to be successful and satisfied.
  • Program evaluation. Tests may provide information that the organization can use to determine whether employees are benefiting from training and development programs.
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7. Limitations of personnel tests and procedures—fallibility of test scores

Professionally developed tests and procedures that are used as part of a planned assessment program may help you select and hire more qualified and productive employees. However, it is essential to understand that all assessment tools are subject to errors, both in measuring a characteristic, such as verbal ability, and in predicting performance criteria, such as success on the job. This is true for all tests and procedures, regardless of how objective or standardized they might be.

  • Do not expect any test or procedure to measure a personal trait or ability with perfect accuracy for every single person.
  • Do not expect any test or procedure to be completely accurate in predicting performance.

There will be cases where a test score or procedure will predict someone to be a good worker, who, in fact, is not. There will also be cases where an individual receiving a low score will be rejected, who, in fact, would actually be capable and a good worker. Such errors in the assessment context are called selection errors. Selection errors cannot be completely avoided in any assessment program.

Why do organizations conduct testing despite these errors? The answer is that appropriate use of professionally developed assessment tools on average enables organizations to make more effective employment-related decisions than use of simple observations or random decision making.

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1. Title VII of the Civil Rights Act (CRA) of 1964 (as amended in 1972); Tower Amendment to Title VII Title VII is landmark legislation that prohibits unfair discrimination in all terms and conditions of employment based on race, color, religion, sex, or national origin. Other subsequent legislation, for example, ADEA and ADA, has added age and disability, respectively, to this list. Women and men, people age 40 and older, people with disabilities, and people belonging to a racial, religious, or ethnic group are protected under Title VII and other employment laws. Individuals in these categories are referred to as members of a protected group. The employment practices covered by this law include the following:

  • recruitment
  • transfer
  • performance appraisal
  • disciplinary action
  • hiring
  • training
  • compensation
  • termination
  • job classification
  • promotion
  • union or other membership
  • fringe benefits.

Employers having 15 or more employees, employment agencies, and labor unions are subject to this law.

The Tower Amendment to this act stipulates that professionally developed workplace tests can be used to make employment decisions. However, only instruments that do not discriminate against any protected group can be used. Use only tests developed by experts who have demonstrated qualifications in this area.

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  1. Uniform Guidelines on Employee Selection Procedures—1978; adverse or disparate impact, approaches to determine existence of adverse impact, four-fifths rule, job-relatedness, business necessity, biased assessment procedures
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In 1978, the EEOC and three other federal agencies—the Civil Service Commission (predecessor of the Office of Personnel Management) and the Labor and Justice Departments—jointly issued the Uniform Guidelines on Employee Selection Procedures...

The Guidelines cover all employers employing 15 or more employees, labor organizations, and employment agencies. They also cover contractors and subcontractors to the federal government and organizations receiving federal assistance. They apply to all tests, inventories and procedures used to make employment decisions. Employment decisions include hiring, promotion, referral, disciplinary action, termination, licensing, and certification. Training may be included as an employment decision if it leads to any of the actions listed above. The Guidelines have significant implications for personnel assessment.

One of the basic principles of the Uniform Guidelines is that it is unlawful to use a test or selection procedure that creates adverse impact, unless justified. Adverse impact occurs when there is a substantially different rate of selection in hiring, promotion, or other employment decisions that work to the disadvantage of members of a race, sex, or ethnic group.

Different approaches exist that can be used to determine whether adverse impact has occurred. Statistical Techniques may provide information regarding whether or not the use of a test results in adverse impact. Adverse impact is normally indicated when the selection rate for one group is less than 80% (4/5) that of another. This measure is commonly referred to as the four-fifths or 80% rule. However, variations in sample size may affect the interpretation of the calculation. For example, the 80% rule may not be accurate in detecting substantially different rates of selection in very large or small samples. When determining whether there is adverse impact in very large or small samples, more sensitive tests of statistical significance should be employed.

When there is no charge of adverse impact, the Guidelines do not require that you show the job-relatedness of your assessment procedures. However, you are strongly encouraged to use only job-related assessment tools.

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One of the basic principles of the Uniform Guidelines is that it is unlawful to use a test or selection procedure that creates adverse impact, unless justified. Adverse impact occurs when there is a substantially different rate of selection in hiring, promotion, or other employment decisions that work to the disadvantage of members of a race, sex, or ethnic group...

When there is no charge of adverse impact, the Guidelines do not require that you show the job-relatedness of your assessment procedures. However, you are strongly encouraged to use only job-related assessment tools.

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3. Interpretation of reliability information from test manuals and reviews

Test manuals and independent review of tests provide information on test reliability. The following discussion will help you interpret the reliability information about any test.

The reliability of a test is indicated by the reliability coefficient. It is denoted by the letter “r,” and is expressed as a number ranging between 0 and 1.00, with r = 0 indicating no reliability, and r = 1.00 indicating perfect reliability. Do not expect to find a test with perfect reliability. Generally, you will see the reliability of a test as a decimal, for example, r = .80 or r = .93. The larger the reliability coefficient, the more repeatable or reliable the test scores. Table 1 serves as a general guideline for interpreting test reliability. However, do not select or reject a test solely based on the size of its reliability coefficient. To evaluate a test’s reliability, you should consider the type of test, the type of reliability estimate reported, and the context in which the test will be used. Table 1. General Guidelines for
Interpreting Reliability Coefficients
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Reliability
coefficient
value
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Interpretation
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0.90 and up
0.80 - 0.89
0.70 - 0.79
below 0.70
excellent
good
adequate
may have limited applicability
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5. Personality inventories

In addition to abilities, knowledge, and skills, job success also depends on an individual’s personal characteristics. Personality inventories designed for use in employment contexts are used to evaluate such characteristics as motivation, conscientiousness, self-confidence, or how well an employee might get along with fellow workers. Research has shown that, in certain situations, use of personality tests with other assessment instruments can yield helpful predictions.

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7. Ensuring both efficiency and diversity

To help ensure both efficiency and diversity in your workforce, apply the whole-person approach to assessment. Use a variety of assessment tools to obtain a comprehensive picture of the skills and capabilities of applicants and employees. This approach to assessment will help you make sure you don’t miss out on some very qualified individuals who could enhance your organization’s success.

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9. How to interpret validity information from test manuals and independent reviews

To determine if a particular test is valid for your intended use, consult the test manual and available independent reviews. (Chapter 5 offers sources for test reviews.) The information below can help you interpret the validity evidence reported in these publications.

  • In evaluating validity information, it is important to determine whether the test can be used in the specific way you intended, and whether your target group is similar to the test reference group.

    Test manuals and reviews should describe
    • Available validation evidence supporting use of the test for specific purposes. The manual should include a thorough description of the procedures used in the validation studies and the results of those studies.

    • The possible valid uses of the test. The purposes for which the test can legitimately be used should be described, as well as the performance criteria that can validly be predicted.

    • The sample group(s) on which the test was developed. For example, was the test developed on a sample of high school graduates, managers, or clerical workers? What was the racial, ethnic, age, and gender mix of the sample?
    • The group(s) for which the test may be used.
  • The criterion-related validity of a test is measured by the validity coefficient. It is reported as a number between 0 and 1.00 that indicates the magnitude of the relationship, “r,” between the test and a measure of job performance (criterion). The larger the validity coefficient, the more confidence you can have in predictions made from the test scores. However, a single test can never fully predict job performance because success on the job depends on so many varied factors. Therefore, validity coefficients, unlike reliability coefficients, rarely exceed r = .40.
As a general rule, the higher the validity coefficient the more beneficial it is to use the test. Validity coefficients of r=.21 to r=.35 are typical for a single test. Validities for selection systems that use multiple tests will probably be higher because you are using different tools to measure/predict different aspects of performance, where a single test is more likely to measure or predict fewer aspects of total performance. Table 3 serves as a general guideline for interpreting test validity for a single test. Evaluating test validity is a sophisticated task, and you might require the services of a testing expert. In addition to the magnitude of the validity coefficient, you should also consider at a minimum the following factors: Table 3. General Guidelines for Interpreting Validity Coefficients Validity coefficient value Interpretation
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Validity
coefficient
value
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Interpretation
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above 0.35
0.21 - 0.35
0.11 - 0.20
below 0.10
very beneficial
likely to be useful
depends on circumstances
unlikely to be useful
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