Psychological Assessment in Industrial/Organizational Settings

The Nature of Assessment in Industrial and Organizational Settings

With regard to assessments in work settings, the focus is on their multiple (and at
times conflicting) purposes, they types of factors measured, the approach used, and the
role that assessment must play to insure business success

Purposes
Business Necessity
- Assessments in work organization are conducted for business related reasons
- Needed to design, develop, implement, or evaluate the impact of a business
policy or practice
- Uses assessment information to index the level of skill or competency of its
employees or their level of satisfaction
- Serves to address the issue of how well the firm is conforming to its own
business plans
Work organizations uses assessments for selecting new employees (trying to identify
who will work hard, perform well, and not steal) or in the context of conducting
performance appraisals. The latter, in tur, serve as the basis for compensation or
promotion decisions. Assessments of an individual’s level of work performance can
become the basis for the termination of employment as well.

Individual Necessity
Individual assessments in industry can also be performed with the goal of
meeting the needs of the individual worker as well.
- The assessment of individual training needs once made, can become the basis
for a specific worker’s training and development experiences to guide the
work to just what programs or assignments would best remedy a particular
deficiency, and inform the worker of his or her progress in skill acquisition
- Guide the worker relative to a work career through competency assessments
relative to potential future jobs or different careers
- Individual assessments are at the core of counseling and coaching in the
workplace
Research Necessity
Many work organizations and consultants to industry take an empirical approach
to the design, development, and evaluation of personnel practices. In this regard,
assessment data, usually with regard to an individual’s job performance, work-related
attitudes, or job-relevant behavior, are obtained in order to serve as research criterion
measures.

Attributes Measured
Individual Difference (Person) Factors
The traditional focus on what to measure has been on those individual difference
factors that are thought to account for worker success.
These person factors are frequently thought of as inputs to the design and
management of work organizations.
- Attributes to be assessed derive from an analysis of the worker’s job duties
and include specific forms of knowledge, skills, abilities, or other attributes
(KSAOs) implying work-related interests and motivation
- Focus has been on competencies, the demonstrated capacity to perform job-
relevant activities
Process Factors
Assessments of individual in work settings may also focus on the process used by
the employee to get the job done.
- The kinds of behaviors that are necessary and must be carried out well in the
workplace if the worker is to be considered successful
- Derive from an analysis of the job and of the behaviors that distinguish
effective employees from less effective ones
Accountability for Generating Outcomes
For the most part, employees in work organizations are held accountable for
generating products: outcomes or results.

Assessments are focused on

- Quality and quantity of performance
- Frequency of accidents
- Number of product innovation proposed
The basis for such assessments might be a matter of record. Often, however, human
judgment and skill are required in locating and categorizing work outcomes relative to
some standard.
Outcome assessments are often used as the basis for compensation and retention
decisions. In the course of the year, most individuals in work organizations might be
assessed against all three types of assessments.

Approaches Used for Assessment

Three features of the approach favored by many of those doing assessment work
in industry are worth highlighting.
1. Many assessment platforms are built on careful development and backed up by
empirical evidence
2. Most assessments of individuals in work contexts are not done by psychologists.
Instead, managers, supervisors, trainers, and even peers are typically involved in
evaluating individuals on the factors of interest.
3. Assessments are being done on many individuals at the same time or over a short
period of time.
Demand for Skilled Workers
Given the strength of the so-called new economy, the demand for skilled workers
is intense. Clearly there are intense competitive pressures to recruit, select, and retain
good employees. Those responsible for the design and management of platforms for
individual assessment must contribute to meeting such pressures or they will not be
retained.

Demand for Efficiency

Another marketplace demand is for efficiency. The availability of resources
notwithstanding, few organizations can escape investor scrutiny with regard to their
effective use of resources.
When it comes to assessment programs, this implies that new approaches will be
of interest ultimately found acceptable if it can be demonstrated that
- They have address a business problem
- They add value over current approaches
- They have utility, in the sense that the time and costs associated with
assessment are substantially less than the gains realized in terms of worker
behavior or performance.
Speed to Market
All other things considered, new and useful assessment tools or programs need to
be brought on line quickly to solve a business problem. Similarly, the information on
those individuals assessed must be made available quickly so that decisions can be made
in a timely manner. These factors may cause an organization to choose to make heavy
use of external consultants for assessment work in the context of managing their human
resource needs and their bottom line.

Purpose, focus, and tools for assessment in Industrial/Organizational Settings

Purpose of Assessment in Industry

Selection
Selection is relevant to organizations when there are more qualified applicants
than positions to be filled. The organization must decide who among those applicants
can perform best on the job and should therefore be hired. That decision is based upon
the prediction that the person hired will be more satisfactory than the person rejected.
The goal of the selection is thus to capitalize on individual differences in order to
select those persons who possess the greatest amount of particular characteristics
judged important for job success.

Promotion
When we are conducting an assessment of performance, we are generally
determining an individual’s achievement at the time of the assessment. At work,
assessment for promotion might be a work sample or job knowledge test or multisource
feedback on the individual’s performance over the past year on the job. Additionally,
assessment centers are methods for assessing and individual’s potential for promotion.

Challenges in Assessment for Promotion

- When a new job requires additional KSAOs or the employee is moving to a
new position requiring new skills. In this situation, the assessment should
focus on the future potential rather than simply past performance.
- Using yearly performance appraisals to determine who should be promoted.
Other tools, which involve the use of multiple trained raters used in
conjunction with the performance appraisal, might be used to remedy this
problem.
Career Planning
Career planning is the process of helping individuals clarify a purpose and a
vocation, develop career plans, set goals, and outline steps for reaching those goals. A
typical career plan includes identification of a career path and the skills and abilities
needed to progress in the path. It involves assessment planning, goal setting, and
strategizing to gain the skills and abilities required to implement the plan. It can be
supported by coaching and counseling from a psychologist or from managers and
human resources (HR) specialists within a company.
Assessments for the purpose of career planning would be conducted to that
individuals can have a realistic assessment of their own potential as well as their values,
interests, and lifestyles.
Training is often a large part of career planning because it facilitates the transfer
of skills that are necessary as the individual takes on new tasks. Assessments in this
context are used to see if people are ready for training.

Classification
Assessments can also be used to determine how to best use staff. The results of an
assessment might provide management with knowledge of the KSAOs of an individual
and information on his or her interests. Classification decision are based upon the need
to make the most effective matching of people and positions.

Employee Assistance Programs

Many organizations use assessments as part of Employee Assistance Programs
(EAPs). Often these programs are viewed as an employee benefit to provide employees
with outlets for problems that may affect their work. Assessments are used to diagnose
stress or drug-related problems. The individual might be treated through the firm’s EAP
or referred to a specialist.

Compensation
Organizations also assess individuals to determine their appropriate
compensation. A traditional method is to measure the employee’s job performance (job-
based compensation). More recently, some organizations are using skill-based pay
systems, according to which individuals are compensated on explicitly defined skills
deemed important for their organization.
Focus of Assessment in Industry
Cognitive Ability Tests
The literature has established that cognitive ability, and specifically general
mental ability, is a suitable predictor of many types of performance in the work setting.
The construct of cognitive ability is generally defined as the “hypothetical attributes of
individuals that are manifest when those individuals are performing tasks that involve
the active manipulation of information”.
Personality
Personality is often conceptualized as a dynamic psychological structure
determining adjustment to the environment but manifest in the regularities and
consistencies in the behavior of an individual over time.
Teamwork Skills
Although an organization is interested in overall team performance, it is
important to focus on the individuals’ performance within the team (individual-in-team
performance) so that we know how to select and appraise them.
The team analysis focuses on the team’s role, the team’s division of labor, and the
function of the position. The results have implications for the KSAOs needed for the job.
Physical Abilities
Physical abilities are important for jobs in which strength, endurance, and
balance are important.
Measures developed to assess these abilities have predicted work sample criteria
effectively. However, they must be used with caution because they can cause
discrimination. The key here is that the level of that ability must be job relevant.
Job-Specific Knowledge and Skills
The O*NET system of occupational information suggests that skills can be
categorized as basic, cross-functional, and occupational specific.
- Basic Skills: are developed over a long period of time and provide the
foundation for future learning
- Cross-functional skills: are useful for a variety of occupations and might
include such skills as problem-solving and resource management.
- Occupational (or job-specific) skills focus on those tasks required for a
specific occupation.
Honesty and Integrity
The purpose of honesty/integrity assessments is to avoid hiring people prone to
counterproductive behaviors.
Sackett, Burriss, and Calahan (1989) classify the measurement of these constructs into
two types of test
The first type of test is overt test, which directly assess attitudes toward theft and
dishonesty. They typically have two sections. One deals with attitudes towards theft and
other forms of dishonesty. The other deals with admissions of theft.
The second type consists of personality-based tests, which are designed to predict
a broad range of counterproductive behaviors such as substance abuse.
Interpersonal Skills
Skills related to social perceptiveness include the work of Goleman (1995) on
emotional intelligence and works on social intelligence. Goleman argues that empathy
and communication skills, as well as social and leadership skills, are more important for
success at work (and at home). Organizations are assessing individuals on emotional
intelligence for both selection and developmental purposes.
Another interpersonal skill that is used in industrial settings is social intelligence,
which is defined as “acting wisely in human relations” (Thorndike, 1920). Socially
intelligent individuals can better manage interpersonal interactions.
Interests
Psychologists in industrial settings use interest inventories to help individuals with
career development. Large organizations going through major restructuring may have
new positions in their organization. Interest inventories can help individuals determine
what new positions might be a fit for them. Organizations going through downsizing
might use these inventories as part of their outplacement services.
Learning
Psychologists in industry also assess
- Ability to learn for the purpose of determining potentials success in a training
effort or on the job.
- Information that one has learned to determine whether individuals learned
from attending a training course
Tools used to assess learning can range from knowledge tests to cognitive
structures or to behavioral demonstration of competencies under standardized
circumstances.
Training and Experience
Organizations often use training and experience information to determine if the
individual, based on his or her past, has the KSAOs necessary to perform in the job of
interest. This information is mostly used for selection. An applicant might describe his
or her training and experience through an application form, a questionnaire, a resume,
or some combination of these.
Job Performance
Job performance information is frequently used for compensation or promotion
decisions, as well as to refer an individual to an EAP (if job performance warrants the
need for counseling). In these situations, job performance is measured to make
personnel decisions for the individual. In typical validation studies, job performance is
the criterion are used as predictors.

Tools
Cognitive Ability Tests
Schmidt and Hunter (1998) conducted a meta-analysis of measures used for
hiring decisions. They have found out that cognitive ability tests (e.g., Wonderlic
Personnel Test, 1992) are robust predictors of performance and job-related learning.
Personality Tests
Several tools are available to measure personality. Some focus on the Five Factor
Model of Personality (e.g., NEO-PI-R; Costa & MCrae, 1992), whereas others focus on a
broader set of personality characteristics (e.g., 16PF; Cattell et al., 1993)
Teamwork Skills Assessments
Several industrial/organizational psychologists have investigated those
knowledge, skills, and abilities (KSAs) and personality dimensions that are important
for teamwork.
For example, Stevens and Campion (1994) studied several teams and argued that
two major categories of KSAs are important for teamwork: interpersonal KSAs and self-
management KSAs. Steve and Campion’s teamwork KSAs are conflict resolution,
collaborative problem solving, communication, goal setting and performance
management, planning, and task coordination.
Physical Abilities Test’
In jobs such as those of police officer and fire fighter, physical strength (e.g.,
endurance or speed) is critical to job performance. Therefore, tools have been developed
to assess the various types of physical abilities. Fleishman and Reilly’s work in this area
identifies nine major physical ability dimensions along with scales for the analysis of job
requirements for each of these dimensions that are anchored with specific examples
- Dynamic strength (strength requiring repetition)
- Trunk strength (stooping or bending over)
- Explosive strength (jumping or throwing objects)
- Static strength (strength not requiring repetitions)
- Dynamic flexibility (speed of bending, stretching, twisting)
- Extent Flexibility (degree of bending, stretching, twisting)
- Gross body equilibrium (balance)
- Gross body coordination (coordination when body is in motion)
- Stamina (ability to exert effort over long periods of time)

Tools to Measure Job-Specific Knowledge and Skill

- Work Sample Tests: Work sample tests are used to measure job-specific
knowledge and skill
o Hands-on job simulations that must be performed by applicants
o Assess one’s procedural knowledge base
o Cannot be used to hire or evaluate inexperienced employees
- Job Knowledge Tests: Job knowledge tests are also used to assess job-specific
knowledge and skills
o Cannot be used to hire or evaluate inexperienced employees
o Often constructed by the hiring organization on the basis of a job
analysis
o Although they can be developed internally, this is often costly and
time-consuming
Honesty and Integrity
- Show greater validity and utility than do work samples
- Possess impressive criterion-related validity
- Both overt and personality-based integrity tests correlated with measures of
broad counterproductive behaviors such as violence on the job, tardiness, and
absenteeism
- Shows no evidence of adverse impact against women or racial minorities
Assessments of Interpersonal Skills
Interpersonal skills are often found in the results of job analyses or competency
studies. Therefore, an organization might assess interpersonal skills in an interview by
asking the candidate to respond to questions on how they handled past experiences
dealing with difficult interpersonal interactions.
Employment Interviews
- Unstructured Interviews: Unstructured interviews have no fixed format or set
of questions to be answered. There is no format for scoring responses.
- Structured Interviews: Structured interviews include questions that are
determined by a careful job analysis and they have set of questions and a set
approach to scoring. Structured interviews have greater validity and show a
24% increase over cognitive ability alone in validity.
o Although there is no one universally accepted structured interview tool,
depending on how structured the interview is, it might be based on
detailed protocols so that candidates are asked the same questions and
assessed against the same criteria

Assessment Centers
In assessment centers, the participant is observed participating in various
exercises such as leaderless group discussions, supervisor/subordinate simulations, and
business games. The average assessment center includes seven exercises and lasts two
days.
Interest Inventories
- Used to help individuals going through a career change
- Validated often against their ability to predict occupational membership
criteria and satisfaction with a job
- Useful to help individuals determine next steps in their career development
Training and Experience
There are two assumptions of experience and training rating techniques.
1. They are based on the notion that a person’s past behaviors are a valid
predictor of what the person is likely to do in the future.
2. As individuals gain more experience in an occupation, they are more
committed to it and will be more likely to perform well in it.
Questions on biographical data
- Contain questions about life experiences such as involvement in student
organizations, offices held, and the like
- Historical data, such as attendance and accomplishments, are included in
these inventories
Measures of Job Performance
Measures of job performance are often in the form of supervisory ratings or
multisource assessment platforms and can be used for promotions, salary increases,
reductions in force, development, and for research purposes
Supervisory assessments: In the form of ratings, are the most prevalent
assessments of job performance in industrial settings.
Supervisors generally rate individuals on their personal traits and attributes
related to the job, the processes by which they get the job done, and products that result
from their work.

Multisource Assessment Platforms: are based on evaluations gathered about a target

participant from two or more rating sources, including self, supervisors, peers, direct
reports, internal customers, external customers, and vendors or suppliers. The ratings
are based on KSAOs related to the job. Results of multisource assessments can be either
provided purely for development or shared with the supervisor as input to a personnel
decision. The problem with sharing with the supervisor is often the quality of ratings is
poorer when the raters know that their evaluations will be used for personnel decisions.