Recommendations For Standardized Testing In Hiring Processes At Multinational Corporations, Part 1

The success of any global organization is dependent upon the productivity and collaboration of its employees. Therefore, companies pour significant time and expense into finding the right talent for the organization, based on the criteria they believe is necessary to a particular position. Despite the connection between a thorough selection process and successful hires, managers continue to be frustrated by the time and cost involved in making the right hire, and unconscious bias continues to plague the selection process. Can technology, specifically the use of standardized testing make a difference in the recruitment and talent acquisition process? In this paper I will argue that technologically advanced and properly implemented standardized testing, in conjunction with traditional recruitment techniques, presents the best method for hiring and selecting the best candidates for a position.

First it is important to identify and discuss the costs associated with the talent acquisition process and the problems associated with traditional recruitment techniques. The cost of the selection process can include advertising the role in a variety of media, the usage of an employment agency, screening of the candidate, time taken for interviews or assessments, and training (Randall & Randall, 2001). The cost and time involved is often a source of frustration for many hiring managers. Yet, many hiring managers fail to realize that the cost of hiring a person who does not end up meeting the standards of the company and his/her position can be astounding. All these costs plus the individual’s salary are wasted when a hiring mistake is made. Companies do not want to spend these sums of money on hires that are ineffective or not performing. This is why it is so imperative to develop a sound talent acquisition process and to identify what method or combination of techniques will bring the best results.

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A company can use from one to many techniques for identifying talent. These techniques or methods can vary from interviews, letters of recommendation, reference checks or standardized tests. Tests can be divided into several categories. Some categories are personality tests, honesty tests, preferences tests, or even specially programmed video games. Each technique or method has its own strengths and weaknesses.

Interviews are the most widely used method of hiring and selection (Avery, 1979). However, interviews as a form of talent selection often have problematic results. Even though it has been consistently concluded that this approach of talent selection has insufficient reliability and validity, (Reilly & Chao, 1982) talent acquisition teams are simply unwilling to give up interviews as a method of selection even though other more viable options for selection exist (Orpen, 1985). One of the main problems with interviewing as a selection technique is that interviewers have an inconsistent stereotype of the ideal candidate even within the same company (Johnston & Cooper, 1981). Furthermore, research has shown that usually interviewers make a decision in the first five minutes of the interview about a candidate, based upon personal, often unconscious bias. The remaining portion of the interview time is spent searching for evidence to confirm these assumptions. (Sharer, 1986). This problem is exaggerated further among recruitment teams that operate globally. Cultural context within multinational organizations must be taken into account, while not dictating, the talent acquisition process. Interviews become a problematic talent selection tool when used exclusively, because they are too reliant on the impressions and underlying cultural assumptions and perspectives of the interviewer.

Despite the problems and bias associated with the interview process, it is important not to take a fatalist view of interviewing as a whole. Interviews can still be an effective technique for identifying key candidates when recruiters and hiring managers are properly trained on proper interviewing techniques and interviews are used in combination with other recruitment techniques. Recruitment teams can improve the chances of successful and un-bias interviews by taking a few concrete steps. First, interviewers must learn of potential employees through networking, such as employment fairs or talent pooling. Second, interviewers can save time and energy through telephone interviewing, which also eliminates the bias inherent to physical appearance. Thirdly, prior to an in person interview, recruiters must ensure that a candidate has demonstrated to have the appropriate prerequisites for the role (Greenberg & Greenberg, 1985). Furthermore, in order to strengthen interviews as a method, they must, in some sense, be standardized. Recruiters and hiring managers must ask candidates the same set of questions. This is known as “structured interviews.” Well-developed questions that test for certain skills and abilities must be asked to each candidate across all interviews for each particular role (Taylor, 1999). Recruitment teams must be trained and aim for consistency in all aspects of in the interview process, even down to the time allotted for each candidate. Finally, interviews can be strengthened through the introduction of technology and data gleaned from standardized testing and machine learning, as will be discussed later in this paper.

Many job applications often include space for letters of recommendations or testimonials of past work experience. This is typically most common in the academic and non-profit world, but still utilized in by for-profit companies. Research shows that letters of recommendations, while often solicited from trusted colleagues and mentors, bears little importance to hiring managers unless the letter illustrates a specific example of past performance. Closely related to letters of recommendations, are reference checks. While these may seem to carry a certain amount of weight, research shows that they have low correlation with a candidate’s performance (Ford, Walker, Churchill, & Hartley, 1987). Therefore these methods are not recommended.

Another significant problem with the hiring and selection process is that companies, while able to identify their high-performers, cannot always identify what qualities and abilities make those employees excel in their roles. Because they cannot pinpoint these characteristics, they are not ensured to make a quality hire in the future (Kerley, 1985). Standardized tests, along with cross-validation can solve this problem. There are many different types of standardized testing that talent acquisition teams can utilize. These include personality tests, honesty tests, or job simulations.

An important step towards the usage of any standardized test is ensuring its validity. To ensure the validity of a standardized test used for selection processes, talent acquisition team needs to take several things into account. Before using one of these tests, employers must examine whether the test does in fact measure what it is intended to measure (Bertrand, 1990). When using one such test, it is very important to customize it so that it relates as closely as possible to the position to be filled and the company’s mission and set of values. After customizing such tests, cross-validation is necessary. Consider a real world example. Let us say that a pharmaceutical company is searching for a new sales representative. In order to use personality tests that are cross-validated, a company should test a sample of their strongest and most successful sales representatives as well as of their weakest and least successful representatives (Plotkin, 1987). From those results, it can be determined what set of skills to look for or avoid in candidates. Furthermore, the results will also help in the creation of a profile of the personality traits of a high-performing sales representative (Bertrand, 1990). Cross validation is extremely important to the implementation and success of personality tests in the hiring process. Without cross-validation, personality tests become an ineffective and even detrimental tool in the hiring process. Furthermore, cross-validation is even more essential for companies that are global in nature. Talent acquisition teams must spend extensive time with job descriptions and templates of successful employees to determine the variability of roles functioning in different parts of the world. Cultural context will transform the types of skills needed in each position. Additionally, multinational companies will need to search for candidates with underlying personality traits such as adaptability and tolerance in order to develop collaborative and diverse teams.

In addition to the strengths mentioned above, standardized tests are designed to avoid bias, by giving a more objective assessment of the candidate’s knowledge, skills, and abilities. For example, standardized testing eliminates ‘physical appearance bias,’ which occurs when hiring and compensation choices are influenced by the way an individual looks. Hence the saying, “Good looks bring larger paychecks.” (Biddle & Hammermesh, 1998). Nevertheless, it is important to recognize that standardized tests will never find the perfect candidate all the time. However, they help talent acquisition teams weed out candidates who are not qualified for the position.

Furthermore, standardized testing can uncover the underlying traits that recruiters and hiring managers have previously used ill-fated methods to attempt to ascertain. For example, consider again the hiring process of a sales representative. In the past, in order to predict for emotional maturity and motivation, companies used to ask individuals biographical information such as whether a candidate was married, raised children, or had significant financial obligations such as a mortgage. These questions were thought to access the characteristics that employers were looking for in successful sales reps (Ford et al., 1987). Of course these very questions are, for good reason, now illegal to ask in the hiring process, because they often lead to very discriminatory hiring practices. However, standardized testing makes possible a way to extract this information about the underlying personality traits of an individual in a truer, more effective, and non-bias manner.

Part 2 is already out!

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