Research has shown that staff vary widely in their productivity, and
that psychometric tests can effectively predict this variation. Research
has also calculated the financial benefits of psychometric selection,
and has confirmed what many have known all along: good staff are critical
to organisational success. Two of the most cost-effective and widely-used
methods of selecting staff are ability testing and personality testing.
Recommendations for the effective use of these tools are made.
Most business people agree that recruiting the right employees is critical
to business success. Recently, researchers have tackled the complex
business of putting a dollar value on good employees. Certain estimates
emerge from this research with remarkable consistency(5).
difference in production between a good employee and an average employee
is worth half of that persons salary*. The same difference exists
between an average employee and a poor employee.
In most industries, the average employee does work worth twice their
salary each year (because of costs, the business wouldn’t be
able to survive otherwise).
for salary of $40,000
for this position, a good employee produces $20,000/year more than an
average employee, and $40,000/year more than a poor employee.
These estimates are conservative and hold for skilled blue collar (eg,
a junior builder) or administrative white collar jobs (eg, an administrative
assistant). The differences in productivity are larger for professional
jobs. They are smaller for jobs where employees follow very strict routines
(eg, working on an assembly line).
differences in productivity can spell the difference between a business
thriving, and a business failing. Do the maths for the number of employees
in your business – can you afford not to select the best?
A ‘good’ worker is someone who is better than 85% of
workers. A ‘poor’ worker is someone who is better than
only 15% of workers. An average worker is better than 50% of workers.
Estimates were derived across a wide variety of industries, and
across a variety of methods of calculating value of work performed.
selection is the most reliable method of choosing employees This
graph shows how well different methods of selecting employees work.
The combination of ability and personality testing appears to be the
most effective method. These tools are far more cost-effective than
other methods with similar validity – structured interviews and
job knowledge and work sample tests need to be professionally produced
for each particular job type.
Researchers have devised empirically based methods of calculating the
economic benefits of different selection methods(5,14).
These calculations can become somewhat complex. However, take an example
of recruiting a secretary on a salary package worth $40,000, where there
are 10 candidates for one position. On average, choosing the successful
candidate using ability and personality testing combined, compared to
using interview alone, would result in over $15,000 worth of increased
output per year the employee stays with the company. Additional benefits
with direct financial consequences include decreased staff turnover,
increased trustworthiness of staff, and better team cohesion and morale.
Typically, psychometric methods of selection result in large financial
benefits across a broad range of jobs(13). It
is not just academic psychologists who have observed this fact. The
financial benefits of better selection are very real and noticeable,
and as a consequence psychometric tests have been almost universally
adopted by large corporations and military forces around the world.
The impact on overall organisational performance is often dramatic(13).
Smaller organisations are less likely to have first-hand experience
of the benefits of psychometric selection, but more are discovering
them each year.
psychologists can discuss the applicability of psychometric methods
of selection to your specific organisation.
don't interviews work better?
Nearly all employers use employment interviews as part of the staff
selection process(17). Most interviews are carried
out in a fairly unstructured, subjective fashion. Traditionally, psychological
researchers have been very sceptical about the predictive value of unstructured
job interviews. More recent evidence has suggested that interviews do
have some value, but that they are not nearly as predictive as ability
tests, or as ability tests combined with personality tests(20).
On the potentially useful side, the impressions of interviewers tend
to be influenced by factors like the social adeptness of the employee,
extraversion, and to a small extent by cognitive ability. On the negative
side, interviewers are also influenced by impression management and
outright deception on the part of candidates, by similarity between
the interviewer and interviewee, and by superficial characteristics
like the physical attractiveness of the candidate. Unstructured interviews
are notoriously subjective – different interviewers tend to come
to different conclusions about applicants(17).
Interviewers, including trained psychologists, also find it very difficult
to determine the conscientiousness, trustworthiness, and emotional stability
of applicants. For these reasons, it is better to use an interview as
part of an assessment process, rather than by itself.
things to know when thinking about selection
Traditionally, research into which selection methods are the most useful
has concentrated on predicting overall job performance. More recent
research(3) has made a distinction between whether
can do the job (‘core task proficiency’, eg a
plumber can install a sink)
will do the job (eg employee follows rules, gets along with
other team members)
performance criteria are both important, but they are sometimes predicted
by different things.
is also important to know that over the last two decades substantial
progress has been made in personnel selection. In particular, it was
once widely believed that personality tests were not useful for personnel
selection; it is now known that they can be very useful(19).
for the usefulness of Ability Tests
The validity of tests of general mental ability in predicting job performance
is one of the best established findings of psychology(21).
The US Army has conducted a 20 year research project, involving thousands
of participants, into the prediction of job performance across a wide
variety of military jobs(3). The conclusion of
this project was that measurement of general mental ability is the core,
most critical tool for staff selection. Research by the US Employment
Service, involving over 32,000 applicants to nearly every kind of job
that exists, has also concluded that general mental ability is a near-universal
predictor of job performance.
Employment Service findings on the validity of ability tests(21)
mental ability versus specific abilities
Mental ability is not unitary – someone can be good with words,
bad with numbers, but good at rotating maps in their head. However,
all known tests of mental ability are positively correlated(16)
– that is, people who are good at one kind of task involving mental
ability also tend, on average, to be good at other tasks which appear
to be completely different. General mental ability is essentially the
tendency to be good at a wide range of cognitively demanding tasks,
and it can be effectively estimated with certain tests.
there has been some debate about whether specific abilities or general
ability are more important. Some important conclusions can now be drawn.
General mental ability is important for any but the most simple of
Verbal and numerical ability are important in administrative and management
Psychomotor ability is important in hands on jobs, eg driving a truck(5).
Spatial ability is
also important in some specific jobs, eg a tank gunner(3).
and numerical ability combined provide a good indicator of general mental
ability(16), and provide sufficient information
about ability for most selection decisions. APP psychologists can provide
further advice on the relevancy and availability of tests of various
level and job type
As previously indicated, general ability is more important for some
jobs than for others. As a general rule(7), a
higher level of general ability is required for tasks that are
Require continuous learning and adaptability
have identified the average IQ of applicants for various jobs. A rule-of-thumb
that will give your organisation a competitive advantage is to select
people from the upper half of the distribution of ability amongst applicants
for that position. In general, candidates for a position will possess
a wide range of ability test scores. Candidates with an IQ that is unusually
high for a position (15 or more IQ points above the median) may become
bored with the role if they are not given sufficient opportunity for
extra responsibility and advancement.
Potential of IQ
and synthesise information easily
learn well from independent study or reading assignments
with written instruction plus supervised experience
in simpler roles
to allow extensive hands-on, supervised experience
to be explicitly taught exactly what to do
from information in Gottfredson (1997)).
not just use educational background?
Many organisations use educational background to select staff. This
is appropriate and necessary for many situations: employees of course
need to have learnt the specific technical knowledge required by a job.
Employers sometimes also use educational level to try to measure the
kinds of skills that are in fact a function of general mental ability:
the ability to reason, solve novel problems, and learn new material.
Psychometric testing has several advantages over this procedure:
It is far more predictive of job performance (see graph above)
It compares participants fairly and objectively, bypassing the complexity
of comparing academic records from institutions which may have very
Candidates who have invested more time in tertiary education quite
reasonably expect to be compensated with higher salaries
is evidence that there is a wide range of IQs among people of all levels
of education(16). It does not make economic sense
to exclude someone who clearly has the ability to do a job, simply because
they have not completed an arbitrary number of years at university.
for the validity of the APP online ability tests
The APP ability tests assess two areas of mental ability
Verbal Reasoning measures how well someone
can see relationships and solve problems using words and language.
Numerical Reasoning measures how well someone
can see relationships and solve problems using numbers.
and numerical reasoning are perhaps the most widely applicable aspects
of mental ability in today’s workforce, and are particularly predictive
of performance in administrative and managerial tasks(3).
There is also considerable evidence that overall performance on these
tests is strongly related to general mental ability(16),
and thus is predictive of performance on a wide variety of job tasks.
APP online ability tests were written and tested by APP’s psychologists.
The items they contain have been trialled and normed using a representative
sample of the Australian population. The tests are scored using Item
Response Theory (IRT), which allows them to accurately discriminate
between bright individuals.
reliability of the APP ability tests compares favourably to other ability
tests(15). APP have also conducted a study which
found that their ability tests predict scholastic achievement (as measured
by VCE exam performance) with an accuracy that is similar to that of
other well-regarded ability tests(15).
and Job Performance
Research has shown that certain personality measures can predict job
performance, and that combining these tests with ability tests can result
in better prediction than the use of either measure alone(3).
In most cases, core task proficiency is best predicted using ability
tests, but personality measures come into their own when predicting
other aspects of job performance which are equally important. Personality
measures are particularly useful for predicting rule breaking and disciplinary
problems(3), which are poorly predicted by measures
of IQ. They are also predictive of staff turnover(3),
absenteeism(3), and of ability to work productively
in a team(2). In general, it is particularly important
to use personality testing when selecting people for jobs requiring
teamwork or a lot of social interaction. The inclusion of a single disruptive
team member can have a dramatic negative impact on team effectiveness(2).
Some personality tests are predictive of job performance, and some are
not(5). It is important to look at what research
(if any) supports the use of a particular personality test for personnel
selection. There are several personality tests marketed in Australia
that are not supported by adequate research. In particular, personality
tests that do not contain lie detection and validity scales are unlikely
to be very useful(3). Also, it is important that
any test used contains a valid measure of dependability and/or conscientiousness,
as research has shown these constructs to be the most consistently useful
in staff selection(3). Finally, it is important
that the results of personality tests are interpreted by a psychologist
or another suitably qualified individual.
testing versus EQ testing
The concept of emotional intelligence has become very popular in recent
years. At this stage, however, there has been comparatively little research
conducted into emotional intelligence, compared to research into personality
and job performance(20). In particular, there
is disagreement about what emotional intelligence really is, whether
it is distinct from personality, and whether, in applied settings, it
can add to the prediction of job performance(20).
At this stage, if EQ tests are used, it would be prudent to use them
in conjunction with conventional ability and personality tests. It should
be noted that the CPI (a personality test) contains measures of constructs
which appear identical to some conceptions of emotional intelligence.
for the validity of the CPI and of Spectrum 260
Background to the CPI
CPI is probably the most thoroughly researched personality measure in
the world(10). It has fared well under independent
critical review, both for use in predicting behaviour in general1 and
as a tool for personnel selection(5). It is used
by the California Highway Patrol and by many other law enforcement agencies
around the world, and by at least one Victorian fire authority. The
US Army chose parts of it to adapt in the development of their own personality
measure for recruitment(3). APP have used this
test successfully for about 25 years. Spectrum 260 is a recently developed
short version of the CPI, and there is evidence that it produces largely
equivalent descriptions of individuals. The average correlation between
corresponding scales on Spectrum 260 and on the CPI is 0.946.
Research studies on the predictive validity of the CPI
many psychological tests, the CPI was specifically designed to predict
real world behaviour, and was developed accordingly(9).
The test has a high degree of predictive validity in predicting everyday
behaviour; for example, the Dominance scale predicts whether someone
will be described as ‘Behaves in an assertive fashion’ by
their peers with a predictive validity of 0.42; conversely it predicts
‘Is vulnerable to real or fancied threat, generally fearful’
with r = -0.32. These predictive validities have not been corrected
for unreliability in the criterion variable. People are often struck
by the detail, descriptiveness and accuracy of the CPI.
validity of the CPI for predicting job performance has been established
in studies looking at a wide variety of occupational groups. Examples
include police officers(11), armoured car company
employees, telephone service representatives, and managers(10).
Best estimates of the CPI’s corrected predictive validity can
be derived from meta-analytic reviews: about 0.40 for overall job performance(19,22),
and about 0.56 for problem behaviours(12). Given
the evidence that Spectrum 260 produces very similar descriptions to
the CPI(6), it can be assumed that this instrument
is also a good predictor of work performance. Although Spectrum 260
is a short version of the CPI, it is still similar in length to other
personality inventories which are widely used for personnel selection.
there is evidence that the CPI is a useful predictor of serious criminal
behaviour. The instrument discriminates between criminals and noncriminals
in general(8), and between white collar criminals
and noncriminal executives(4). It also predicts
self-reported sexual aggression amongst men who have not been convicted
of any offence(18). This research suggests that
the CPI is a useful screening tool to use when selecting individuals
for positions of trust.
A good overview of personnel selection is provided by
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(Eds.), The fifteenth mental measurements yearbook [Electronic
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Test Reviews Online website: http://www.unl.edu/buros.
Barrick, M. R., Stewart, G. L., Neubert, M. J., & Mount, M.
K. (1998). Relating member ability and personality to work-team
processes and team effectiveness. Journal of Applied Psychology,
Campbell, J. P., & Knapp, D. J. (2001). Exploring the
limits of personnel selection and classification. NJ: Lawrence
Collins, J. M., & Schmidt, F. L. (1993). Personality, integrity,
and white collar crime: A construct validity study. Personnel
Psychology, 46, 295 – 311.
Cook, M. (1998). Personnel selection: Adding value through
people (3rd ed.). NY: John Wiley & Sons.
CPP Inc. (2002). Brief technical report on the Spectrum CPI
260™ Instrument (Tech. Rep. No 2002-3). Palo Alto,
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life. Intelligence, 24, 79 – 132.
Gough, H. G. (1994). Theory, development, and interpretation of
the CPI socialization scale. Psychological Reports, 75,
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Gough, H. G., & Bradley, P. (1996). The California Psychological
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