Employee assessment tools – friend or foe?

by 30 Oct 2008

Buying in assessment tools such as psychometric tests and organisational surveys appears to be a growing trend in Australian human resource management. Fiona Marsden looks at how organisations are using these tools in recruitment, staff development and training.

HR management is a high-stakes exercise, with implications for organisational productivity, staff turnover and workforce engagement. To manage these risks, more than 40 per cent of large companies in the US are spending $400 million per year on psychometric tests (source: Human Resource Management in Australia: Helen De Cieri and Robin Kramar).

Comparable figures are hard to come by in Australia, but anecdotal evidence suggests that an increasing number of organisations here are following suit and using psychologically-based assessment tools as an adjunct to traditional tools such as face-to-face interviews, reference checks and informal feedback between managers and direct reports.

The great Aussie barbeque

Ostensibly, assessment tools for individual employees are designed to measure traits such as stress tolerance, teamwork potential and leadership ability. They can also be used to help managers choose candidates who are the best “fit” for the organisation’s culture.

This practice has attracted its share of criticism. Professor Robert Spillane of the Macquarie Graduate School of Management believes the ultimate test of an employee’s worth should lie in their performance. He says that, while certain tools may help predict how someone will behave in a particular situation, they won’t help predict how they will perform.

Nevertheless, says Spillane, Australian organisations tend to place a high value on personality and getting on with one another, perhaps because of our national values. “It’s said that in the US the dominant metaphor for management is the football team. In Germany it’s the machine, in Asia it’s the family and in Australia, it’s the barbecue.”

There may well be some truth in the barbecue metaphor. However, it’s fair to say that many organisations regard the use of psychologically based assessments as only one aspect of a wide-ranging recruitment and development process, rather than playing the dominant role.

The right person for the job

Shelley Cussen is group manager of human resources at SP AusNet. Employing 1500 staff, the company owns and manages the high-voltage electricity transmission system across Victoria, the electricity distribution system (poles and wires) in the east, and the gas distribution system in the west.

“Assessment tools are a useful part of our overall approach to recruitment,” says Cussen. “Each role has a ‘success profile’ listing the key competencies we believe a candidate needs to do the job well.” These include technical proficiencies as well as personal attributes such as leadership skills, interpersonal skills or the ability to execute strategic direction.

Depending on the competencies required for a particular role, the company chooses a mix of tools that may include cognitive testing, psychometric testing (Saville’s Wave questionnaire is a frequent choice), background checks and/or screening through assessment centres, where candidates are invited in for a day to participate in group activities to see how they handle certain situations.

Cussen’s team includes an organisational psychologist with a background in employee assessment to help the organisation purchase the most appropriate tools and deploy them effectively for each type of role.

Cussen stresses that, while assessment tools may help SP AusNet find the best person for the job, they act as a supplement to the interview process. “They’re not the sole basis on which we make decisions.”

Investing in development

According to Cussen, assessment tools also play a valuable role in SP AusNet’s personal and organisational development programs.

“We run leadership programs for middle managers and top level executives,” she says. “In both programs, we use tools like emotional intelligence tests, values-based tests and 360-degree leadership surveys to help people become more aware of their strengths, and work on ways to address their weaknesses.”

Cussen says the response from program participants is encouraging. “They see it as a real positive that the company is investing in their development. They also appreciate knowing that we follow through. We link the results for each manager and executive to their professional and personal development goals, and to their performance agreements.”

At an organisational level, SP AusNet also has an in-house surveying tool which runs customer surveys, along with a “team pulse” survey and a culture and engagement survey. Results are fed into the company’s strategic goals.

Keeping good people

Cussen believes that using employee assessment tools as part of a broader recruitment and development strategy is helping reduce staff turnover. “Our overall staff turnover is 5 per cent lower than the industry average,” she says. The turnover rate for the company’s apprentices and trainees is also low, at 3 per cent. “We’re proud of the fact that we’re retaining so many good people in our business.”

High-stakes training

It’s one thing to use assessment tools in staff recruitment and general professional development, but what about ongoing training in specific technical proficiencies needed to do a job safely and well?

Harley Doughty is Training Superintendent for south-east Australia and New Zealand at Orica Mining Services, which manufactures and distributes blasting products for the mining, quarrying and construction industries, along with providing technical support.

“Many of the people we train need proficiency in complex and potentially hazardous tasks like handling chemicals and shot firing,” he says.

“Some are also responsible for issuing clearance authorisations, which give the company permission to work in a particular area. If someone is injured or killed on a mine site and it’s alleged that a particular employee may be involved, the company needs to be able to demonstrate that the employee was competent.”

Orica runs a Licence to Operate program which includes a core set of training competencies for field and technical staff. While the practical aspects of these competencies must be assessed in person, Orica began automating the theoretical component in 2007, using the Questionmark Perception system. Developed in the UK for education and training professionals, the system includes authoring, scheduling, delivery, assessment and report generation functions.

Cost-benefit

At a cost of about $70,000 plus minor modifications, the system is the company’s first big foray into online assessment. It’s a sizeable outlay, but, says Doughty, the investment is already paying off. “In our business case, we predicted that using Questionmark would save the company around $300,000,” he says. “So far, things are running pretty true to case. We have around 90 mine sites across Australia, Papua New Guinea and New Zealand. Now that staff can stay onsite and do some of their training online, we’re saving a lot on travel costs.”

With 22 different question types, Questionmark enables Orica to take participants through a detailed learning process. There is also a randomisation function so that no two assessments are the same. “This way, when someone passes or fails, we can be sure it’s on their own merit,” says Doughty.

Participating employees are providing positive feedback. “Previous forms of delivery relied on rote recall, whereas with this system we can structure the questions to be context-specific and make staff think hard about the application of their knowledge,” says Doughty. “If they pass, they feel that they’ve well and truly demonstrated their competency. It’s not just a case of tick-and-click.”

The system has foreign language capabilities, so it’s likely the company will expand online assessment to its sites in locations such as south-east Asia. Having said this, Doughty points out that online assessment isn’t a complete substitute for traditional training methods. “As a registered training organisation, we’re required to deliver assessments in a range of ways to suit the learner and the competency being tested,” he says. “We’ll continue using Questionmark in combination with tools like classroom instruction.”