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Psychological tests and assessments have a long history, rooted in results and scientific study. First used by the military during World War II, psychological tests and assessments were quickly adopted by leading corporations to match the right candidate to a specific job.

What is psychological testing?

Psychological tests and inventories are systematic procedures for observing and describing individual differences. Properly administered, they can be used as a means of collecting meaningful information about an individual. Psychological tests are not perfect predictors of performance; however, they are the best and fairest tools available today. Organizations such as the American Educational Research Association (AERA), the EEOC, and the Society for Industrial and Organizational Psychology help assessors develop the best psychological tests and subsequently, the best assessments. Psychological testing can help improve decision-making when designed and implemented correctly, while providing substantial gains and utility to organizations.ⁱ

How does psychological testing help decision makers?

A psychological test has three defining characteristics:

It is a sample of behavior.
The sample is obtained under standardized conditions.
There are established ways for understanding the behavior sample in quantitative or numerical terms.

Because a psychological test has the ability to convert a specified behavior into a number, these numbers or results can then be used to help make decisions about the individual. For this number to have meaning, its relationship to other things — such as a job performance criterion — must be established.

A historical perspective

Psychological testing has a long history, dating back more than 3,000 years, when Chinese civil servant applicants were required to take physical ability and written mental ability tests. The systematic development of psychological testing is a relatively more recent phenomenon, although it is still more than 100 years old.

As early as the late nineteenth century, scientists such as Francis Galton, James Catell, and Hermann Ebbinghaus began to quantify and measure human characteristics. Only a few years later, Alfred Binet produced the first widely used intelligence scale. Since then, the scientific process of quantifying behaviors has evolved into the study of psychological testing and assessment.

What is psychological assessment?

Psychological tests are primarily designed to assess individual differences and make normative or comparative statements and evaluations about individuals. Thus, psychological testing tends to be measurement-oriented. Psychological assessment, on the other hand, focuses on an in-depth description of the individual, usually on the basis of scores or performance on a multitude of tests. Therefore, psychological assessment tends to be more problem-oriented.

A psychological assessment can be thought of as a process that takes an in-depth look at an individual. The goal of psychological assessment is to better understand what the individual is like. Specifically, it is a measurement and description of an individual's personality, behavior patterns, and intellectual characteristics. A psychological assessment can help develop a picture about a person. In the context of organizations, the assessment can be used to predict how the individual may perform in the organization by evaluating individual characteristics in relation to a specific criterion. This information can then be used to make decisions. From a developmental or training perspective, it can also identify strengths and weakness-the first step in designing an individual development program.

There are three intertwined steps in psychological assessment:

First, the problem must be identified (e.g., What question needs to be answered? What are the company's needs?). The problem could be whether a promotion candidate can successfully perform at a mid-level manager position. The definition of "successful" may vary from one organization to another.
The second step is data collection. This step determines what kind of data to collect and how to collect it. Psychological tests and inventories are the primary methods of collecting such data in organizational settings. Psychological assessment is a process that uses psychological tests as a method to collect information about an individual's knowledge, skills, abilities, attitudes, and other characteristics.
The third step is interpreting the data or finding the solution to the problem. Making inferences from the results of psychological tests is a well-established and well-researched area. Establishing the validity of test scores is explained in more detail later in this document. To complete the assessment, feedback, or the results of the assessment, are given to the candidate and/or the requesting manager.

The use of psychological assessment

Psychological assessments have expanded so much over the years that they can now measure aptitudes and achievement, personality, and interests. They are used in several fields, including industry, schools, clinical settings, and the military. In each context psychological assessments can be used to make better decisions.

Psychological assessments have been used in business since the 1930s. World War II psychologists were hired by the military to determine the appropriateness of military personnel for specific duties. When the war ended, many psychologists were hired by large corporations to help select managers and determine their developmental and training needs.

Psychological assessments are widely used in both the private and public sector. Because it is a dynamic process, psychological assessments are greatly influenced by the context in which they occur. Information gathered by psychological assessments may be used to predict how an individual will perform in different work environments and contexts. Psychological assessments may also be used for a variety of purposes including final candidate selection, promotion, assessing training and developmental needs, career counseling, and succession planning. When psychological assessments are used for administrative purposes, the assumption is that some important aspect of behavior on the job can be predicted from assessment outcomes. Psychological assessment is useful to management because it provides a picture of the individual's knowledge, skills, and abilities, values and motivation, and preferred working environment.

Organizations can directly benefit from using scores or outcomes from psychological assessments for decision-making in various personnel functions. Personnel functions can be thought of as problems that psychological assessment can be used to solve. Examples of personnel problems include: Will this applicant be successful on the job? Where should this candidate be placed? Who should be promoted? What are the individual's training needs?

For selection, decision makers must predict whether or not a job applicant will be able to successfully perform a job. To do this as accurately as possible, two steps are needed: measurement and prediction. Psychological assessment does both. It measures how well an individual does on a job-related test, and then because test scores have previously been validated, the scores of the assessment can be used to predict whether the applicant will be able to successfully perform the job. Psychological assessment can determine if a person coming into an organization can perform the tasks required. In addition, psychological assessment can determine how well the person will fit into the organization (person-organization fit). Information on how well the applicant will be able to perform the tasks required by the job, and how well they will fit into the organization can benefit the organization by reducing turnover, and increasing productivity and job satisfaction.

Similarly, psychological assessment can help with placement once an applicant has been hired. In order to find the best person-job fit, information on the person can be compared with the characteristics needed for the job. By assessing person-job fit, an organization can ensure that its human capital is invested in a way that most benefits the organization.

Another major area psychological assessments can benefit organizations is through the identification of training and development needs. Psychological assessment can be designed to measure an individual's strengths and weaknesses related to successful job performance. Identification of strengths and weaknesses can provide information for training and development programs. Training is a multi-billion dollar industry.ⁱⁱ The ability to pinpoint specific individual training needs will save an organization money in training.

In addition to the previously mentioned personnel functions, psychological assessments can be used for competency-based and skill-based compensation and promotions, and as criterion data in the evaluation of organizational programs and interventions.

Validity-Determining the quality or soundness of psychological assessment

There are obviously many uses for psychological assessments, but how do we know how good the assessment really is? There are two major psychometric properties that indicate a good psychological assessment: reliability and validity. Reliability refers to the consistency of scores obtained from an assessment. Because an assessment (or test) is usually given only once to an individual, it must be as accurate as possible. The more reliable the assessment, the more likely it will be a true reflection of the individual. Validity refers to the appropriateness, meaningfulness, and usefulness of the inferences made from test scores. Validity is the scientific way of verifying that the specific use of the results of a psychological assessment is conceptually sound. Thus, validity is arguably the primary means of evaluating the quality or soundness of a psychological assessment.

Validity studies demonstrate whether the conclusions made in psychological assessments are accurate. This is accomplished by finding the empirical relationship between performance on the psychological assessment and performance on some criterion of interest-usually job performance, such as performance ratings, advancement, or turnover. If the psychological assessment (predictor) is any good, then one would expect better scores on the predictor to be associated with higher scores on the criterion (e.g., job performance). This established association between the psychological assessment and the criterion of interest supports the use of the assessment for those purposes.

Although many psychological assessments are done by private companies that do not publish their findings, there is support in the literature for the use of psychological assessment in organizations. Probably the most important research question is whether or not the method is valid. Does using psychological assessments really improve selection and development decisions? Researchers have demonstrated the accuracy of psychological assessments over the past 50 years.ⁱⁱⁱ

Results generally show positive relationships between ratings based on psychological assessment reports and later supervisor performance ratings of the incumbent.^iv In almost all research studies, psychological assessment as a predictor was successfully tied to the criteria of interest. psychological assessments are related to job performance ratings^v , research indicates that the method is a useful and valid scientific tool for organizations to employ.

References

i. Black, J. (2000). Personality testing and police selection: Utility of the 'Big Five.' New Zealand Journal of Psychology, 29, 2-9.; Goodstein, L. D., & Lanyon, R. I. (1999). Applications of personality assessment to the workplace: A review. Journal of Business and Psychology, 13, 291-322. Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124, 262-274.

ii. Industry report 2000. (2000). Training, 37 (10), 45-48.

iii. DeNelsky, G. Y., & McKee, M. G. (1969). Prediction of job performance from assessment reports: Use of a modified Q-sort technique to expand predictor and criterion variance. Journal of Applied Psychology, 53, 439-445.; Hilton, A. C., Bolin, S. F., Parker, J. W., Jr., Taylor, E. K., & Walker, W. B. (1955). The validity of personnel assessments by professional psychologists. Journal of Applied Psychology, 39, 287-293.; Otis, J. L., Campbell, J. T., & Prien, E. P. (1962). Assessment of higher-level personnel: VII. The nature of assessments. Personnel Psychology, 15, 441-446.; Trankel, A. (1959). The psychologists as an instrument of prediction. Journal of Applied Psychology, 43, 170-175.

iv. Ryan, A. M.., & Sackett, P. R. (1987). A survey of individual assessment practices by I/O psychologists. Personnel Psychology, 40, 455-488.

v. Hansen, C. P., & Conrad, K. A. (Eds.). (1991). A handbook of psychological assessments in business. New York: Quorum Books.