Companies' Use of Psychometric Tests for Recruitment: A Review of the Literature

Introduction

This paper surveys the literature on the use of psychometric testing by employers as part of the recruitment process and considers the general usage by different types of businesses. Companies spend high amount of money each year on psychometric test which measures personality type, learning styles and personal preferences of individuals. Since the 1980's business in the UK have been making the use of psychometric test as part of the selection process for job vacancies. Over the years the usage has increased to a level where 80% of the Fortune 500 companies in the USA and by over 75% of the Times Top 100 companies in the UK are using some kind of psychometric testing (PSYCHOMETRIC-SUCCESS, 2009). However the benefits and drawbacks of using psychometric testing vary from business to business and sometimes even according to the demographics of the location where the test are conducted.

Types of psychometric testing

A good psychometric test features reliability, validity, discriminating and NORMs. (Kline, 1992). The significance of Psychometric Testing is able to indicate a reason why Psychometric Testing is widely used, as Kline (1992) suggests that, the efficiency of personnel selection and appraisal will go up as the efficiency of Psychometric test goes up, the necessity of appraisal may disappear as the testing is improved. It could be argued that psychometric testing can be broadly defined into two main category's including intelligence (aptitude) test and personality test.

General intelligence tests include information processing and organisation of knowledge. The intelligence test is a way to assist employers to identify individual capacity, such as verbal, numerical and spatial etc. However Ceci and Williams (2000) note that intelligence test is determined by the context and can't reflect capacity of intelligence. Therefore it could be argued that intelligence test is a good and easy method to help company select suitable employees. But, intelligence test is subjective which cannot reflect their potential capabilities.

Personality test is considered to be very important and therefor commonly used. According to Houghton Mifflin Company (2000) personality test involves a standardized series of questions or tasks, and it uses to describe or evaluate a subject's personality characteristics. Torrington et al. (2002) found that personality tests were a basis for predicting behaviour therefor personality questionnaires aim to infer relatively enduring traits or individual characteristics

The validation of this process has been challenged by Torrington et al. (2005) who states that tests may not be fair as they may have a social, sexual or racial bias in the questions and scoring system.

From these points it could be argued that, psychometric tests have high predictive validity the reason that managers need from their grade to predict their future work performance. However, there are still some limits, like hard to predict correct and it is also a not fairly test for everyone for people from different countries and religions might have different values.

Although it could be argued that these test are not 100% full proof there are specific methods which are used to construct these types of test. In terms of Test construction, both Maximal Intellectual performance and Typical Behaviour will imply the following 5 main methods, Searle (2003:145).

* Criterion Keyed method

* Factor-Analytic Method

* Item-Analytic Method

* Thurstone Scale method

* Guttman Scales Method:

Details of above mentioned can be found in Appendix B

Test scoring

To assess the results from tests, Searle suggest calculating error levels by systematic and random errors, also, IRT error assessment which focuses on why a group of test-takers are performing better or less well compared to the others. She also introduces 3 approaches in Interpretation of Scores, Searle (2003:156), namely, Criterion-related scoring, which is about identifying obtained score, Domain referenced scoring which is more likely for Aptitude test and Norm-Refenced Scoring is for ability test.

To give results for the tests, only people registered and accredited by British Psychological Society (BPS) are permitted and qualified to do so. Also, the BPS can guide and advise people in terms of results based on their criteria.

Implementations and benefits

Psychometric testing like psychological tests of ability and personality has long been employed in various sectors for