Assessments

Criteria for Selecting and Evaluating Assessment Methods: A Legal and Fiduciary Responsibility for Leaders 

By Terri Baumgartner Ph.D., SPHR  

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In our last article, titled, “Assessment Strategies and Standards: Ten Best Practices for Companies,” posted February 8, 2022, we discussed the following best practice: Ensure the validity and reliability of assessments used for employment decisions.

We noted the following about this best practice:

There are thousands of tests/assessments on the market today, and almost every test developer/publisher will say that their test is valid and reliable. Companies need to conduct their own due diligence to ensure that these claims are true. When an assessment is used as the basis for any employment decision, their use is governed by the Uniform Guidelines on Employee Selection Procedures (1978). Employment decisions include but are not limited to hiring, promotion, demotion, membership (for example, in a labor organization), referral, retention, and licensing and certification, to the extent that licensing and certification may be covered by Federal equal employment opportunity law. Other selection decisions, such as selection for training or transfer, may also be considered employment decisions if they lead to any of the decisions listed above. Employers should ensure that employment tests and other selection procedures are properly validated for the positions and purposes for which they are used. The test or selection procedure must be job-related and its results appropriate for the employer’s purpose. While a test vendor’s documentation supporting the validity of a test may be helpful, the employer is still responsible for ensuring that its tests are valid under the Uniform Guidelines on Employee Selection Procedures (1978). These guidelines are applied by the Equal Employment Opportunity Commission in the enforcement of Title VII of the Civil Rights Act of 1964, as amended by the Equal Employment Opportunity Act of 1972.

Every HR practitioner and for that matter, leaders in general should understand this requirement. It is their legal responsibility, and even fiduciary responsibility, because should the company be sued for invalid, discriminatory selection practices, the financial consequences can be severe enough to put a company out of business. As such, this article offers additional input to ensure your company makes the right assessment decisions.

Whenever you are choosing the right assessment methods to use for employment-related decisions, the following criteria should be considered: validity, adverse impact, cost, applicant reactions.

An excellent summary of validity is contained in SHRM’s (Society of Human Resource Management’s) publication titled, “Selection Assessment Methods: A Guide to Implementing Formal Assessments to Build a High-Quality Workforce.” What the author notes about validity follow:

“The most important consideration in evaluating an assessment method is its validity. For the present purposes, validity refers to whether the assessment method provides useful information about how effectively an employee will actually perform once she or he is hired for a job. Validity is the most important factor in considering whether or not to use an assessment method because an assessment that does not accurately identify who will perform effectively on a job has no value to the organization.”

The Uniform Guidelines on Employee Selection Procedures note that for the purposes of satisfying the guidelines, users may rely upon criterion-related validity studies, content validity studies, or construct validity studies, in accordance with the standards set forth in the guidelines. New strategies for showing the validity of selection procedures are also evaluated as they become accepted by the psychological profession.

Evidence of the validity of a test or other selection procedure by a criterion-related validity study should consist of empirical data demonstrating that the selection procedure is predictive of or significantly correlated with important elements of job performance. Evidence of the validity of a test or other selection procedure by a content validity study should consist of data showing that the content of the selection procedure is representative of important aspects of performance on the job for which the candidates are to be evaluated. Evidence of the validity of a test or other selection procedure through a construct validity study should consist of data showing that the procedure measures the degree to which candidates have identifiable characteristics which have been determined to be important in successful performance in the job for which the candidates are to be evaluated.

Remember, while test publishers will generally have documentation related to validity in general, the employer is still responsible for ensuring that the tests/assessments it uses are valid under the Uniform Guidelines on Employee Selection Procedures (1978).

Adverse Impact

Discrimination can occur in two general ways. First, disparate or unequal treatment occurs when a selection procedure—even though validated against job performance in accordance with these guidelines—is imposed upon members of a race, sex, or ethnic group where other employees, applicants, or members have not been subjected to that standard. Disparate treatment occurs where members of a race, sex, or ethnic group have been denied the same employment, promotion, membership, or other employment opportunities as having been available to other employees or applicants.

Adverse impact is the second category of discrimination discussed in relation to assessments used for hiring or promotion. Adverse impact, typically evaluated through the” four-fifths rule,” is the extent to which protected group members score lower on the assessment than majority group members. When a selection rate for any race, sex, or ethnic group which is less than four-fifths (4⁄5) (or eighty percent) of the rate for the group with the highest rate, it will generally be regarded by the Federal enforcement agencies as evidence of adverse impact, while a greater than four-fifths rate will generally not be regarded by Federal enforcement agencies as evidence of adverse impact.

A procedure having an adverse impact constitutes discrimination unless justified. The use of any selection procedure which has an adverse impact on the hiring, promotion, or other employment or membership opportunities of members of any race, sex, or ethnic group will be considered to be discriminatory and inconsistent with these guidelines unless the procedure has been validated in accordance with these guidelines. Where two or more selection procedures are available which serve the user’s legitimate interest in efficient and trustworthy workmanship, and which are substantially equally valid for a given purpose, the user should use the procedure which has been demonstrated to have the lesser adverse impact.

 

Cost

Of course, the cost to develop and administer an assessment is always a consideration for organizations. However, cost consideration should never take precedence over validity and lack of adverse impact, and the unfortunate truth is that it often does. Organizations will choose to use a low cost per person assessment for making hiring decisions, trusting the test publisher’s claims that the test is “valid.”

 

Applicant Reactions

In today’s job market, organizations do not want to put applicants off by the assessments they use. Again, though, do not place applicant reactions before validity in making choices of which assessments to use. There are many very appealing, highly interactive, even virtual reality-based assessment solutions on the market today. If they lack validity and are discriminatory, then move on to better choices.

 

Summary

In SHRM’s (Society of Human Resource Management’s) publication titled, “Selection Assessment Methods: A Guide to Implementing Formal Assessments to Build a High-Quality Workforce,” the author provides a summary table showing how various assessment methods compare on these four criteria. 

Organizations will often use a combination of these assessment methods to make employment decisions for various jobs. The particular combinations used depend upon the requirements of the jobs/roles in question, of course. Again, just as when an organization employs a single assessment to make an employment decision for a job in question, and needs to understand the validity and adverse impact evidence for this assessment, so too does it need to understand such evidence in cases where multiple assessments are combined in unique ways to make employment decisions.

While substantiating the assessment choices your organization makes through examining validity and adverse impact is not difficult to do, if you do not have the internal expertise to do it well, then enlist support externally. The assessments your organization uses should be the right strategic choices and should predict those who will make the strongest contributions to the roles in question. The assessment choices should also mitigate the organization’s exposure and risk to any claims of adverse impact.