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Business psychology: Are you making the most of it?


Psychometric testingThe psychometric testing industry has developed rapidly in the last 20 years, but how can HR professionals ensure they continue to make the most of the latest steps forward? John Hackston explains how to use business psychology to unlock the potential of your people.

Twenty years ago, psychometric testing had made it out of the classroom and although not yet in the boardroom, was starting to build a reputation in the workplace. However, only a few pioneering HR practitioners, mainly in US companies, were entirely convinced of its merits.

Two decades later, psychometric testing and psychology-based training form the backbone of how many major companies select and develop their people. The principles of psychology have spawned any number of best-selling management books, and the science of psychometric testing has evolved to a stage that it can now deliver measurable results to some of the biggest names in business.

Electronic revolution

Two key developments have ensured the rising popularity of psychometrics in the last 20 years. The most obvious is the proliferation of personal computers.

“Technology has enabled huge steps forward in tailoring the outcomes of a psychometric test.”

Ten years ago, the vast majority of psychometric testing was done with a pencil and paper. Now, the majority are conducted electronically. It may sound like a relatively minor step forward, but the impact on psychometrics has been profound. It has introduced a great degree of flexibility in the use of the tests, meaning they can now be completed remotely but still within a tightly managed process.

Perhaps more importantly though, technology has enabled huge steps forward in tailoring the outcomes of a psychometric test. Instead of delivering strings of scores that only a highly trained psychologist can interpret, computer programmes use complex scoring algorithms to generate expert reports that require less training to interpret effectively – some are actually designed for managers and candidates themselves. This has made psychometrics more accessible and cost effective, opening them up to many more organisations that were previously deterred by the complexity of the tests. It’s perhaps the key factor that has led to organisations embedding psychometrics into many HR processes as ‘human due diligence’.


The second major step forward in the last 20 years concerns the tests themselves. In their infancy, many psychometric tests were little more than IQ tests, worded in rather academic language and delivering relatively specialised data. However, as the core ‘handful’ of personality tests created by the great thinkers in the psychology field have been commercially exploited, numerous instruments have spawned – some, with less reputable credentials.

There are benefits and drawbacks of this evolution. On the plus side, the range of practical applications of tests is broader than ever before; the degree to which high quality ‘classic’ instruments like the 16PF can be tailored for particular job roles is impressive. As the industry has matured, tools and techniques have been developed that answer some of the most pressing concerns in the boardrooms of a variety of industries. How can we lessen the impact of workplace conflict? How can we make sure new recruits fit quickly into our business? How can we create a leadership team that works effectively together? How can we foster greater innovation in our business and help our people to challenge existing ways of working? How can we accurately assess the potential of our people? How can we spot a career falling off the tracks before it happens? These are all questions that psychometrics has been able to address as its grown up in the last twenty years.

The downside is that not all tests ‘do what they say on the can’, and buyers need to beware that failing to check credentials can leave them with tools that are about as predictive as the quizzes in womens’ magazines (more on this in a moment).

“Two of the most important questions you should ask any psychometric supplier are around reliability and validity.”

The best instruments have evolved to become more rooted in everyday language and given a more real-life context. Questions in ability tests now often revolve around real-life situations that people can relate to. Because of this, the results give a more realistic picture of their abilities and the data that is collected is much more accurate.

Making the most of business psychology

The psychometrics market today offers a choice of instruments, qualified consultants and companies that are capable of working alongside your people to apply psychological principles to address specific issues. So how do you make sure you make the most of what’s out there?

A healthy scepticism of freely available products (for example, open to all via the internet) will serve you well. There are companies offering cheap, simple psychometric tools, but the ‘you-get-out-what-you-put-in’ rule should be applied here. Psychometric testing is a powerful tool, requiring either training or the support of expert consultants.

Two of the most important questions you should ask any psychometric supplier are around reliability and validity. The best products available have undergone rigorous research and benchmarking to ensure they deliver accurate, consistent results. We’d advise that any supplier that stutters at the reliability and validity questions should be avoided.

Once you find a partner, you need to determine exactly what you want to get out of the process. For selection purposes, you need to know what your profile of success looks like, or how can you match against it. For any application, you need to be clear about how you intend to use the results – and ensure that you communicate this honestly and transparently to those involved in the process, upfront.

Lastly, if you’re to get the most out of any psychometric tool, it needs to be ‘part of the picture’ and not used in isolation. For example, if you’re looking to use a personality questionnaire as part of your recruitment process, use it alongside an ability test and a structured interview. The research suggests that this will give you the best results in selecting employees who will be successful. For development, use with a 360 degree feedback tool for robust insight into individual development needs, or as the basis for coaching.

Psychometrics have come a long way since the first days of OPP. They promise to be a core component of HR processes for years to come, so understanding how to get the most out of them helps business of all sizes unlock the full potential of their people.

John Hackston is a senior consultant at business psychology consultancy OPP

3 Responses

  1. On the issue of reliability, validity and cost
    I think that both these posts make some very interesting comments. There are of course issues with ipsative personality questionnaires when these only have a small number of scales, and there was much debate about this in the late 1980’s and the 1990’s. For the record, none of the major psychometric instruments used by my own organisation (OPP) are in fact ipsative.

    On the issue of reliability and validity, questionnaires like the 16PF and the MBTI are put through their paces in a range of cultural contexts before they are used. They are revalidated and re-adapted for each language in which they are developed. They are tested against their accuracy by examining whether or not their results measure up to what happens in real life. If a psychometric test predicts someone will do better in a leadership role, a longitudinal study can be conducted to see if that prediction is correct.

    In saying this, I am certainly not discounting the interview (although “traditional” issues are prone to all sorts of issues); all the research suggests that people decisions based on a combination of psychometric outputs and a structured interview will almost always prove to be more successful in the long run

    On the issue of cost, this kind of testing can be incredibly cost-effective, especially when compared to other methods. Some tests cost as little as £16, compared with the cost and time of conducting an interview.

  2. Validity is not always the issue for tests….
    Whenever psychometric tests are brought up as a way of “Measuring People”, I always come back to the same basic comment.
    Firstly – seperate TESTS from PROFILES.
    Tests can be measured (Normative)- one person against another. Profiles cannot – they are by nature IPSITIVE. Validity for these is therefore NOT an issue and to try time and time again to make them FAIL the validity test only goes to prove that HR and management are missing the point.
    The majority of Ipsitive profiles ONLY raise questions for a discussion between two or more parties. The sharing of this information opens doors for managers and staff to BUILD upon peoples strengths BY THEIR OWN ADMISSION and to be able to support growth where a “WEAKNESS” is agreed.(In objective terms this only means room to improve)
    Management and HR can make very good use of these tools by first learning to communicate in an OBJECTIVE manner. Its about matching peoples natural talents to the job role. When these are in tune performance improves. The easiest mistake to make is to let an employee assume that they are not good enough in some way for the job, this is NOT what Profiles should be used for.
    When you interview a potential candidate it is up to you to describe the job in detail including HOW it is done well, and then test skills against a persons ability and potential to ensure there is a fit, and then use profiling to see how this can be used to improve performance for both parties.
    We all know that communication is the single biggest challenge for nearly all companies, but so few have taken the time to change their approach.

  3. An alternative perspective
    I have yet to see a psychological test that has been proven to be both reliable and valid in a range of cultural contexts. Most tests have not actually been tested by truly rigorous research. Most of the research on tests has been carried out by folk who are very keen to “prove” that they work. Real research is carried out by folk who are very keen to prove that the tests do not work. (That’s the basis of science – anything else is faith.) When tested hard by social psychologists and sociologists, rather than by psychologists, many tests have simply failed to be reliable and valid.
    When I find the test that will tell me more than a proper Behavioural Event Interview, then I might become more interested.
    Don’t get me wrong, I have used psychological tests in a variety of jobs since the mid-80’s, (when I spent a lot of money on Meredith B before he was famous.) However, I am allergic to psychologists telling me that I need to spend lots of money on psychologists for their advice.

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