Psychometric Assessment: A Valuable Business Tool Third

Third Annual OPG SurveyDecember 2020

www.theopg.co.uk

Psychometric Assessment: A Valuable Business Tool Third Annual OPG Survey December 2020

IntroductionThe third annual survey on Psychometric Assessment took place in October 2020. This year we received over 100 responses. Most of the responses came from director level participants across Human Resources and general management.

The bigger sample size has meant that we have an even greater insight into how organisations view and use psychometric assessment than in previous years.

Thank you to everybody who participated in the survey.

SampleThe survey of 113 respondents included 48 HR leaders and 37 non-HR board level respondents. The remaining respondents included operational and finance leaders. In this study psychometric assessment refers to personality assessment, work sample tests and ability testing.

IndexDoes your organisation use psychometric assessment?

2

Who in your organisation is assessed? 3

Recruitment and Learning & Development are popular uses

4

Do you use 360 degree feedback? 5

High stakes assessment/Graduate selection

6

When recruiting graduates do you use personality psychometric assessment?

When recruiting graduates do you use ability testing?

7

Which of the following psychometric assessments, if any, do you use?

8

Do you ever engage business psychologists/leadership consultants for executive/leadership assessment/appraisals?

9

Do you use consultants to write bespoke feedback reports?

10

On a scale of 1 to 5 (1 being unhelpful) has psychometric assessment helped to improve your people decision-making?

11

Conclusions 12

50% of organisations surveyed use psychometric assessment with recruitment and selection and 39% use psychometric assessment to support learning & development. Similarly, to last year, just 10% use psychometric assessment for ‘high stakes’ assessment such as restructuring although 16% do use it as part of succession planning projects.

The main change from last years survey is that the dominance of a few psychometric assessment tools such as the OPQ32 from SHL and Hogan has become much more fragmented. This may be because of the bigger sample size in this year’s survey.

This paper delves deeper into the data.

This year over 32% of respondents represented larger organisations who employ more than 1,000 employees with a similar percentage (35%) representing businesses with less than 100 employees. The remainder (33%) represented organisations who might be described as being medium sized.

1

3rd Annual OPG Survey, 2020

Figure 1

0 10 20 30 40 50 60 70 80 90 100%

Third/Charity Sector

Professional Services

Public Sector

Supply Chain

Financial Services

Construction and Facilities

Other

Industrials

Life Sciences

Retail

In terms of sectors, organisations surveyed were well spread out as the chart above shows.

Which sector do you work in?

>1,000 Employees

<100 Employees

Medium Sized

In this study psychometric assessment refers to personality assessment, ability testing and work sample tests such as Situational Judgement Tests, which have been designed by experts in occupational psychology.

The survey illustrates that opinion around psychometric assessment is evenly split between those who use it (50%), those who do not use it (44%) with the remainder being unsure as to whether their organisation uses it.

Figure 2

2

Does your organisation use psychometric assessment?

“Psychometric Assessment is valued as a business tool.”

This year we see that the medium and larger sized organisations use assessment in greater proportion than organisations who are smaller. We can hypothesise as to why this is the case but almost certainly knowledge and resources are typical explanations for this. A qualitative review of respondents’ surveys indicated this.

0 10 20 30 40 50 60 70 80 90 100%

No

Yes

Don’t know

Prefer not to say


3

“Psychometric Assessment is used at every level.”

Who in your organisation is assessed?

Many organisations associate psychometric assessment with assessing leadership, management, and graduate talent. However, the survey indicates that 19% use psychometric assessment at every level of staff.

This illustrates the utility psychometric assessment can provide. However, traditional leadership assessment, management assessment and assessment at supervisor level are all considered valuable by respondents.

Figure 3

0 10 20 30 40 50 60 70 80 90 100%

Supervisors

All staff

Other

Strategic Leadership

Senior Management

Managers


50% of respondents use psychometric assessment as part of their recruitment & selection strategy with 39% using assessment for learning & development. This includes its use with executive coaching as an important personal development planning activity. Less popular uses include restructuring (10%) and, surprisingly, succession planning (16%). This is surprising given the economic situation we are in and the pressing need many organisations have to restructure. It will be interesting to note whether the uptake of ‘high stakes’ assessment for restructuring will go up by the time we next survey in 2021.

Recruitment and Learning & Development are popular uses

4


Figure 4

0 10 20 30 40 50 60 70 80 90 100%

Recruitment & Selection

Learning & Development

Restructuring

Succession Planning

Do you use 360 degree feedback?

However, the majority of respondents do not use 360-degree assessment very often. This may reflect the fact that using 360 degree feedback is resource intensive both in terms of time and to a lesser extent cost.

Future surveys will investigate this in more detail given the benefits 360 degree feedback provides for organisations who use it as 360 degree feedback is considered the cornerstone of leadership assessment and development programmes. This is because it provides real data around an individual’s leadership performance with their team.

Whilst not strictly a psychometric tool, 360 degree feedback is a popular assessment methodology with 64% of surveyed leaders using 360 degree feedback at least occasionally. 360 assessment is a multi rater feedback assessment which elicits the ratings of managers, colleagues and reports as well as customers and other stakeholders in some circumstances. It is used widely for leadership and management development.

5

Figure 5

0 10 20 30 40 50 60 70 80 90 100%

Annually

Frequently

Less than annually

Never


“360-degree feedback remains a Learning & Development tool of choice.”

Psychometric assessment has long been associated with selection and to a lesser extent, learning & development. However, the survey shows that some organisations use psychometric assessment as part of restructuring and succession planning. The relatively low uptake for these applications may be because organisations do not perceive psychometric assessment as being a strategic activity which can support restructuring and succession planning.

In future surveys, we will explore this in greater detail. Suffice to say that organisations who do use psychometric assessment for restructuring and succession planning benefit from the objectivity assessment provides. In particular, data around an individual’s potential and motivation. This information is particularly useful at looking at future job and organisational fit because past attainment is not always a predictor of future capability.

One area where psychometric assessment has traditionally been used is for graduate selection. Yet surprisingly only 38% of respondents use personality assessment as part of the recruitment and selection process for graduates. However, for 38% of respondents they do not recruit graduates at all. 64% of those surveyed do use ability testing as part of graduate recruitment reflecting concerns that degree qualifications are not always a reliable guide to a candidate’s cognitive ability.

Assessment centres remains the ‘gold standard’ for graduate recruitment and selection and with new assessment technology it is becoming increasingly cost effective to use psychometric assessment as part of selection for graduates. This may include personality assessment and ability testing as well as business simulations and work sample tests. In future surveys we will investigate why some organisations do not use assessment for graduates despite its proven utility in identifying high potential candidates. Moreover, assessment also ensures fairness and removes bias from the selection process. For example, many organisations insist on a 2:1 degree or discriminate based on the academic institution the candidate attained their degree from.

High stakes assessment

Graduate selection

6


When recruiting graduates do you use personality psychometric assessment?

When recruiting graduates do you use ability testing?

7


Figure 6

Figure 7

0

0

10

10

20

20

30

30

40

40

50

50

60

60

70

70

80

80

90

90

100%

100%

Always

Always

Not applicable

Not applicable

Never

Never

Sometimes

Sometimes

Usually

Usually

“No one psychometric brand dominates.”

In future surveys we will investigate what makes an organisation choose a particular assessment tool.

However, the data shows that the majority of clients choose tools which have a high level of validity and approval from The British Psychological Society (BPS). These tools require BPS accreditation to administer and this may be a barrier to take up for some. The vast choice of psychometric assessment tools on the market suggest that the market is fragmented.

In keeping with previous surveys no one psychometric assessment test dominates the market. OPQ32r from SHL and the Hogan suite remain the leading, quality assessment tools with Wave, Thomas and DISC being popular also. MBTI and Insights are popular development tools.

8

Figure 8

0 10 20 30 40 50 60 70 80 90 100%

16PF

MBTI

Talent Q

Insights Discovery

Thomas Profiling or DISC

Other

OPQ32

Hogan Assessments

Saville Wave


Which of the following psychometric assessments, if any, do you use?

In our study we found that 38% of respondents engage with consultants for psychometric assessment, especially at leadership and management level. Indeed, an analysis of the consulting market has identified leadership consultancy as being a fast-growing segment of the Human Capital consulting market reflecting the desire of organisations to get the most from assessment. The remaining respondents either have in house expertise or do not use psychometric assessment.

We looked at how clients administer and utilise psychometric assessment. As discussed, earlier quality psychometric assessments have to be administered by BPS qualified experts. Consequently, many organisations engage with consultants to administer and feedback assessments..

9

Figure 9

0 10 20 30 40 50 60 70 80 90 100%

No

Yes

Prefer not to say


“Consultant expertise is valued by many.”

Do you ever engage business psychologists/ leadership consultants for executive/leadership assessment/appraisals?

“Bespoke trumps automation.”

Do you use consultants to write bespoke feedback reports?

Some years ago, psychometric assessment became automated with online administration and the generation of instant automated reports. Automated reports tend to be generic rather than bespoke around the reason and organisation for which it is written.

It is small wonder, therefore, that 60% of respondents use bespoke consultant prepared reports for at least part of the time. Such reports add value especially when fed back by a qualified assessor/consultant because the data can be contextualised and fed back to the candidate in order to understand and report on their views and to enable the data to be validated with the candidate. Bespoke reports are designed around the candidate, organisation, and purpose of the psychometric assessment.

10


Figure 10

0 10 20 30 40 50 60 70 80 90 100%

Rarely

Never, we use automated reports

Not applicable

Yes, always

Often

Sometimes

Reasons sighted for not utilising psychometric assessment include scepticism around their value and efficacy. This is despite various validity and academic studies proving their utility. 81% of those surveyed value assessments whilst the majority of the rest do not use assessment at this time. These findings are consistent with previous years’ surveys.

11


Figure 11

0 10 20 30 40 50 60 70 80 90 100%

3

4

5

1

2

On a scale of 1 to 5 (1 being unhelpful) has psychometric assessment helped to improve your people decision-making?

“The majority of organisations value psychometric assessment.”

12

Conclusions

Yet, despite this, a minority of respondents have no interest or faith in psychometric assessment at all. We can speculate as to why, but a review of the individual survey responses highlights a self-confessed lack of knowledge around their utility as being the principle reason.

Psychometric assessment, personality, and ability testing, is widely accepted to be a valid and an important business tool in helping organisations to understand capability and potential as well as organisational and job fit.

Academic research supports the hypothesis that psychometric assessment works with studies from Bartram (2000 and 2004) and the famous Schmidt and Hunter (1998) study into selection methods being examples.

Compared to last year’s survey it appears that those surveyed use a variety of psychometric assessment and this represents a significant divergence from last year’s survey where over 30% of respondents used OPQ32. The response to the remainder of the survey is remarkably consistent year on year although there is greater detail this year.


However, a review of survey data highlights:

• That the majority of respondents see psychometric assessment as being a valid and useful tool.

• Despite the obvious value in testing cognitive ability, not all users of psychometric assessment use ability tests.

• Leadership assessment supported by consultants is valued. It is also useful as part of executive coaching as part of personal development planning.

• Graduate assessment is popular but not universally adopted. This is despite diversity concerns amongst many graduate recruiters and commentators.

• ‘High stakes’ assessment for restructuring and succession planning remains underutilised by many respondents, despite its obvious strategic value in helping critical people and organisational decision making.

• Bespoke reports and feedback are valued more than automated computer generated reporting because of the value assessors and consultants provide. This illustrates that effective psychometric assessment still need experts to add value.

• 360 degree feedback is used intermittently by clients despite its obvious value in identifying leadership strengths and development areas of participants.

If you’d like to learn more about our work please email us, [email protected] with your name, title, function and organisation. We’ll then add you to our mailing-list. In keeping with our obligations under data protection legislation, your details will not be shared with any 3rd party.

www.theopg.co.uk

Third Annual OPG SurveyDecember 2020

Published by the Occupational Psychology Group (OPG)© Copyright OPG 2020

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Psychometric Assessment: A Valuable Business Tool Third