Note from Mr. G. W. Tucker, MS- Author and Developer of The PEAC SYSTEM® and a Management Consultant to the hiring, training and management industry for over three decades:
Although this article applies almost in total to true 'psychological
testing,' it does a great job of pointing out the important factors to any form
of testing, including communication evaluations such as the PEAC SYSTEM®
assessment. And, though it is also somewhat dated, it is a great discussion of
one of the main legs from which I revised and developed the PEAC SYSTEM®
beginning as early as 1984 to fit into corporate America. Ms. Kress simply does
a better job than just more information thrown at you from me! Some of the
following may not apply to you or your situation directly, but you will be better educated,
simply by investing a little time...
REPRINT FROM EMPLOYMENT RELATIONS TODAY /Spring 1989
PSYCHOLOGICAL ASSESSMENT PROGRAMS:
THEIR USE IN EMPLOYMENT DECISIONS
Properly implemented psychological testing can help
employers identify the best employee for the job and minimize costly placement
errors.
by Marjorie Kress
The use of psychological
assessment programs is increasingly popular in corporations for hiring decisions
generally, for both the selection and development of upper-level management
personnel, and as a part of succession planning. When a management vacancy
occurs, executives are under immense pressure to make a good hiring decision.
The psychological assessment process can help identify individuals who have the
ability and interest needed to successfully perform the job. Meaningful job
references are difficult to obtain, for they can expose former employers to
litigation. Moreover, placement errors are costly- not only in terms of wasted
training and orientation funds, but because such errors can lead to litigation.
Psychological assessment programs offers a response to these concerns.
This
article reviews the types of litigation to which psychological assessment
programs reduce exposure, as well as statutory limits on such testing. Types of
assessment are examined in terms of their relative depth and cost, and such
potential problem areas as disparate-impact effects of testing and the potential
for invasion of privacy and defamation are contemplated. Finally, solutions with
regard to selection of an assessor, reducing employee anxiety, supplementing
test results with other material, and providing employee feedback are
demonstrated.
The impetus for testing
As courts continue to limit the circumstances under which an
employee can be terminated, many employers have turned to increased use of
psychological assessment as an additional supporting factor for their employment
decisions.
Among the developing theories of employment law to which
employers must be responsive are discharges in violation of public policy, other
wrongful-discharge theories, and defamation. Furthermore, actions for breach of
contract are now often based not only on explicit contracts but also implied
contracts (which recognize a covenant of good faith and fair dealing) or
promissory estoppel (if there was reasonable reliance on a representation to the
employee's detriment). Courts are imposing obligations on employers to follow
written policies and guidelines even when the company had not intended to create
a contractually binding promise. When an employee is not advised accurately of
the conditions affecting his or her advancement opportunities, a basis for
claims of misrepresentation could exist.
New employment law theories
make it difficult for employers to investigate the background of job candidates,
yet increase the employer's exposure.
The potential for defamation
actions has caused employers to limit their references on former employees to
job title and dates of employment. Employers' ability to obtain information on
an applicant's criminal history has been restricted in some states. Nonetheless,
when an employer does not exercise reasonable care in investigating a
prospective employee's background and that employee causes injury to another
person, the employer may be liable for negligent hiring.1
Psychological assessment programs may serve to counter such allegations of
employer negligence in hiring.
__________________________________________
Psychological assessment programs may
serve to counter such
allegations of employer negligence in hiring.
__________________________________________
Statutory limits on testing
Any evaluation process that is used for
employee selection and promotion, including psychological assessment, must
comply with a variety of federal and state employment laws. Depending on the
employer's size and the nature of the business, the following laws may apply:
- the Civil
Rights Act of 1964 (Title Vii);
- the Age Discrimination in Employment Act (ADEA);
- the Rehabilitation Act of 1973;
- the Pregnancy Discrimination Act;- Executive Order No. 11246;
- state law counterparts to these federal laws;
- federal and state privacy laws and other laws affecting access to employee
personnel and medical records;
- state laws defining permissible psychological test use by employers.
Also, the Employee
Polygraph Protection Act of 1988 and state substance-abuse testing laws may be tangentially involved.
Programs that incorporate professionally
developed ability tests are specifically permitted by Title VII, as long as the
terms of the statute are met. A significant amount of employment litigation
involves alleged violations of that law, which prohibits employment
discrimination against any individual because of his or her race, color,
religion, sex, or national origin. The law states further:
It shall not be unlawful
employment practice for an employer ... to give and to act upon the results of any
professionally developed ability test provided that such test, its
administration or actions upon the results is not designed, intended or used to
discriminate because of race, color, religion, sex or national origin.
The Uniform Federal Guidelines on
Employee Selection Procedures and the Questions and Answers on the Uniform
Guidelines, as adopted by the Equal Employment Opportunity Commission (EEOC)
explain the agency's standards for evaluating psychological assessment practices
in the enforcement of equal employment opportunity laws.2
Courts often give deference to the guidelines.
The administration and use of professionally developed ability tests are also
permitted and regulated under the laws of many states. Like federal law, these
state laws generally allow employers to give and act on the results of ability
tests that are not designed, administered, or used to discriminate against
members of protected classes.
There are variations in several states. Maryland restricts the use of
psychological examinations. Minnesota's testing statute focuses on
pre-employment testing and lists criteria tests must meet to be considered fair.
In Rhode Island, written psychological tests are not permitted to be the sole
basis for an employer's decision on whether or not to hire an applicant.
Employers should consider these and any other state laws when structuring a
psychological assessment program.
The procedures
established in the Employee Polygraph Protection Act of 1988, which prohibits
polygraph test use by most employers, may be instructive for employers that use
psychological assessment. For those employers that are still able to use
polygraph tests after December 27, 1988, guidelines must be adopted that include
numerous employee protections. Some states have passed laws that are even more
restrictive; and employment laws that apply to substance-abuse testing also
exist. Before adopting a psychological assessment program, it is essential that
employers review the state law in all locations where the testing process will
be used.
Types of assessment
The most popular assessment
methods for employers are: (1) formal testing programs, (2) individual
assessment, and (3) assessment center evaluation.
Under formal testing programs, a battery of tests is administered to the
individual and then scored. The results are compared to scores considered
necessary for an acceptable job performance level. Formal testing programs are
primarily used for entry-level positions in which a specific skill or ability is
being measured.
Individual psychological assessment combines testing and one-on-one interview
evaluation by a psychologist. The tests vary from a formal program by including
an observed individual's reaction component. Employers that review job
candidates in pre-employment screenings are likely to use formal testing, or
possible individual assessment, in order to limit costs. In individual
psychological assessment, the job-seeker's ability to "mesh" with both the
position and with the culture of the organization is often evaluated.
Assessment center evaluation relies on the combined evaluation of several
psychologists or trained assessors. The participant is observed performing
simulated work exercises in role play and with an in-basket facsimile. The
assessment includes general background information about the job candidate and
formal testing and, like the individual assessment, considers the individual's
ability to fit into the organization. The center typically involves one to three
days of evaluation away from the workplace, often with an overnight stay at the
assessment facility.
Formal testing is the least expensive method of evaluation, but measures the
individual's performance under the most limited circumstances. Formal testing is
followed in cost by individual assessment. The assessment center method is the
most expensive program, especially when overnight accommodations are necessary.
Assessment center testing is seen by many to be the most reliable of the three
methods, because the ability of individual assessors to evaluate the
characteristics of potential employees, as well as the degree of empathy they
develop with such candidates can differ, and the assessment center technique
dissipates this factor. This technique's proponents believe that it also
provides a broader review of aptitudes and personality characteristics than do
other assessment procedures, as the individual is observed under a variety of
conditions.
With regard to management-level positions, assessment with psychological
evaluation is primarily used for (1) pre-employment screening of job candidates,
(2) employee evaluation for promotion, and (3) employee development. For
employers attempting rapidly to fill openings in management positions with
qualified internal candidates, assessment results may be used for candidate
identification and match. This is especially important in large organizations,
in which difficulty in identifying employees with the ability to move from one
area of the organization to another may exist.
With regard to workers, developmentally designed assessments
give employees feedback, so that they may attain insight and self-improvement.
Recommendations should be made to assist the employee in meeting his or her
development needs.
Because many hiring decisions are based on
subjective criteria, there is some danger that such discriminatory effects as
disparate-impact may be produced, that privacy rights may be violated, or that
grounds for claims of defamation may occur. The following section examines these
problems, and solutions are suggested.
Discriminatory criteria
There are many subjective
considerations in hiring and promoting employees, especially at the
upper-management level. As employees advance, their technical expertise is only
one of many factors considered important for performance success.
Administrative, leadership, and interpersonal relationship skills are often
critical, as are motivation, communication style, and skills at conceptual
thinking or problem analysis. The ability to adjust to unforeseen circumstances
may also be relevant.
A major employer concern is that
the qualities selected, and their respective measurements, are not
discriminatory. Subjective value judgments based solely on considerations of
comfort and familiarity, instead of potential job success, may result in the
selection of employees with personal experiences and backgrounds similar to
management's, thus perpetuating the status quo. This can exclude those in
protected classes and, therefore, may be discriminatory. Employers should
evaluate and monitor assessment methodology and use so that such discrimination
against protected classes does not occur.
Watson v. Fort Worth Bank and Trust, 108 S.
Ct. 2777 (1988) and
Griggs v. Duke Power Co.
401 U.S. 424 (1971)
These are considered benchmark employee selection and
promotion cases. In both, race discrimination was alleged. In Griggs,
the Court analyzed claims that certain evaluation procedures had a statistically
adverse effect, that is, a disparate impact, on a protected class. The Griggs
decision held that employers have the burden of showing that the employment
testing and other criteria are valid predictors of job performance. The Court
observed that "what Congress has commanded is that any test used must measure
the person for the job, and not the person in the abstract." Griggs also
established that in a disparate-impact case, the plaintiff is required to
identify the employment practice leading to the disparity and to establish
intent. Griggs
was important as an early testing case involving disparate-impact theory.
Until Watson, however, opinion was divided
on whether actions against employers that include subjective evaluation methods
could be brought solely as disparate-impact cases. With Watson, the Court
clearly resolved the issue by allowing an employee to proceed using a
disparate-impact model in a case involving subjective evaluation procedures.
In Watson, Justice O'Conner stated for
the plurality that "employers are not required, when defending standardized or
objective tests, to introduce formal 'validation studies' showing that
particular criteria predict on-the-job performance," and added that "many jobs,
for example those involving managerial responsibilities, require personal
qualities that have never been considered amenable to standardized testing."
Consequently, in cases involving subjective determinations, judicial deference
will be given to the employer's business judgement in choosing personal
qualities as selection criteria, as long as evidence is produced of "job
relatedness" or of a "manifest relationship" to the employment.3
.
;The business necessity defense can be
supported by accurate job descriptions, including a summary of necessary
abilities, and valid assessment procedures. This follows from the Court's
observation in Griggs
that "what Congress has commanded is that any test used must measure the
person for the job and not the person in the abstract."
For Employers that want to develop practices that
meet the terms of the law, Watson raises
many questions about how to develop a program that can withstand
disparate-impact challenges. The disparate-impact evidentiary burdens and the
role of business judgement are now at issue in Wards Cove Packing v. Antonia, 827 F.2d 439 (9th Cir. 1987),
cert. granted, 108 S. Ct. 2896 (1988), No. 87-1387 (argued January 18, 1989). It is expected to
resolve some of the confusion created by
Watson as to how and why disparate-impact
analysis will be applied.
Privacy rights
Although the Constitution does not
specifically mention a right of privacy, the Supreme Court has held that the
Constitution recognizes an implied right of privacy under penumbras of the
First, Fourth, Fifth and Ninth Amendment and the Fourteenth Amendment guarantee
of personal liberty.
4
Similarly, a
right of privacy is not specifically provided in most state constitutions-a
statutory right exists in only a few states. An invasion of privacy tort is
recognized, however, under the common law in many states. In evaluating an
invasion-of-privacy claim, courts look at whether a highly offensive,
intentional interference with the individual's solitude occurred. A "reasonable
person" standard is applied. Criticisms of polygraph testing (along with related
psychological stress evaluation tests) and substance-abuse testing have been
based on privacy issues. Individuals being tested asserted that the tests were
physically intrusive, coercive, and highly inaccurate. In response, courts and
legislatures are restricting and controlling such tests.
Yet in some
respects, expectations of privacy are being eroded. In
O'Conner v. Ortega, 480 U.S. 709 (1987),
the court examined privacy claims advanced by the former chief of professional
education at a state hospital after state hospital officials searched his
office, files, and cabinets. The Court found that the employer's actions in this
type of case should be judged under a standard of reasonableness under all
circumstances, not a probable cause standard. While recognizing the employee's
reasonable expectation of privacy in his office, desk, and file cabinets, the
Court saw a need
to balance this expectation against the employer's need for supervision,
control, and an efficient operation of the workplace. Moreover, the Supreme
__________________________________________
Strict reliance on
psychological assessment results to make promotion and hiring
decisions presents risk.
Court recently determined that expectations of personal privacy did not extend
to papers thrown away as trash in
California v. Greenwood,
108 S.Ct. 1625 (1988). Although these
decisions are interpretations of
public/governmental activity, they indicate that the Court does see definite
limits on legitimate privacy expectations in spite of the seeming expansion of
the concept elsewhere.
Federal and state law protection of medical
record confidentiality is a factor in any psychology assessment program. Laws in
some states prohibit disclosure of medical information except on a need-to-know
basis. Even when no statutory limit applies, prudent business practice should
lead employers to establish procedures that recognize and protect the
confidentiality of this sensitive information.
Employees have a right of access to their
personnel files in various states. If psychological assessment information is
included in those files, employees may have access. An employer can, of course,
refrain from including this information directly in that file. The success of
such an approach varies by state.
Defamation
If conducted without adequate safeguards,
such assessment also has the potential for exposing the employer to defamation
claims arising from the conclusions reached and the dissemination of the
information to a third party. Actions based on intentional infliction of
emotional distress and even product liability actions, if the employer developed
the psychological tests used, are possibilities.
There are ethical, if not legally
enforceable, obligations for employers and psychologists/test administrators who
use or administer assessment programs. Psychologists are governed by state
licensing laws and professional codes of conduct. The informed consent doctrine,
which requires to disclose procedures and treatment and obtain the patient's
consent, is relevant. The employer may have a resultant obligation to structure
an assessment process that respects those ethical concerns. Employers and
psychologists may rely on the Principles
for the Validation and Use of Personnel Selection Procedures
when formulating a
job-related assessment program.5
This document offers "principles of good practice in
the choice, development, evaluation, and use of personnel selection procedures."
The Standards for Educational and Psychological Testing (1985) offers
guidance.6.
Administrative issues
Such
issues as whether or not to use in-house assessors or consultants, the need to
reduce employee anxiety with regard to testing, the desirability of using
supplementary methods of gathering information, providing employees feedback,
and the need to maintain confidentiality must be addressed. Here, these issues
are described and various alternatives examined. Selecting an
assessor in full Psychology Analyzation or Assessment
Employers using psychological
assessment for management positions have several options for resource selection.
Depending on the size of the program, the organization may prefer to retain
staff psychologists to work full-time on assessment development and
administration. In other cases, the service of an outside consultant group or
individual psychologist may be used; however, a reliance on staff presents an
increased risk for the employer. Reliance on staff eliminates a third-party
evaluator who could also be a respondent should there be litigation relating to
the assessment process. When outside assessors are used, however, the employer
loses a measure of control over the type of questions being asked, and time must
be spent explaining the organization's culture and ground rules to the outside
assessor.
Employers should select their assessors with care. The use of licensed, trained
professional psychologists is recommended for anything deeper than
communications or style assessment. Even a valid test can be improperly
administered, and its validity destroyed. The results can also be improperly
analyzed, and validity is then negatively affected. The employer should also
instruct the assessor not to request information that relates to protected class
status. [Note added- The PEAC SYSTEM is communication style
based, only- no attempt for diagnoses is provided nor implied- GWT]
Allaying employees' anxiety
When
faced with the prospect of a psychological assessment, job candidates or
employees will have various concerns. The employer can anticipate and even avoid
some issues by accurately explaining the assessment program in advance.
Important information to be disclosed includes: the type of data to be
collected; the employer's privacy policy; the purpose for which the information
will be used; the length of time it will be kept; and the identity,
qualifications, and role of those involved in the process. The assignment of
employees to the assessment program should follow guidelines that are uniformly
applied. An option to delay assessment can be made available if employees are
ill or receiving medication that could affect the results.
Because the candidate can benefit from the process, either by avoiding job
mismatch, by identifying new job options, or for career development, it can be
expected that most will agree to participate. Current employees should therefore
receive information on the assessment program and its significance for their
advancement in the company. Some employees may, however, find the assessment
process intimidating and believe their consent was coerced. Employers that use
assessment programs can include a notice and consent section on the employment
application, in the employee handbook, or any postings of employment policies.
These statements can explain that psychological assessment may be used and that
a candidate's or employee's refusal to participate may affect their
opportunities within the company.
Employers may find that some potential employees may withdraw their
applications. Employers should decide in advance whether those who do not agree
can remain applicants. The employer may decide to continue to proceed without
assessment information, but if another qualified candidate is assessed, and the
results indicate a good job match, the individual who completed the assessment
process would normally be preferred for the position. Using
supplementary information
Strict reliance on psychological assessment results to make promotion or hiring
decisions presents risks because relevant information could be ignored. The
interview process is another important method for gathering information.
Information about educational history, work experience, and outside activities
can be critical. Past performance appraisals conducted through annual reviews
should be combined with and compared to assessment results on current employees.
Major discrepancies between the assessment results and these performance
evaluations should be reviewed and analyzed. Because employees may undergo
experiences that can affect work performance, evaluations should be performed
every three to five years. Providing
employee feedback
Employees need a consistent,
timely approach for releasing assessment feedback. Some employees may maintain
that they have a right to see the underlying test scores or the assessor's
written report. The possibility that the candidate would not understand, or
misinterpret, the conclusions of test scores to his or her detriment probably
outweighs the benefits to be gained, as long as a summary is provided. These
issues should be discussed before the assessment, and the candidate advised that
no physician-patient relationship will exist and that raw test data will not be
released to the candidate. By allowing the candidate to comment, either verbally
or in writing, on the conclusions expressed in the assessment report, the
employer can identify and respond to controversy at an early stage.
If the
candidate disputes the results, further consultation with those who were
involved in the assessment, including the candidate, is advisable. Retesting,
using a different test, may be considered. Conducting the same test again is not
an option, however, because test familiarity affects result and destroys
validity. Maintaining confidentiality
Instead of establishing a written policy on assessment report privacy, existing
employer policies relating to the confidentiality and disclosure of medical or
employment records may be used, if they are sufficient. Provisions for the
destruction of records would also be included. If existing procedures are not
adequate, modification is recommended. Employers can maintain the
confidentiality of assessment results by restricting access to any reports.
The records can be retained in the human resource department (but separate from
the personnel file), with the psychologist or assessment organization, or with
the employer's medical personnel.
A distinct assessment policy that
includes a privacy section may be advantageous, however, in organizations
wherein large numbers of employees are being assessed and the program is
well known. It is also advisable, in order to contradict potential claims of
unauthorized testing or disclosure, for employers to obtain written consent
to assessment from the job candidate or employee. The statement to be signed
should outline the program's operation, acknowledge an understanding of the
process, express consent, and authorize the release of the results to the
employer.
The approach that provides the greatest privacy
protection for employees is a voluntary program that uses psychological
assessment only for employee development and gives the employees the option of
not releasing the results to the employer.
For many employers, that approach is not
workable because they are seeking to identify the individuals with various
strengths for hiring or as part of succession planning. In such cases, a program
that combines fairness to the employee and confidentiality, while providing
useful information for the employer, is the most reasonable alternative.
Conclusion
The
cost to employers of management placement errors is high, as is that of
overlooking hidden talent in the work force. Psychological assessment programs
may provide employers with legitimate and useful information on the abilities of
job candidates and current employees. Employers can expect the information to
help them minimize placement mistakes and assist with employee development,
which will create cost efficiencies for their organizations.
The programs must be carefully structured and include
safeguards for the candidate, especially relating to privacy. The programs
should also be monitored and reviewed for possible discriminatory impact.
Although current employees and job candidates usually favor a voluntary,
developmentally designed program whereby results are released only to the
candidate, employers will not necessarily find such an approach useful.
Therefore, employers should establish their assessment programs with the needs
of both the organization and the employees in mind, along with equal employment
opportunity goals. The result can be a program which is fair, legally
supportable, and contributes to a successful match between the individual and
the employer.
Marjorie M. Kress is corporate counsel for Western
Life Insurance Company in St. Paul, Minnesota. (NOTE: at the time of
this publication)
NOTES
1.
See Ponticus v. K.M.S. Investments,
331 N.W. 2d 907 (Minn. 1983)
2. 29 C.F.R. 1607 (1978)
3. See also, Furnco Construction Corp. v. Waters,
438 U.S. 567 (1978); Washington v. Davis,
426 U.S. 229 (1976)
4. See, e.g., Roe v. Wade,
410 U.S. 1131 (1973); Griswold v. Connecticut,
381 U.S. 479 (1965)
5. Society for Industrial
and Organizational Psychology, Inc. Principles for the Validation and Use of
Personnel Selection Procedures, 3rd ed.
(1987)
6. American Psychological
Association, Standards for Educational
and Psychological Testing (1985).
7. Reprinted with permission from Marjoiie Kress,
with the thanks of those who find it helpful...