Anyone with experience in hiring can tell you that it can often feel like a guessing game. The typical process includes reviewing applications and/or resumes and talking to candidates on the phone and in person. And, at the end of it all, you still aren’t always sure if the individual is the right person for the job. You wish for a crystal ball that can tell you definitively if someone is going to be a good hire. Unfortunately, a hiring magic crystal ball does not exist, but adding an assessment to your process can provide a lot more accuracy than you might think. Many people wonder if the cost and time associated with an assessment is really worth it. How accurate can an assessment be? Let’s take a look at how well-designed and validated pre-employment assessment tools predict performance and compare that to well-known relationships and other common selection tools.
The statistic used to evaluate the accuracy of an assessment tool is called a correlation. A correlation is a number from -1.0 to +1.0 that indicates the strength of the relationship between two variables (e.g., assessment score and job performance). The closer the number is to 1.0, the stronger the relationship. The direction of the relationship is indicated by the positive and the negative sign. A positive relationship means that as one variable goes up, so does the other one (e.g., temperature and ice cream sales). A negative relationship means that as one goes up the other goes down (e.g., temperature and down jacket sales). When trying to predict and explain human behavior, correlations close to 1.0 are practically impossible. However, over the past few decades I/O Psychologists have thoroughly studied predictors of job performance and have a good idea of how to reliably measure underlying characteristics and candidate behavior that can accurately predict job performance.
How strong are the correlations between assessments and job performance? How do these compare to other relationships? Let’s start by saying that well-designed assessments that measure job-relevant characteristics (supported by job analysis) can correlate with job performance as high as .65. To help understand how to interpret this relationship, see the table below and observe the relationships between well-established relationships, such as mammograms and breast cancer. Most women have made yearly mammograms a staple of their annual health plan based on the research linking the two together. In the grand scheme of things, the relationship is small to moderate, but it’s practically significant – meaning it’s strong enough to recommend that certain women will benefit from a yearly check-up.
Additionally, if I were to ask you where in the world is the hottest daily temperature? A very good guess would be some country or city closest to the equator. Typically it gets hotter and hotter as you get closer to the equator. The actual correlation is .60; that’s a high correlation but not a perfect one (1.0) because other factors like humidity and elevation impact the relationship. Think about that - assessments can be as accurate at predicting job performance as the distance from the equator predicts daily temperature. That’s pretty accurate!
Let’s also look at assessments compared to interviews – assessments can be 4 to 5 times more accurate than an unstructured employment interview (NOTE: correlational increases are multiplicative in terms of predictive accuracy, so small increases can lead to big differences). Consider also that the correlation between two supervisors rating the same individual’s job performance is only .55. You would think it would be closer to 1.0, but different supervisors use different criteria to evaluate performance. With all this said, assessments can provide some valuable and predictive information about an individual’s job performance potential.
Not only can assessments add prediction and accuracy, they can make your process more efficient. If a candidate does not pass an assessment, then your HR team does not need to spend its valuable time interviewing unqualified candidates.
I feel compelled to point out that not all assessments are the same. If you’re considering adding an assessment to your hiring process, do your homework. Ask assessment vendors for validity information and/or conduct your own validation study. Lastly, use the assessment consistently and fairly across all applicants. If you have made some bad hiring decisions and want to make your process better, consider looking into assessments – they work!