Darany Associates
Public Sector Selections Solutions

Selection Thoughts

 

Welcome to PSST.  This is a space where we share thoughts that we have gained by having the privilege of working for and with many of those who helped to shape our profession, such as our founder, Ted Darany.  If you read Ted’s biography (provided in the "Our Founder" section on this site), you will note that he worked for State and Federal agencies during the critical development period following passage of the Civil Rights Act of 1964.  During that time, he was instrumental in founding professional organizations that continue to serve as vital resources to practitioners. He was a true advocate of the value and importance of sound selection, instilling in us a love of our profession and a passion for pursuing excellence in it.  Through his teaching and his encouragement of professional involvement, we have had the opportunity to learn from so many of those brilliant, dedicated people who were "in the room" so to speak as much of our profession was taking shape.

Whether you are new to selection, a seasoned professional, or someone who fits into the wide range of selection program customers, it is our hope that these brief insights will provide perspective and, perhaps, even inspiration.  In the end, it is our objective to promote and preserve the ideas and values that have shaped our profession.  Using Ted’s own words from a presentation to the Personnel Testing Council of Arizona in 2006, "We have the best story around.  We need to discover and develop the best ways to tell it."

This is our effort to preserve and continue the story.  The acronym "PSST" was chosen for two reasons.  First, it reflects the idea that the power of sound selection tends to remain one of the "best kept secrets" and we need to pass it on.  Also, Ted loved acronyms.  Much of his work (WRIB, DELPOE, DELFE, . . .) has an acronym associated with it.  Rumor has it that he would sometimes start with the acronym and then come up with words to fit.  We had some pretty lively discussions as some of them evolved since they occasionally took humorous (and less printable) turns.  Thus, it is in keeping with Ted’s spirit and his dedication to public sector selection that we offer PSST.

Note: The PSST offerings are written by Darany Associate, Kristine Smith with input and insight from fellow associates, Christie Jacques and Jennifer French. If you’d like to comment on the content or suggest ideas for future topics, please contact Kristine at ksmith@daranyassociates.com.

 
 
 
 

PSST #3 - Why Test? Part 3: Return on Investment

If fairness and public accountability were not enough, there is yet another compelling reason for developing an effective testing program - it makes business sense!  Private sector companies do not have testing programs because they are required to or are concerned about societal values.  They do so because the selection of the most highly qualified candidates directly impacts their productivity which, in turn, impacts their bottom line.

To illustrate the point, pause for a moment and consider the worst co-worker you have ever had.  Think about the amount of work they completed and the disruption to the organization they caused.  Now think about the best co-worker you have ever had.  Think about their productivity and overall effect on the work environment.  This reflection always portrays a stark contrast which directly points to the cost benefits of effective selection.  Those who are best qualified and equipped to perform the work at hand tend to produce more, stay longer, and cause less harm to the organization and its people.  If that weren’t enough, the cost of selection failure also must include the cost of replacement.  How much does an organization invest in hiring and training an employee and what might be the costs resulting from the above noted problems associated with a less qualified worker? 

The reflections here are intended to be brief and provide perspective rather than technical direction, but one must turn to the research to convey the astounding power of this point.  While you can venture out on your own and find an abundance of information on test utility, I’ll provide a classic:  The Validity and Utility of Selection Methods in Personnel Psychology: Practical and Theoretical Implications of 85 Years of Research Findings by Frank L. Schmidt and John E. Hunter, which appeared in Psychological Bulletin (1998, Vol. 124, No, 2, 262-274 ).  In this seminal work, they state "The cumulative findings show that the research knowledge now available makes it possible for employers today to substantially increase the productivity, output, and learning ability of their workforces by using procedures that work well and by avoiding those that do not."   In a follow-up work, Schmidt states that "The standard deviation of the dollar value of output (called SDy) has been found to be at a minimum 40% of the mean salary of the job."  He illustrates this with the following:  "If the average salary for a job is $40,000, then SDy is at least $16,000.  If performance has a normal distribution, then workers at the 84th percentile produce output worth $16,000 more per year than average workers (i.e., those at the 50th percentile)."

You can see the power here.  Ted experienced a similar outcome with a validation study for clerical classifications that he conducted while working for the then U.S. Civil Service Commission.  Using the improved validity estimates and subsequent productivity improvements, he was able to concretely demonstrate the significant dollar value attributed to the use of an effective test.   If you choose to explore the concept of test utility further, you will find a variety of approaches.  However, the common thread is not a lack of significant findings, but rather value estimates that are so large as to seem implausible.  The point is this:  when we maximize the validity of our processes, the work we do has unparalleled potential to create value and impact in the organizations that we serve.

With that in mind, it seems fitting to close this reflection on the question of "Why Test?" with the quote from Ted that we used to introduce PSST:  "We have the best story around.  We need to discover and develop the best ways to tell it."

Darany Associates