Psychometrics in Business by Arnold Daniels, Founder of Predictive Index
The following is adapted from a speech given by Arnold Daniels, Founder of Predictive Index
In introducing the subject of psychometrics in business, --- I am going to start by telling you about one of my client’s products. He manufactures a machine which spectrographically analyzes and then electronically records the composition of various metal alloys. I am told that it does this with great precision.
Whether or not you have bought one of my client’s machines depends upon just how important the specific analysis of metal alloys is to you in carrying on your business. I imagine that there are other ways of analyzing the composition of alloys. Perhaps you can judge the content of an alloy well enough for your purposes by the look of it, or the weight, or the ring of it. Or maybe judging the hardness of it by bite will tell you enough. If your need for accurate analysis is greater, you perhaps have gone further, to the use of chemical or microscopic analysis.
Of one thing I am sure * the method you use for analysis of alloys will depend on the demands of your product * * * and if your product, and the competition you meet in selling it, demand the highest possible degree of precision, then you will get and use the newest and most precise instruments of measurement available.
Naturally, you say . . . we have to maintain the quality of our product, and meet and beat the competition. And so you do.
Now . . . what does this have to do with the application of psychometrics in business? Well, I am repeatedly struck by the fact that there are many more businesses using measuring devices like the ones my client manufactures than there are businesses using measuring devices like the one I work with. And I’m disturbed by this fact, because I find it doesn’t make sense. If you make a product using metal alloys, the chances are very good that the cost of the alloy in the finished product is less than the cost of the labor, direct and indirect, involved in making and merchandising of the product. This is true of most products, and of most goods and services generally.
What does psychometrics mean?
Now, psychometrics is simply the measurement of human activity * and human activity is what is called labor, direct and indirect, in business. Doesn’t it follow, then, that the quality of the labor that goes into the product or service that you sell is at least as important as the quality of the alloy * in meeting and beating the competition? And competition being as intense as it is in almost every business, is it not only reasonable, but necessary, then, to get and use the most precise methods of measurement of the composition and quality of the labor that goes into your product.
Now when I say labor, I use the term in a broad sense . . . to cover all of the activity, from that of the President and the Vice President in charge of production or the Merchandise Manager all the way down the line to the activity of the men who finally load the finished product onto trucks . . . and we can then sum this group of people up as organization.
Businessmen are interested in their organizations . . . they read more and more articles on the subject, attend more and more lectures and discussion groups, and even take the time to read some books on the subject. And they’re sensible and practical people, too . . . why then are they so often so much more concerned with spectrometric, and other measures of tangible qualities, than they are with psychometrics?
Well, there are some good reasons why this is so . . . reasons generally based on misconceptions of the nature of psychometrics, and their function in business. And these misconceptions are generally not the fault of the businessman himself. In approaching the subject of psychometrics he is faced first with a specialized academic language . . . and one which uses terms with which he is familiar, but uses them in senses quite unlike those with which he is familiar. This leads not only to considerable misunderstanding . . . but it’s irritating, too. The businessman who is not a Chemist expects to be baffled by the technical talk of Chemists. But when the Psychologist talks about human behavior, he’s talking about something that the businessman (and everyone else) knows something about . . . and the language used should not be a barrier. This, then, is not the businessman’s fault.
Another reason why the businessman is often skeptical of the value of behavioral testing is a well * founded doubt regarding the accuracy of this kind of testing. I say well * founded because psychometrics has become a field not only for competent professionals but for amateurs and fadists as well. Its not a difficult thing to compose a test of this type today , but there is a great deal of work involved in accumulating and correlating the results. In the development of sound tests . . . thousands of tests have been given and checked against actual experience before the test was ever put to work predicting job performance.
We all see the little tests that are published occasionally in the Sunday magazine sections. The results don’t seem to have much meaning . . and actually they don’t. These tests are toys. They make interesting conversation . . . but they are not to be confused with the many carefully developed tests that are available to business today. These . . . have a background of as much as 40 years of experience and development. Many of them are based on experience gained in literally hundreds of cases. And while they are not . . . and never will be . . . as precise measures as the inch or foot measure . . they do dependably provide sufficiently accurate measures of certain areas of human behavior to make it possible to predict job performance accurately . . . once the nature of the job is clearly understood and defined . . . that last is important . . The analysis of the alloy which I talked about earlier is of no value to you, obviously, until you know just what combination of ores and chemicals your product requires. Equally so, in psychometrics . . . it is a relatively simple matter to obtain a measure of behavior once you have developed a sound test and learned how to use it. But . . determining just what the job will demand of the man is often the most difficult part of the operation.
What is the purpose of using behavioral testing in business?
Put very simply . . it is to come as close as possible to getting each person in an organization into the job which he can do best . . to fully utilize all of the potential that exists in an organization . . . and to achieve the best possible balance of the many different kinds of people it takes to make a business function . . . . Not particularly dramatic goals . . . you work towards them in managing a business whether you are using tests or not. But psychometrics aids the businessman by providing him with uniform measurements of the qualities he seeks in people . . by eliminating guesswork . . . and by giving him a means of projecting into tomorrow’s or next year’s job the qualities of behavior which he can only observe and evaluate in today’s job.
By Arnold Daniels Founder of Predictive Index
In introducing the subject of psychometrics in business, --- I am going to start by telling you about one of my client’s products. He manufactures a machine which spectrographically analyzes and then electronically records the composition of various metal alloys. I am told that it does this with great precision.
Whether or not you have bought one of my client’s machines depends upon just how important the specific analysis of metal alloys is to you in carrying on your business. I imagine that there are other ways of analyzing the composition of alloys. Perhaps you can judge the content of an alloy well enough for your purposes by the look of it, or the weight, or the ring of it. Or maybe judging the hardness of it by bite will tell you enough. If your need for accurate analysis is greater, you perhaps have gone further, to the use of chemical or microscopic analysis.
Of one thing I am sure * the method you use for analysis of alloys will depend on the demands of your product * * * and if your product, and the competition you meet in selling it, demand the highest possible degree of precision, then you will get and use the newest and most precise instruments of measurement available.
Naturally, you say . . . we have to maintain the quality of our product, and meet and beat the competition. And so you do.
Now . . . what does this have to do with the application of psychometrics in business? Well, I am repeatedly struck by the fact that there are many more businesses using measuring devices like the ones my client manufactures than there are businesses using measuring devices like the one I work with. And I’m disturbed by this fact, because I find it doesn’t make sense. If you make a product using metal alloys, the chances are very good that the cost of the alloy in the finished product is less than the cost of the labor, direct and indirect, involved in making and merchandising of the product. This is true of most products, and of most goods and services generally.
What does psychometrics mean?
Now, psychometrics is simply the measurement of human activity * and human activity is what is called labor, direct and indirect, in business. Doesn’t it follow, then, that the quality of the labor that goes into the product or service that you sell is at least as important as the quality of the alloy * in meeting and beating the competition? And competition being as intense as it is in almost every business, is it not only reasonable, but necessary, then, to get and use the most precise methods of measurement of the composition and quality of the labor that goes into your product.
Now when I say labor, I use the term in a broad sense . . . to cover all of the activity, from that of the President and the Vice President in charge of production or the Merchandise Manager all the way down the line to the activity of the men who finally load the finished product onto trucks . . . and we can then sum this group of people up as organization.
Businessmen are interested in their organizations . . . they read more and more articles on the subject, attend more and more lectures and discussion groups, and even take the time to read some books on the subject. And they’re sensible and practical people, too . . . why then are they so often so much more concerned with spectrometric, and other measures of tangible qualities, than they are with psychometrics?
Well, there are some good reasons why this is so . . . reasons generally based on misconceptions of the nature of psychometrics, and their function in business. And these misconceptions are generally not the fault of the businessman himself. In approaching the subject of psychometrics he is faced first with a specialized academic language . . . and one which uses terms with which he is familiar, but uses them in senses quite unlike those with which he is familiar. This leads not only to considerable misunderstanding . . . but it’s irritating, too. The businessman who is not a Chemist expects to be baffled by the technical talk of Chemists. But when the Psychologist talks about human behavior, he’s talking about something that the businessman (and everyone else) knows something about . . . and the language used should not be a barrier. This, then, is not the businessman’s fault.
Another reason why the businessman is often skeptical of the value of behavioral testing is a well * founded doubt regarding the accuracy of this kind of testing. I say well * founded because psychometrics has become a field not only for competent professionals but for amateurs and fadists as well. Its not a difficult thing to compose a test of this type today , but there is a great deal of work involved in accumulating and correlating the results. In the development of sound tests . . . thousands of tests have been given and checked against actual experience before the test was ever put to work predicting job performance.
We all see the little tests that are published occasionally in the Sunday magazine sections. The results don’t seem to have much meaning . . and actually they don’t. These tests are toys. They make interesting conversation . . . but they are not to be confused with the many carefully developed tests that are available to business today. These . . . have a background of as much as 40 years of experience and development. Many of them are based on experience gained in literally hundreds of cases. And while they are not . . . and never will be . . . as precise measures as the inch or foot measure . . they do dependably provide sufficiently accurate measures of certain areas of human behavior to make it possible to predict job performance accurately . . . once the nature of the job is clearly understood and defined . . . that last is important . . The analysis of the alloy which I talked about earlier is of no value to you, obviously, until you know just what combination of ores and chemicals your product requires. Equally so, in psychometrics . . . it is a relatively simple matter to obtain a measure of behavior once you have developed a sound test and learned how to use it. But . . determining just what the job will demand of the man is often the most difficult part of the operation.
What is the purpose of using behavioral testing in business?
Put very simply . . it is to come as close as possible to getting each person in an organization into the job which he can do best . . to fully utilize all of the potential that exists in an organization . . . and to achieve the best possible balance of the many different kinds of people it takes to make a business function . . . . Not particularly dramatic goals . . . you work towards them in managing a business whether you are using tests or not. But psychometrics aids the businessman by providing him with uniform measurements of the qualities he seeks in people . . by eliminating guesswork . . . and by giving him a means of projecting into tomorrow’s or next year’s job the qualities of behavior which he can only observe and evaluate in today’s job.
By Arnold Daniels Founder of Predictive Index