Integrity Tests Reduce Hiring Risk, Lower Workmen’s Comp

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Integrity Tests Reduce Hiring Risk, Lower Workmen’s Comp

Interest in pre-employment integrity testing is exploding.  Curiosity about its effectiveness prompted a writer for HR Magazine (log in required to view article) to call me for an interview.  While I wasn’t personally mentioned in the article, my company Success Performance Solutions was.  The article provided excellent success stories including how one company reduced workers’ compensation claims using pre-employment testing.

Integrity tests, also called honesty and integrity or counter-productive behavior tests, were the first personality tests used in pre-employment screening. Integrity testing was first used more than six decades ago, according to Deniz S. Ones, a professor of industrial psychology at the University of Minnesota in Minneapolis and a widely published expert on the topic. One doctoral student, Harrison Gough, was developing a more general inventory for normal personality traits. While the test was still in development, recruiters for retailer Bloomingdale’s contacted him, looking for a test that would identify applicants likely to cheat, lie or steal. Gough offered a subset of his questions.

According to Ones, “You can still find integrity tests and pieces of personality tests that look like these questions. These have been proved in statistical analysis to be predictive of theft and other negative behaviors on the job.”

Today, there are two types of integrity tests: overt and covert. Overt tests contain questions that leave little doubt about what is being determined. For example, “What is the most you have ever stolen: a) $0; b) $1-$200; c) $201-$500; d) more than $500.”

In a covert test, the questions are indirect; the answers give a sense of the individual’s conscientiousness, emotional maturity and the like. Gough’s test was covert.

Both types of tests include questions designed to determine dishonesty. An answer of “a” above, in conjunction with other too-good-to-be-true answers, would suggest dishonesty and would be statistically factored into the results.

Despite claims to the contrary, integrity tests have been validated repeatedly by developers, independent researchers and HR professionals at the many companies using them. And compared to other pre-employment screening options such as checking credit histories and criminal records, there is no comparison. Both credit checks and criminal background checks provide historical data that don’t necessarily predict future behavior. Both also face growing legal and legislative scrutiny.

Integrity tests, according to David Arnold, an industrial psychologist and general counsel at Wonderlic, “do not cause adverse impact or raise issues with the Americans with Disabilities Act.”. Arnold knows of 30 to 40 complaints about integrity testing brought before state human rights agencies in the past two decades, but none went beyond the complaint stage. No federal agency, such as the U.S. Equal Employment Opportunity Commission, has challenged integrity testing. “There have not been any landmark cases,” he says.

Ms. Ones herself conducted a meta-analysis of validation studies, which concluded that the tests are statistically valid and predict what they purport to. Among all types of pre-hiring assessments, including background screening, research has shown that integrity tests have the highest validity for predicting undesirable behaviors at work.

Honesty and integrity tests are also inexpensive to administer; they provide measurable results and they’re legal too. Most integrity tests are online; a candidate goes to the employer’s recruiting site, completes the application and is directed to the test. Results are processed and available to the employer immediately.

The writer states, “It seems odd, then, that integrity tests are not more widely used to manage risk.”  I wonder that too based on the success stories our clients experience and those shared in the HR Magazine article.

For example, Hospitality Management Corporation, in an effort to reduce workers’ compensation claims, launched pre-employment integrity testing at one hotel to see if the tests could weed out applicants likely to be dishonest, take dangerous risks or engage in other undesirable behaviors. The result? After six months, workers’ compensation claims were down among new hires.

Some employers use both types of tests. Recruiters for ATT use personality tests and an integrity test for our retail hires.  AT&T uses the integrity tests to weed out applicants likely to steal, cheat or defraud the company. Theft is a concern because AT&T retail stores sell popular mobile computing devices. The broader personality test suggests whether a candidate is likely to succeed as a salesperson.

The most important results are the business benefits. Two independent researchers at the Center for Hospitality Research at Cornell University in Ithaca, N.Y., studied integrity testing and the reduction of workers’ compensation claims. They compared data from a large, unnamed hotel corporation. One group of 27,265 employees was hired before the test was used. Another group of 6,079 employees passed the test before they were hired.

The screened group experienced a markedly lower incidence of claims compared to the unscreened group, and the average claim size was larger for the unscreened group: $3,466 vs. $2,119. The differences were statistically significant—that is, greater than would be expected due to chance.

Considering the $20-per-candidate cost of the test and the cost of the claims, the researchers calculated an ROI of 50 percent in one year. In other words, about half the cost of the tests was recovered in savings from the lower cost of workers’ compensation claims.

The researchers later repeated the study with another large, unnamed hotel organization and got similar raw results.

Other companies report claims of reductions in employee theft, sabotage, unexcused absences, and aggression toward co-workers absenteeism after using pre employment integrity tests. When combined with a personality test, several companies reported improved on the job performance too.

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