Articles Managing Employees and HR

Big Business has long relied on personality tests and behavioral interviewing to find the right employees. Now small businesses are making use of these administrative power tools.
By Reed Richardson

Here's the unhappy truth: There is no surefire way to hire a perfect employee. No matter how thorough you are ... no matter how many references you check ... no matter which personality tests you administer, you still never know precisely what you're getting until the person waltzes into the office and begins working.

That said, it is possible for small businesses these days to get a pretty good sense of who's being hired-and whether that person is likely to be a good fit-using some of the same tools and techniques that have long been used by major corporations. This will require investing a little extra time and effort. But most small-business owners feel that the results are worth the investment-and some even consider the additional steps a mandatory part of the hiring process.

"If you're a small business, making a poor choice is much more devastating than with a big company," says Francie Dalton, founder and president of Dalton Alliances Inc., a business consulting firm in Columbia, Md.



To help business owners avoid such land mines, many companies provide diagnostic and personality tests that assess a candidate's "personal style"and, theoretically, his or her ability to blend in with the company culture. Typically, these tests focus on integrity, aptitude and personality-and are based on benchmarks that can help establish which personalities are suited for which jobs. For instance, you likely don't want a reserved person who's a stickler for standard practices in a freewheeling sales job.

Tons of testing choices are available to assist in the recruitment process. Business owners can administer written questionnaires that they can mail or fax back to the testing company for results. An increasing number of online testing and scoring services as well as software packages let owners score results on their own.

For instance, Hire Success (www.hiresuccess.com) provides free software that enables users to administer tests themselves, and features an online option that sends the applicant's answers to the employer's e-mail account almost instantly. Inscape Publishing (www.inscapepublishing.com) offers CD-ROM-based training and assessment kits. Wonderlic Inc. (www.wonderlic.com) and Birkman International Inc. (www.birkman.com) provide tools and consultants to help companies achieve personnel effectiveness.

Prices for these services vary, but most are affordable to small businesses-especially considering that the price tag for a bad hire ranges from an estimated $8,000 to $10,000. Wonderlic, for instance, offers a package of five "comprehensive personality profiles"for $125. Hire Success customers pay between $10 and $30 per report, and some in-depth tests can run as much as $500 each.

And some testing companies are now tailoring their products especially for small business. PI Worldwide (www.pi worldwide.com), for instance, offers a scaled-down version of its famed Predictive Index (PI) for small business. "This test is valuable because it does more than measure qualifications,"says Dennis LaRosee, senior vice president of PI Worldwide in Wellesley Hills, Mass., which publishes, administers and scores the test, and also offers consulting and training. "It assesses fit in relation to a job position and a corporate culture. The more a new hire is in sync with his workplace, and the more a position meshes with his innate personality traits, the happier and more productive he'll be-and the longer he'll stay."

When Dave Ratner, owner of Dave's Soda & Pet City, a (you guessed it) soda and pet shop with four locations in western Massachusetts, is looking to hire employees to work in his shops, he uses another small-business-oriented testing product, the National Retail Federation Customer Service Assessment, which goes for about $20 at www.nrf.com.
"The NRF test is great for customer service and customer ‘attitude' skills in general,"he says. "And it asks some hilarious questions like, ‘If a customer is annoying, should you yell at them?' You'd think they're pretty obvious answers, but it's amazing what some people say."Bonus: You can score the test yourself-or have NRF score it for you.

But you can't rely on diagnostic tests alone. "There are pros and cons to using personality tests or emotional IQ testing,"says Smooch Reynolds, CEO of the Repovich Reynolds Group, a recruitment firm in Pasadena, Calif. "A lot of people consider diagnostic tests to be the defining factor for whether or not they should hire someone-and there's real risk in that. People should use them as just one of several lenses through which they analyze a candidate."

According to Ben Dattner, Ph.D., a business consultant and adjunct professor in the Industrial and Organizational Psychology M.A. Program at New York University, one of the biggest problems many startups and small companies face is that they don't have standardized systems or human resource departments in place.

"Consequently, they use superficial criteria to hire people, such as how they look or how they come across in an interview,"he says. "Basically, they are looking for a certain stereotype that has been successful in similar roles. Not stereotypes based on gender or other demographics, but more on the order of a person who went to a certain school or has a certain professional background."

So, before you do anything, start with a clearly defined job description. "It doesn't have to be etched in stone. But until members of the organization reach a consensus about the tasks, responsibilities and level of authority for the position, it's not even worth placing a job ad,"he says.

Truth or Dare?

Background checks are equally vital. Recent studies have shown that 34 percent of résumés and 73 percent of job applications contain false or embellished information-even at the highest professional levels. To counter this trend, Gerard Major, Ph.D., an organizational psychologist in Manhattan, suggests that employers get at least nine references. Yes, nine.

It's also important to get work samples. "The best predictor of future performance and behavior is past performance and behavior,"says Dattner. "If you want them to write business plans for you, have them submit one they did in the past. Or get them to write a new one."

You also should have other people interview the candidate-ideally, those who know your value system. And make sure all interviewers prep for the big face-to-face meeting. "Too many employers interview candidates without first compiling a list of questions,"says Marc Savage, who runs Cohn Executive Search in Manhattan. "Begin the interview by giving an historical outline of the company, then get into the specifics of the position and why it is currently available,"he says. "While the candidate responds to your questions, take copious notes. Observe the candidate's demeanor. Discern how well he or she knows your business. Note details like, did the candidate do research, take notes and ask relevant questions?"

Francie Dalton suggests conducting "behavioral interviews"-that is, not just asking standard questions but framing them in a way that seeks clearly defined examples. "If I ask whether you are someone who takes initiative and you say yes, what good does that do me?"says Dalton, who suggests asking applicants to describe specific scenarios when they took initiative and succeeded-and at least one example of when they failed. "If a person is only comfortable talking about successful outcomes,"she says, "that can be significant."

When inviting serious candidates back, Savage recommends doing second interviews in a different venue and including lunch. "This allows for a more relaxed encounter where the candidate is more likely to reveal himself or herself,"he says.

Finally, don't overlook intuition. If you get a feeling about a person one way or another, pay attention to it. "I can't tell you how many times my gut has said something is wrong, and I say, ‘Oh, forget it,'"says Dalton. "And then I really regret it."

Reed Richardson is managing editor for Business 24/7 magazine.