Best Practices for Reducing Legal Risk in Pre-Hire Assessments
Daniel R. Fisher, Ph.D., and Robert J. Nobile, J.D.
The Need For Selection Assessment
In an increasingly competitive domestic and international market, hiring the best
people is considered one of the most critical elements of a company’s success. In the
course of his research, Jim Collins, author of Good to Great1, found that one of the
fundamental differences that distinguishes great companies from good ones has to do
with a company’s ability to determine "Who should be on the bus”. Collins’ research
showed that while most companies do not pay enough attention to getting the right people
on the bus, those companies that have gone from good to great practice a principle of
getting the right people on the bus, the wrong people off, and then allowing the right
people to point the bus in the right direction. Not surprisingly, while personnel selection
is important at all levels of an organization, it is most critical at senior executive levels.
Collins argues that investing resources into selecting the right people is even more critical
to an organization’s success than developing high-level strategy, since the wrong people
will neither create nor effectively implement a good strategy. Given the importance of
selecting the right people to get on the bus, it is not surprising that the popularity of
selection assessments for use in hiring at all levels of the organization has increased
dramatically in the last ten years and continues to rise.
Employers are recognizing that well designed and implemented assessment
programs produce concrete benefits including reduced turnover, enhanced performance,
lower levels of employee misconduct, as well as other tangible indices of return on
investment. According to the American Management Association, 60% of Fortune 500
companies now use testing as part of their hiring process2. The growth of testing in the
workplace reflects a broad consensus in the business world that hiring the wrong person,
particularly the wrong senior level executive, can negatively impact morale, productivity
While some might assume that the demand for selection assessment services
might lessen during challenging economic periods, it turns out that during these times an
increasing number of employers seek assessment programs to evaluate employees. This is
particularly true in the retail industry. According to recent data published by the National
Retail Security Survey3, the average loss per incident of employee theft in a retail setting
is over $1,000. To mitigate this risk, employers, in states where it is allowed, are
increasingly turning to integrity tests to help identify high-risk employees.
One of North America’s largest retailers recently participated in a study to
ascertain whether the implementation of pre-employment testing at many of its store
locations would impact the number of thefts per store and the dollar amount stolen per
store. After the first nine months of implementation, the average number of employee
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theft apprehensions in locations where the program was implemented was 5.72, versus
7.89 in non-participating locations. Further, the average dollar amount stolen per store in
the assessed locations was $10,743 versus $15,829 in non-participating locations.
Any test or procedure used to measure an individual’s job-related qualifications and
interests can be considered a personnel selection assessment tool. A selection assessment
will ordinarily include a combination of a preliminary job analysis and competency
profiling, interviews, cognitive, ability, and/or personality tests, and work simulations.
Ideally, an assessment should never be based solely on a single test or measure. A test or
an individual procedure provides only part of the relevant information about a person. A
range of selection assessment instrumentation, methodology, and legal consideration is
necessary to address the particular abilities, competencies, and personality dimensions
relevant to a given position. Selecting a CFO requires a different assessment approach
than the process that is employed for the promotional assessment of an internal client
manager, and both may vary significantly from the approach employed to assess potential
cashiers at a supermarket. Yet in each case, we advise adhering to two fundamental
rules: Whenever making personnel selection decisions, make sure that the competencies
you are assessing for are related to the specific position for which you are recruiting, (or
potential promotional positions), and use as many sources of information as possible,
including work history, interviews, test findings, and references. No one piece of
information, in and of itself, is sufficient to predict future job performance. By limiting
the scope of the assessment to the relevant competencies and using multiple data sources,
the accuracy of the prediction is increased while the risk of legal action is reduced. When
challenged in a court, an employer will be in a better legal position if it is able to show
that there is a business necessity for each competency measured and that testing was only
one factor in the selection decision.
While HR managers treasure the data and benefits that selection assessments
provide, legal counsel lie awake at night concerned about the potential legal liability to
which the company is exposed. Because the literature on the legality of different
assessment measurements is often confusing and rife with misinformation, most of the
purveyors of assessment services are unaware about whether their assessment process
conforms to professional and legal guidelines. Unfortunately, this leaves no-one to
mediate effectively between the internal person who promotes the use of assessment for
hiring decisions (typically the head of HR, but increasingly a senior line manager) and
the internal or external counsel who is trying to minimize legal risk.
As we begin to balance these seemingly competing interests, it is worth noting
that a new and previously unforeseen advantage to using selection assessments has
arisen: Well designed and implemented assessment programs may actually assist
companies in the probative demonstration of due diligence in hiring, thereby reducing
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the company’s exposure to negligent hiring liability claims. A properly designed and
implemented selection assessment using validated, job-related tests may also help reduce
legal exposure to discrimination claims. The EEOC requires companies to use “best
reasonable efforts” to remove biases from their hiring process. The personal biases of
interviewers often lead to discrimination claims. The use of validated tests, which have
been shown not to have any adverse impact and not to discriminate based on age, sex,
and race, can reduce subjective biases, thereby making the process fairer for all
Best Practices for Personnel Selection and Selection Assessment
We recommend that all pre-hire assessments for positions where many candidates
are evaluated for jobs, in which they will be doing basically the same work, include a
well-executed job analysis. This consists of interviewing employees and their
supervisors in order to identify the essential functions required by the job. To comply
with the Americans with Disabilities Act (ADA) it is important not only to identify the
essential functions of a particular position, but also to distinguish between fundamental
and marginal job duties. The key to ADA compliance is not whether a disabled employee
is capable of performing in the role, but whether that employee could perform the
essential functions of the role when reasonably accommodated. These accommodations
can range from providing a stool for a cashier with arthritis to acquiring special software
for a blind senior accountant.
The job analysis must also be followed up with a job description cataloging the
necessary duties, responsibilities, and behavioral competencies entailed in the job, as well
as other duties assigned by the employer. (The last item being an important distinction to
make in the written document in order to retain flexibility in the job description from a
legal perspective.) No matter what the level of the position, the job description must
include objective, measurable, performance accountabilities. Behavioral competencies
must result in the clear definition of the knowledge, behaviors and motivations necessary
to be successful on the job. Including competencies based on soft or subjective criteria
such as personal, interpersonal, and motivational competencies is acceptable as long as
they are applied evenly to all applicants for a position and are job-related.
For senior level positions, or middle management positions in smaller companies,
a different approach from the initial job analysis is required. Since these higher-level
positions often entail individuals performing a unique function in the company, rather
than performing a conventional job analysis as described above, a best practice is to
employ a “job modeling” methodology to identify the personal competencies required to
perform the job4. These competencies, behavioral descriptions of job-related knowledge,
skills, and abilities, are used as the basis of comparison between different job candidates.
It is strongly recommended that a trained assessment expert conduct individual
assessments of this sort.
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Choosing Assessment Instruments to Address Identified Competencies
Once the relevant behavioral competencies have been identified, the assessment
instruments that are best suited to measure these specific competencies and
characteristics must be selected or created. Since there are many different tests, each
providing different information, we strongly recommend the input of a knowledgeable
assessment expert to help select the specific tests to be used. Further, it is important for
employers to know how the publisher expects the test to be used, and to ensure that it is
used it in that fashion. Otherwise the results may not be valid and the employer’s legal
risk may be increased.
Predictors of job performance can be divided into those that are focused on ability
and those that are focused on personality. Both ability and personality predictors have
been shown to be important determinants of performance across a wide range of jobs.
Research on the importance of personality suggests that although ability is very important
in determining if an individual can do a given job, it offers little insight into whether an
individual will do a given job. Researchers have been able to improve the prediction of
job performance when personality measures are added to a battery of ability tests.
Incorporating both ability and personality measures has the potential for higher levels of
validity than assessment systems relying solely on one type of variable.
Hundreds of aptitude and personality tests are available commercially. Selecting
the right combination of assessments to answer the questions most relevant to an
organization’s selection process is a daunting task for HR managers and executives.
Most consumers lack the background in psychology and test measurement to evaluate the
value of various tests or the claims of publishers or consultants who recommend them.
This is especially critical since the EEOC’s Uniform Guidelines on Employee Selection
Procedures hold the “user” of the test (i.e., the employer) and not the test publisher
responsible if the test is found to discriminate.
The different types of tests available for assessing key competencies include:
• Cognitive tests, which measure learning ability, particularly the ability to
learn through the use of printed material.
• Aptitude tests, which seek to measure and predict a job candidate's
potential for learning and performing specific skills or activities. These
tests seek to measure how trainable a job candidate is, rather than how
well he or she has been trained.
• Achievement tests, which range from simple word processing tests to
sophisticated online or paper and pencil tests that measure degree of
knowledge in specific fields. They measure not how trainable a job
candidate is, but how well he or she has been trained for a specific work
• Personality inventories, which assess traits such as drive for results,
decision-making style, and temperament. These tests can be useful in
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predicting whether an applicant has the personality traits that are usually
associated with success at particular jobs.
• Integrity tests, or "honesty tests," which are designed to determine the
integrity of people who take them by measuring attitudes toward
dishonesty and propensity for theft-type behavior. May not be legal in
• Work Samples, which directly measure a person’s performance in doing
a job related task. Often include both interactive and noninteractive tasks.
• Biographical Inventories, which entail collecting and objectively scoring
events from candidates’ prior history related to determining what kind of
people they are.
To offer some examples of which type of test instrument to use to measure which
type of competency, consider that for promoting client managers, it is relevant to know if
they will make good supervisors (personality inventory, biographical inventory) and if
they possess the necessary critical thinking skills required to develop and understand
complex strategy (cognitive test, work simulation). For selecting a CFO, it is important to
know how strategic, rule conscious, motivating, and emotionally intelligent the
candidates are (cognitive, personality, and abilities tests).
Research on personality has found the following five personality traits to be the
most predictive of employee success. The majority of recently developed personality
instruments are built around these five factors5:
• Extraversion - the extent to which individuals are outgoing, assertive and
positively interactive with others instead of reserved, independent, and
• Agreeableness/Accommodation - the degree to which individuals are
cooperative, warm and agreeable versus self-focused, challenging, and
• Openness to experience/Originality - defines individuals who are
creative and curious versus practical, conventional, and narrowly focused
• Need for stability - the degree to which individuals are calm, self
confident, and cool versus reactive, anxious, dissatisfied and emotional
• Conscientiousness/Consolidation - the extent to which individuals are
organized, dependable and focused on fewer goals versus non-goal
directed, disorganized and unreliable
Assessing test validity
Using test instruments that are valid is critical to effectively assess candidates and
reduce legal risk. A test is considered acceptable if it meets three basic criteria. First, the
test itself must be validated - that is, the test must measure what it says it is measuring.
Second, the test must be reliable - meaning the results must be consistently repeatable.
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Reliability is often a problem with interviews, where it is not uncommon for two
interviewers to get different responses to the same questions, depending on the
interviewer's ability to both probe and interpret the responses or the effect of the setting
in which the interview is given. Finally, the test must be job relevant and job specific. In
order for the tests to be legally defensible, they must comply with the guidelines of the
EEOC under Title VII of the Civil Rights Act of 1964, and the ADA.
There are three basic methods of test validation: content-, criterion- and construct-
based validation. Content-validation involves analyzing the content of the tests and
demonstrating that it corresponds to the job tasks as set out in a complete Job Analysis.
Construct-validation involves showing that the test measures specific personal
characteristics that are shown to be necessary for performance of the job. Criterion-
validation involves showing a statistical correlation between performance on the test and
actual job performance as measured by specific criteria. Limiting job analysis to selected
jobs that are unrepresentative of the full range of work performed is inadequate for test
To limit legal risk, we encourage employers to deal with reputable psychologists,
assessment specialists, and consulting firms and ascertain certain key information about
any proposed tests. Employers should check if a proposed test has ever caused
employment discrimination charges, or ever been scrutinized in any investigation. They
should determine if there has ever been an invasion of privacy lawsuit or any other
litigation involving the test. It is also important to know whether the test has been
"validated" according to the EEOC’s Uniform Guidelines On Employee Selection
Procedures5, and, if so, the position(s) to which that validation applies. A test may be
used in jobs other than those for which it has been professionally validated only if there
are no significant differences between the studied and unstudied jobs.
We also suggest asking for an opinion letter from the test’s publisher concerning
the test's lawfulness under employment discrimination laws. It is also a good practice to
ask for information on precise traits the test seeks to measure and objective prove that the
test actually measures these traits.
Employers should make sure that the technical manual for the test instrument
provides thorough documentation of the development of the scales used, the development
of the norms, the various validation studies, and the diversity of the populations used in
the studies, which should represent a mixture of appropriate ages, sexes, and races.
The test instrument should have been designed for use in a selection process. Many test
instruments, which were originally validated for use in counseling and self-development,
are unfortunately marketed as hiring tools. Unless these measures have been re-validated
as selection instruments on relevant business populations, their results are questionable
and can increase the employer’s legal vulnerability. The psychometric studies that
generated the original norms should be revisited approximately every three years. This
allows the instrument to adjust to changes in demographics and social values and
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Certain personality assessment instruments are ideal for leadership development
purposes, but are problematic as selection instruments7. These tests reveal key insights
about individual personality styles, and predict how an individual is likely to respond in
different types of situations. While this sort of personality information may be important
when gauging the fit between a senior level executive and an executive team, if these
personality assessments were not validated on a relevant population of employees or
executives, and the scales tied to specific job functions, then any conclusions drawn from
them may leave the employer vulnerable to potential legal action by disgruntled job
candidates. While litigation along these matters is almost unheard of at senior executive
levels, it increases as you go lower down the organizational hierarchy.
To comply with ADA guidelines, selection instruments must limit inquiries to the
candidate’s ability to perform job-related functions. The EEOC’s Enforcement
Guidelines on Pre-Employment Inquiries under the ADA (1994) outlines several critical
points regarding the acceptable scope of inquiries. First, it is acceptable to use
instruments that measure fundamental characteristics of cognitive abilities, interests,
personality, honesty, and habits that provide information that is directly related to the
successful performance of a job. Instruments that measure such things as psychoses,
neuroses, physical or mental disabilities or other pathological issues, however, are
prohibited in the pre-offer stage of a selection process. Medically oriented tests may only
be given after a job offer has been made.
Secondly, it is not acceptable to use psychological assessment instruments
designed for clinical purposes that are normed on populations of individuals with some
type of clinical disorder8. It is advisable to use non-clinical assessment instruments that
are normed on a population of individuals that is consistent with the population and
purpose for which the instrument is to be used (e.g. The New Workforce Inventory 9 was
normed on a broad based population of normal, working individuals. Psychopathology
was not a criterion of the population. As a result, The New Workforce Inventory can only
measure traits, abilities, and attitudes that are related to job performance. It is blind to
psychopathology). Finally, while an instrument may not be designed as a medical test or
assessment, if it is to be used at the pre-offer stage, it is important to ensure that none of
the items (questions) within the instrument constitute a "medical inquiry" concerning the
existence, nature, or severity of a disability; (e.g. “At times I have been so anxious, I have
sought professional counseling.”)
To further minimize legal risk, employers should employ a standardized selection
process for each position or job category. All candidates for the same position should
take the same test or assessment at the same point in the selection process. Although it is
not necessary to test everyone within the same job category, it is necessary to test
everyone who reaches the same point in the process where tests or assessments are used.
The application of the test should not be used selectively as a means for either justifying a
candidate, when another has not had the opportunity to take the test(s), or to adversely
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affect someone who has taken the test(s) in favor of another applicant who was not
required by the employer to take the same test(s).
Employers must insist on utilizing a selection process that provides a fair and
equal opportunity for each candidate to be selected. Under the Uniform Guidelines on
Employee Selection Procedures (1978), the impact of an assessment measure must be
measured to ensure that a disproportionate number of individuals in protected classes
(based on race, sex, or ethnic background) are not adversely impacted. Tests that have an
adverse impact on protected groups may only be used if there are no alternative means
with less adverse impact, and if the competency measured is a clear business necessity.
Proper administration of assessment instruments is essential to obtaining valid or
meaningful scores for test takers and avoiding any increased legal risk. When
administering assessment instruments, it is important to ensure that every staff member
who will administer interviews, tests, or analyzing results is educated about how to do so
properly and maintain appropriate confidentiality. To comply with ADA guidelines,
companies must ensure that testing conditions are suitable for all test takers. Reasonable
accommodation should be provided in the assessment process for people with disabilities.
In order to maintain the integrity of the assessment instrument, the test items must
be kept from the test taker until the time of the actual test. Once the tests are completed
and scored, it is always critical to maintain confidentiality of assessment results.
As noted earlier, selection tests should always be administered and interpreted
along with a formal, structured, behavior-based interview. Informal and unstructured
interviews are commonly used when hiring senior level managers and executives, but
they increase the employer’s risk of being sued for discriminatory hiring practices,
particularly when given to candidates for lower level positions.
Behavior-based interview questions for executive and non-executive positions
should be developed by examining successful performers or their supervisors. Critical
incidents, or specific problems or challenges the job presents form the basis for the
behavior descriptions. A job description should be developed based on the description of
job behaviors. As with test instruments, behavior-based interviews should avoid
questions relating to the candidate’s marital status, age, religious identity, ethnic heritage,
family status, or status in any protected group or class.
Sophisticated behavior based interviews include a variety of types of questions
tapping the candidates understanding of job-related terminology, causal relations, and
awareness of important ethical issues. Hypothetical questions about how they would
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handle a specific situation, a specific interpersonal situation, and why they would respond
in such a manner, are also important interview tools.
Giving Developmental Feedback.
Like most processes in the workplace, people’s ultimate response tends to be
based on their perception of being treated with respect and fairness. Just as a company
can obey all of the legal guidelines around layoffs, only to elicit a negative backlash by
appearing thoughtless and stingy about severance, so leaving people with no idea of their
performance in the assessment can compromise the assessment process. For internal
candidates in a selection assessment process, the end of the process should be recognized
as an opportunity for strengthening the organization. Armed with clear, less subjective
data, the sponsors of the assessment process can now offer all candidates the benefit of
feedback to improve their chances for selection the next time, and can boost their
performance by outlining a specific developmental agenda. Giving such feedback
provides candidates, who have not been selected, the opportunity to know about their
performance rather than speculate. Most legal and morale problems occur because
candidates who have not been selected imagine a process that is discriminatory and
unfair. Left to their own, most people will imagine a process that is prejudicial. Offering
constructive developmental feedback can allay such suppositions.
Job applicants vary widely in their knowledge, skills, abilities, interests, work
styles, and other personal characteristics. These differences systematically affect the way
people perform or behave on the job. Companies employ a range of psychological
assessment instruments to collect accurate information on job-relevant characteristics that
are not often recognized by simply observing the applicant. This information helps assess
the fit or match between people and jobs and has proven to have a significant return on
investment for employers.
Whether assessing job candidates for a job as the company’s CFO or as a cashier,
potential legal vulnerabilities created by the use of selection assessments can be lessened
by employing assessment experts to construct assessment protocols with appropriate
safeguards. These safeguards include conducting appropriate job analyses or job
modelings, developing accurate job descriptions that adhere to ADA guidelines, selecting
test instruments that assess for job-related characteristics and have been proven not to
have any adverse impact, using a variety of tools to measure skills, abilities, and other
job-relevant characteristics, and basing hiring decisions on the aggregated data rather
than a single data point.
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1. Collins, J. (2001) Good to Great: Why Some Companies Make the Leap . . . and
Others Don’t, Harper Business, New York
2. 2001 American Management Association Survey: Skills Testing and
3. University of Florida Center for Studies in Criminology and Law’s 2002 National
Retail Security Survey,
4. Prien, E.P., Schippmann, J.S. and Prien, K.O. (2003) Individual Assessment: As
Practiced in Industry and Consulting, Lawrence Erlbaum Associates, New Jersey
5. Costa, P.T., Jr., and McCrae, R.R. (1992) NEO-PI-R: Professional Manual.
Psychological Assessment Resources, Odessa, FL
Howard, P.J. and Howard, J.M. (2001) The Owner’s Manual for Personality at
Work, Bard Press, Marietta, GA
6. Neither the EEOC nor the Office of Federal Contract Compliance validates pre-
employment assessments. Their authority extends to auditing or investigating
unacceptable procedures when a discrimination charge has resulted from adverse
7. The publisher of the most popular personality test in use, the Myers-Briggs Type
Inventory (MBTI), warns users that this instrument is not valid as a pre-
employment screening tool.
8. The Minnesota Multiphasic Personality Inventory (MMPI), was designed for
diagnosis of psychological disturbance and is not appropriate, or legal, for use in
9. The Kingwood Group (2001) The New Workforce Inventory,
DANIEL R. FISHER, Ph.D. is Director of Assessment at Worklab Consulting, LLC,
where he specializes in evaluating senior level executives for selection and
ROBERT J. NOBILE is a partner with the New York City office of Seyfarth Shaw,
where he specializes in employment law. He is also a member of the graduate faculty of
St. Joseph’s college in New York. He is author of Guide to Employee Handbooks,
Human Resources Guide, The Guide to HR Policies and Procedures Manuals, and
Essential Facts: Employment, all published by West Group.
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