Integrity at Work Tool - IAW

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Integrity at Work ToolImproving attendance, retention and productivity through

personality

IntroductionIntegrity and honesty at work are hot topics for management and HR specialists. Annual costestimates of employee theft fall within the region of $20-50 billion in the United States. Indeed,employee theft has been cited as one of the primary reasons for up to 30% of all small businessfailures within the US. For particular industry sectors, employee honesty is a critical issue (e.g.retail, finance, hospitality) whilst in others, an increasingly fragmented and outsourced workforcehas heightened concerns for employee integrity, loyalty and commitment.

Our researchAware of the major impact that workplace honesty can have on organisations' financial success,we set out to investigate the work undertaken by management specialists and psychologists intointegrity and honesty. We soon found that the bulk of research focused on the development of

commercial instruments of dubious value, with little underlying theoretical basis. As a result,we decided to explore the very nature of integrity at work using a range of methods.

Firstly, we undertook intensive interviews with a range of professionals into their personalunderstanding or 'constructions' of integrity using Kelly's Repertory Grid Technique. Thisresearch produced an initial model of integrity which suggested that (a) integrity is a multi-facetedconcept, and (b) some elements of integrity are likely to be closely related to classical personalitytheory (which takes in such concepts as extraversion, stability, openness, etc.)

We went on to develop a psychometric instrument which tapped into each of nine areas ofintegrity, and piloted the tool on over 1,000 adult employees. This process revealed an eightfactor model of integrity, comprising the following dimensions:

Element of Integrity Low Score High Score

TrustVigilant of others agendas;cautious/suspicious of othersintentions.

Always trusting of others; belief thatother people are entirely trustworthy.

EmotionProne to feelings of anxiety, mayexhibit changeable moods; prone todissatisfaction/pessimism.

Content and stable, unlikely toexperience changeable moods;generally optimistic.

Work-orientationPrimary focus outside of work; moreimportant sources of satisfaction than

hard workper se.

Motivated to work hard; primaryfocus on work as a source of

satisfaction/achievement.

PrinciplesFlexible principles; tends not to allowconscience to affect judgement.

Moralistic; rigid principles;conscience plays a definite part indecision-making.

StraightforwardnessCareful with what s/he says toothers; less tolerant of difference;more likely to be reserved.

Straightforward/open with otherpeople tends to speak his/hermind; tolerant of difference.

Reliability Less predictable/reliable; Dependable, somewhat predictable;


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expedite/pragmatic attitude towardsrules.

conscious of rules and regulations.

Social focusFocuses principally on own needsand interests; favours seen as quidpro quo.

Focuses principally on the needs andinterests of others; unconditionallygenerous.

Business focusFavours people-focused approach atwork (diplomatic, accommodating,possibly nave).

Favours pragmatic approach tobusiness (competitive, shrewd, task-focused, possibly ruthless).

So what are the benefits?Research to date has revealed close relationships between dimensions of our psychometricinstrument (provisionally titled the Integrity at Work Tool - IAW) and employee behaviour. Theserelationships are summarised in the following table, with employee behaviours definedimmediately below:

Turnover intentions stated intentions to stay with or leave the organisation over

time; Absenteeism illegitimate absence rates over 12 month period; Organisational citizenship willingness to go the extra mile, help new starters,

seeking ways to improve performance; Commitment championing the organisation externally, investment in the future of

the organisation; Prosocial work behaviours attitudes towards theft, rule-breaking, lateness,

illegitimate absence.

IAW dimensionTurnoverintentions

Absenteeism Organisatlcitizenship

Commitment Prosocial workbehaviours

Trust Emotion Work orientation Principles Straightforwardness Reliability Social Focus Business Focus

Each IAW dimension, then, is able to significantly predict three or more areas of employeebehaviour/performance. For example, employees who report a high level of emotional stability (ahigh score on Emotion):

Are less likely to leave the organisation

Are less likely to go absent without permission

Are more likely to go the extra mile, and help out new employees


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Are more likely to talk up the organisation and feel invested in it Are likely to show a more prosocial attitude towards theft, rule-breaking and

illegitimate absence.

So, the IAW tool can help to:

Reduce turnover

Decrease absence

Increase the number of 'organisational citizens' you employ

Increase staff commitment

Reduce the risk of theft and rule-breaking

What are the applications?We seethe Integrity at Work tool as having significant potential in the areas of employeeselection and development.In terms ofselection, the IAW could be used as part of the recruitment profiling process,providing information on prospective candidates as to their likely 'fit' with the organisation in termsof behavioural preferences and performance in the role. We have already identified a number of

classic competency areas which map directly onto the IAW model framework. Interview promptscould be used during the recruitment process to probe more deeply around candidates' statedbehavioural preferences. The IAW Interview Guide provides interviewer questions around thefollowing headings:Interpersonal style Working style Management style

- Social focus - Business focus - Trust

- Straightforwardness - Work orientation - Emotion

- Reliability - Principles

As far as development is concerned (both individual and organisational), we see the keyapplications as follows:

Performance Management Recommendations - based on an individual's IAW profile,

recommendations can be generated on the performance management issues which maysurface with that employee, i.e. what might be most effectively used to motivate, developand reward them.

IAW Career Drivers Tool - identifies the aspects of a role and a workplace that theemployee will respond to, be motivated by and find fulfilling; it also identifies thoseelements that would be seen as less motivating/desirable for the employee, and thus mayresult in lower productivity.

Succession Management - as part of the succession management process, IAW candescribe and explain individual managers' operating styles, to be considered alongsidetheir experience, capabilities and competencies.

Team Development - The team dynamics report comprises a visual plot of teammembers in each area of their IAW profile to enable the team and their manager toappreciate the individual strengths within the team, thus promoting team understanding,

integration and success.

The next stageAn agreement has now been reached with the Test Agency on production and distribution of theinstrument. During the time to roll-out, the following additional work will be completed:

Additional validation studies within specific industry sectors (e.g. retail, security) - wewould be keen to hear from any organisation who might wish to participate in thisfinal validation project;
http://www.testagency.co.uk/http://www.testagency.co.uk/


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Development of assessment materials including question and answer booklets, manual,software, interview prompts and feedback reports.

Benefits to your organisation in participating in the final stages of the validation projectwould be as follows:

Crucial information on the behaviour and performance of your staff(including

all performance data listed above ); Discounted access to the product when launched

Negligible costs (photocopying only).

Distortion Scales

What is a Distortion Scale?A scale labeled Distortion has been incorporated into these HiringSuite assessments: Personality Plus, Sales Plus, and The Insure

Survey. The questions contained in the Distortion Scale, also called aLie Scale, are ones for which the correct answers are already knownand the applicant must answer the majority of these with the "right"response. The Distortion SCORE refers to the reliability of the results,not the honesty of the applicant. If the distortion scale suggestsdistortion some doubt may be cast upon the openness of the individualin their responses to the other questions (which have no right or wronganswer).

How Important Is It?A Distortion Scale is vitally important in a pre-employment situation. A

low score on this scale suggests that the applicant may have distortedtheir responses in the 'look good" direction. An example would betrying to appear outgoing and competitive for a sales opening. If theassessment asked "Do you like meeting new people?" the applicantknows that meeting new people would be part of the salesperson'sduties so will answer YES, even though it may be against his/her natureto enjoy this type of activity. By using the Distortion score, theinterviewer can gauge if the applicant is trying to "look good" to getthe job.

Accept No Substitutes!

Beware of pre-employment personality assessments without distortionscales! Most of these are Word-Matching (or Choosing) assessmentswhich were originally intended for helping a person become more self-aware of why they ACT the way they ACT. Most give a choice of twowords like OUTGOING or RESERVED. They are often headed by thephrase 'I SEE MYSELF AS.... on one side of a paper above a list ofadjectives and on the other side of the paper with "OTHERS SEE ME


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AS..." above the same list of adjectives. They really work well in selfawareness sessions, but NOT pre-employment!

Why is This So Essential?In self awareness sessions there is no pressure to respond in a

"correct" manner. After all, the exercise is for their own selfattainment, not to get a job! Conversely, job applicants are under atremendous amount of pressure to respond in the "right way" so theycan get the job. Choosing OUTGOING instead of RESERVED seems tobe the most correct answer. Therefore, they will probably markOUTGOING if it will get them the job.

DO All Pre-employment Assessments Require Distortion Scales?

NO. Skills testing, like for spelling or math, do not require Distortion Scales because

there is only one true right answer to each question. For example "potatoe" is alwayswrong and 2+2 always equals 4

Of all the available selection tools, psychological tests have been found to be one of the mostvalid and cost effective means for identifying the most suitable applicants for the job (Schmidt &Hunter, 1998). Indeed, when properly conducted, selection testing can save companies hundredsof thousands of dollars each year. For example, Hunter and Schmidt (1984), using extremelyconservative assumptions, calculated that the US gross national product could be increasedbetween $80 and $100 billion (in 1981 dollars) if selection testing were introduced throughout theworkplace. Clearly, an organization can realize substantial benefits through the use of the ESQ.

As the figure below indicates, 86% of the counterproductive workers failed the ESQ by obtaininga score of 50 or lower.

The following are the key counterproductive behaviors that can cost an organization hundreds ofthousands of dollars annually:

Theft

Turnover

Loafing

Absenteeism

On-the-Job Substance Abuse

Safety Violations

TheftOn average, 44% of all inventory shrinkage is due to employee theft. Employees tend to stealsignificantly more than shoplifters. In fact, 20% to 40% of employees in the retail, manufacturing,

supermarket, restaurant, and healthcare industries report a history of theft.From unauthorized giveaways to friends and family to serious theft (over $100.00), the ESQ wasable to screen those individuals likely to engage in thievery. Individual's who reported stealingfrom their work in the past failed the ESQ.

TurnoverA high turnover rate will result in unnecessary loss of both resources and reputation. In anexample from the healthcare industry (a hospital with 200 beds employing 1200 persons with aturnover rate of 2% per month) Cascio (2000) calculated that the cost of replacing 288 employees
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per year was $2,888,295.52 when all sources of costs were analyzed. The common sources ofthese costs are:

1. Recruitment of replacements.2. Lost productivity associated with the interim period before a replacement can be placed

on the job and the time required for the new worker to get up to speed on the job.3. Costs of training, including supervisory and coworker time spent in formal training.

The ESQ can identify impulsive job applicants, and those with less inclination towardorganizational commitment. In fact, the ESQ has been shown to predict for employee productivityand good citizenship, and therefore would have a substantial impact on overall turnover rates andemployee performance.

LoafingLoafers (those spending an average of 20% of their time engaged in non-work-related activities)scored significantly higher on the ESQ counterproductivity scale than non-loafers (those spendingan average of only 2% of their time on non-work-related activities). A dollar value can be placedon the cost of loafing to the employer using utility analysis (Cascio, 2000). First, it is assumed thatan employee's total compensation value per hour is $23.00, the average total compensation for

all full-time workers in private industry as of March 2001 according to the Bureau of LaborStatistics. Based on this level of compensation, utility analysis indicates that an employee wholoafs for approximately 20% of an eight hour shift will cost an employer approximately $24,500per annum. This amounts to a total cost of $122,500 per loafing employee over a five-year period.Stated differently, using the ESQ to identify and eliminate potential loafers from an applicant poolcan result in substantial cost savings to the employer.

AbsenteeismThere are several costs associated with absenteeism in the workforce, including loss ofproductivity, customer dissatisfaction and costs associated with a temporary replacement. Someindividuals claim to be sick when they simply feel like a vacation day. Chronic absenteeism isprevalent in today's society, in 1998 about 4% of full-time workers in the United States, and morethan 6% of full-time workers in Canada were absent from work (CCH Unscheduled AbsenceSurvey; Statistics Canada). Those respondents who had reportedly taken 'bogus' sick days scorebelow the 50, thereby, failing the ESQ.

On-the-job Substance AbuseThe US Board of Labor estimated the total cost of employee substance abuse falls between $75billion to $100 billion per year. The prevalence of on the job alcohol and drug abuse is alarminglyhigh. Ten percent of employees consume more than five glasses of alcohol in a workday, andapproximately 70% of drug users are employed (Williams-Harold, 1998). To save your company'sresources and reputation, use the ESQ to screen out those individuals who are likely to engage insubstance abuse during the workday. Those respondents who admitted to drinking while on the

job failed the ESQ.

Safety ViolationsThe Insurance Research Council estimates that over 3 million employees experience on-the-jobinjuries per year. While insurance protects businesses from the costs associated with medicalbills, Safety Services of CyperComp state that the costs not covered by insurance are four to fivetimes higher. The following are examples of how these uninsured costs indirectly affect theproductivity and profits of an organization:

1. employee wages (e.g. wages to the injured employee and their replacement);

2. repairing damaged equipment or products;
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3. time invested in investigating the accident and filling out paperwork;

4. overtime by other employees and supervisors to compensate for the loss of production;

5. increased insurance premiums;6. the costs associated with a possible lawsuit (e.g. lawyer's fees, settlement, bad publicity.)

Disregard of safety regulations can result in serious accident or death to the employee orcoworkers and in substantial costs to the employer. Furthermore, adherence to safety regulationsis an indication of employees' willingness to follow organization rules, procedures and policies.There is a direct relationship between frequency of safety infractions and ESQ scores. Those whomost frequently reported safety violations failed the ESQ.

ConclusionAccording to the Society of Human Resource Management more than 50 % of potentialemployees misrepresent themselves on their job applications. It is therefore the organization'sresponsibility to ensure the hiring of productive, dependable employees. The ESQ can save anorganization both time and money by making their employee selection processes more efficientand effective

INTEGRITY/HONESTY TESTS

Integrity tests predict the broadcriterion of "organizationallydisruptive behavior (theft,disciplinary problems andabsenteeism)

Honesty operationally defined asthe absence of theft in the

workplace.
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designed to identify jobapplicants who will not steel or

otherwise engage incounterproductive behavior onthe job.

Two types of integrity test

1. Overt Integrity Test applicant clearly understandsthe intention of the test.

First Section measures"Attitude" towards theft andother forms of dishonesty

Second Section deals with

"admissions" of theft otherillegal activities.


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The responses to such tests aredistorted to form favorable

impression (social desirability).

2. Personality based measures makes

no reference to theft.

assess conscientiousness andemotional stability factors

Other PredictorsInterview :

InterviewFormat

Types ofQuestions.

Applications

1.Unstructured

Few, if any,planned

questions.

(are made upduring theinterview)

Useful whentrying to helpintervieweessolve problems orunderstand whythey are not right


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for a job

2.Structured

Apredeterminedchecklist ofquestions,

usually asked ofall applicants.

Useful for validresults especiallywhen dealing withlarge number ofapplicants.

3. Mixed A combinationof 1 and 2, thatresemble whatis usually donein practice.

Realisticapproach thatyieldscomparableanswers plus in-depth insights.

4.Situational

Questionslimited tohypotheticalsituations.Evaluation is onthe solution andthe approach of

the applicant.

Useful tounderstandapplicantsreasoning andanalytical abilitiesunder modeststress

5. Stress A series of harsh, rapid-firequestions

Useful forstressful jobs,such as handling


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intended toupset the

applicant

complaints.

Limitations: Illusion of validity (weare not good judges of people, butwe think we are) and influence ofbarriers of effective personjudgement (personal bias, haloeffect, constant error leniency,projection, stereotyping)Research findings (interview

methods)

1. structured interviews forselecting entry level productionemployees generated data thatwere reliable (r = .88) and valid

(rs between .34 and .56) (Campion etal., 1988)

2. interviewers judgements for selecting

seasonal retail sales clerks yielded strong


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validities (rsbetween 0.34 and 0.61) (Arveyet al., 1987)

The interview is valid for makinginferences about applicantssociability and verbal skills, andwork motivation.

Assessment Centers are"group-oriented, standardizedseries of activities which provide abasis for judgments or predictionsof human behavior believed or

known to be relevant to workperformed in an organizationalsetting" (Finkle, 1976, p.861).Central characteristics:

1. assesses of evaluated ingroups2. by groups of assessors


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3. using a variety of measurement

techniques

4. to determine the applicantssuitability for managerial positions

Measurement techniques used:

1. objective paper-and-pencil

tests;2. projective tests such as Thematic

Apperception Test (TAT) (McClelland, Atkinson,Clark, & Lowell, 1953; Murray, 1938)

3. Interviews4. Peers and other candidates ratings;

and

5. Situational exercises such as

leaderless group discussions and in-

baskets

Raters (assessors) evaluate theassessees on a number of


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performance dimensions judgedrelevant for the job (leadership,

decision making, practicaljudgment, and interpersonalrelations skills)Research findings

Several research findings attest tothe validity of assessorsjudgements

(these positive results) can beattributed to the fact that they

relied upon candidatessubsequent rates of promotionas the criterion (London & Stumpf, 1983;

Turnage & Muchinsky, 1984).

implies that assessment centerratings are less predictive of jobperformance when the criterion


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is some other measure ofperformance.

Work Samples and SituationalExercises

Work sample - present theapplicant with opportunities toperform small, manageablesegments of job tasks or duties.

prediction is more

straightforward. high content validity

problems:

time consuming and expensiveto administer.

The focus is on applicant's capabilities atthe time they are being considered for

jobs (ignores potential to acquire


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important skills through training or on-

the-job experience)

Solution to the second problem -Miniature Job Training:-the job seeker is trained toperform a sample of tasks andimmediately following the training,

his ability to perform this task ismeasured.Assumption - a person who candemonstrate the ability to learnand perform on a job sample will

be able to learn and perform on thetotal job.Situational Exercises - assesproblem solving ability

Eg. Inbasket Test - "in-basket" filledwith memos, telephone messages,


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short reports, and other documentsthat demand manager's attention.

observers record applicant'spriorities as they undertake thevarious tasks.

Research findings

A review of the psychometricproperties of in-basket measuresreported "marginal" evidence ofvalidity (Schippmann, Prien, & Katz, 1990) -

suggested that valideity improveswhen orgnaizations specificallydesign in-basket exercises.Validity analyses of strength testsand tests of other physical abilities

have produced inconsistent results.


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To sum, we have only begun toexplore the potential of situation

test to predict job performance.Letters of RecommendationThis method takes into accountother people's (usually a current

employer, professional associate ora personal friend) opinions ofapplicant's qualifications, jobrelated abilities, and experience.

Available research does notsupport the popularity of thismethod

meta-analyses revealed average

validities ranging between .16and .27(Hunter and Hunter, 1984). Evidence concerning the validity of peer

ratings is more encouraging (.49 -


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promotion, .49 supervisor's ratings and .

36- training success)

Peer ratings seem to be promising,particularly in military settings.

New and Controversial Methods ofAssessment

Drug Testing Polygraphy or Lie Detection

Graphology

Tests of Emotional Intelligence

Evaluation of PredictorsFour standards that are useful forcomparison of different predictors:

1. Validity - the ability of thepredictor to forecast criterionperformance accurately


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2. Fairness - the ability of the predictor

to render unbiased predictions of job

success across applicants in varioussubgroups of gender, race, age, etc.

3. Applicability - whether the method

can be applied across the full range of

job and applicant types.

4. Cost - cost of implementing the

method.

PERSONNEL DECISIONSHuman Resource Management -

Operative Functions

Procurement: recruitment,selection and placement

Development: training and development

Compensation: compensate equitably Integration: integrating individual,

organizational and societal needs


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Maintenance: maintaining the

willingness of able employees

(motivation) Separation: sending the individuals back

to society.

Recruitment: - the process ofattracting people to apply for a job.

yield pyramid recruitment and selection process is

mutual - both companies and applicantsare engaged in assessing the degree of fit

with each other.

Integrity at Work Tool - IAW

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