February
2005 - Testing for redundancy
During the mid 1990s when occupational
psychologists made their first tentative attempts
to use psychometric testing in selecting people
for redundancy, the move created an uproar both
inside and outside the testing industry.
Southwark Council and Anglian
Water, two employers that introduced these measures,
both attracted strong criticism from trade unions
and some psychologists. In the face of this reaction
the occupational psychology profession backed
away from the controversy. Few could be found
to defend the practice and the consensus seemed
to be that testing people for redundancy was a
bad idea.
Behind the scenes, however, some
companies continued to explore the use of testing
within the processes they used to decide who should
stay and who should go, particularly among groups
of employees whose job responsibilities would
change markedly in post merger reorganisations.
For the first time in about 10
years these processes came out of the closet during
a debate at the British Psychological Society’s
recent annual conference of occupational psychologists.
At the centre of the debate was
the use of objective assessment, including psychometric
tests, in a series of reorganisation programmes
at the Royal Mail Group where some 34,000 jobs
have been shed in the past three years.
The job-shedding followed the
appointment of Allan Leighton as chairman, who
inherited an organisation that was losing about
£1.25m every day. Today the fortunes of
the group have been reversed – it is now
making profits of about £1.25m a day. The
turn around is all the more remarkable for the
way that restructuring appears to have been achieved
with relatively little dissent among staff, no
compulsory redundancies and no industrial tribunal
cases.
The Royal Mail reorganisation
required urgent measures. The state-owned business
was haemorrhaging capital. Services would need
to be reorganised with the disappearance of thousands
of jobs and creation of others. A team of assessors
and occupational psychologists headed by David
Thompson, chief psychologist, needed to act quickly
but where could they start? The appraisal system,
which might have been seen as a reliable source
of employee information, was nothing of the sort.
Staff appraisals were characterised
by inconsistent application and manager bias.
Where some appraisals may have rated people on
the basis of clear and measurable objectives,
others were compiled in a more subjective way.
“The HR department files
them away and no-one ever looks at them. With
200,000 people, a big problem for us was actually
finding all the appraisals,” says Mr Thompson.
“In fact I have yet to come across any organisation
that feels confident of its employee performance
data except for those with sales forces that tend
to be measured to death,” he says.
An alternative route was to gather
new sets of data using psychometric testing, interviews
and role simulations. For one of the larger exercises
The Royal Mail turned to a personality test published
by SHL, the UK human resources group.
James Bywater, SHL’s product
group manager, understood the sensitivity surrounding
the use of testing. “The use of tests in
such exercises was going on but organisations
were pushing the issue under the carpet because
they found tests uncomfortable,” he says.
The biggest objection, he decided,
covered the use of assessment in directly choosing
individuals for redundancy. “We were not
in favour of that,” he says. “ But
a more considered approach that brought objective
assessment to see who would be best fitted for
new and often quite different roles, we thought
had some advantages.”
One advantage, he says, is the
way that the inclusion of neutral assessors and
formal assessment can help to avoid decisions
based on favouritism or old antagonisms between
managers and staff. “The view was that any
kind of process that was seen to be objective
had to be a good thing,” he says.
The Royal Mail did not use tests
for all of its redundancies. None of the unionised
frontline staff was subject to assessment. Large
staffing volumes and natural wastage made this
unnecessary. Among managerial staff where psychometrics
were used, some staff volunteered for immediate
redundancy. Overall, testing or other forms of
objective assessment were used in about a third
of the redundancies.
Some of the most drastic job
cutting involved the human resources department
which was asked to remove £50m from its
cost base, representing about 85 per cent of the
jobs. This left a large pool of people deciding
whether they would accept redeployment or whether
they would prefer to leave.
For many Royal Mail staff who
were re-deployed the move amounted to a demotion.
In those cases salaries were not reduced but were
held on a “mark time” basis. People
working under this arrangement do not get automatic
pay rises until their pay has come in to line
with their lower job grade.
Looking back at press reports
of the Southwark and Anglian Water cases in the
1990s it is clear that most of the criticism surrounding
these cases appeared to centre on the direct way
that tests were being used. There were also questions
of relevance.
One of the Southwark council employees, for example,
revealed she was asked to give her views on religion,
her relationship with her parents and her attitude
to dirty jokes.
Even psychologists at SHL were
raising concerns about the use of tests at the
time. “In a redundancy situation you will
already have data on an employee’s job performance;
you don’t need a prediction,” said
one of its psychologists. Another insisted that
tests should not be used in isolation.
These comments, however, are
not at odds with the Royal Mail experience. Its
psychologists took care to select tests for their
relevance and melded them with other forms of
assessments. Moreover they used tests precisely
because of the inconsistency of existing performance
data.
A more difficult issue where
the possibility of redundancy may be looming at
the back of such assessment exercises, is what
is known as the “ultra high stakes”
phenomenon. This occurs when, because of a potential
job loss, some candidates may be less than candid
in the way they complete their tests.
Cross-referencing at interviews
or in other support exercises, therefore, must
play a crucial role, says Mr Bywater. “Where
interviews involve an experienced operational
manager and a consultant psychologists they can
take the candidate through their profile and look
for evidence of the behaviours that emerge,”
he says.
Perhaps the most valuable outcome
of the Royal Mail assessments has been a set of
“top tips” that would make excellent
guidelines for similar assessment exercises in
future. These include ensuring that past performance,
in most cases, is given more weight than potential
performance and that the exercise is balanced
to avoid an overload of information that is costly
and time consuming to process.
Just as important is a reminder
that any process should be defensible legally,
to those involved and to the scrutiny of the press.
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