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Student Number: 44814852
Student Name: Ahneesh Valodia
Organizational and Industrial Psychology
Industrial Psychological Assessment (IOP4861)
Assignment 2: 581995
September 2015


Table of Contents

Application of psychological assessment

2.1 Assessment at the individual level
2.2 Assessment at the group level
2.3 Assessment at the organizational level


Managing psychological assessment to ensure ethical and fair practices

3.1 The HPCSA
3.2 Appointment and competency requirements of a psychometrist


Development of fair and unbiased psychological assessment measures

4.1 Steps of test development
4.2 Psychometric characteristics


Competency-based assessment

5.1 The value of competency-based assessment
5.2 Drawing up a competency framework


Assessment center

6.1 Proposal of an assessment center
6.2 Fundamental aspects of an assessment center policy document





1. Introduction
Psychological assessment, a scientific discipline, has been of indispensible value to organizations and
their success. This essay explores the use of psychological assessment for Boston Bank Pty (Ltd) and
provides guidelines as to how psychological assessment should be practiced to ensure fair and
defensible testing in a court of law. This essay will conclude with a look at assessment centers through
which a proposal of the assessment of leadership potential will be explored.

2. Application of psychological assessment
2.1 Assessment at the individual level
Moerdyk (2014) says that within the domain of human resources, selection can be considered the most
important reason for psychological assessment. Moerdyk (2014) explains that selection is the process of
finding the most appropriate “people to meet the current and future manpower needs of the
organization”; he further explains that selection is the “process of matching people to job requirements
in order to meet organizational objectives” in both the current and the long run. Other uses of
psychological assessment such as promotion, transfer, placement, can all be grouped as selection as
these three aspects all imply the placement of people in specific areas within an organization (Moerdyk,
Bartram (2004) says that assessment is carried out by organizations as a way of “measuring the potential
and actual performance of their current and potential future employees.” Bartram (2004) goes on to
argue that measurement is important because it allows organizations to act in a tactful and strategic
manner in order to increase their effectiveness.
Supporting this, Moerdyk (2014) explains that it is imperative to have the right number of competent
employees at a time when they are needed. Factors such as values, interests, motivation, the ability to
communicate well with others and conscientiousness all affect job performance (Moerdyk, 2014). Thus,
these factors should be taken into consideration during the assessment process and the information
gained here can assist human resource personnel in proper placement of employees so that they are
able to make the most of their abilities (Moerdyk, 2014).
In addition to selection, Moerdyk (2014) says that the identification of the training and development
needs of individual staff members is considered to be an important area of assessment for
organizations. While it is important for an employee to know his/her own strengths and weaknesses, it
is also within the organization’s best interests to be aware of their employees’ weaknesses as a base
from which they can take steps to address these shortcomings through training and development
(Moerdyk, 2014).
Also at the individual level, promotion and/or transfers to another department are also an important
aspect of assessment, where promotion refers to the movement to a higher-level position and transfer
refers to the movement to another department or position at the same level (Moerdyk, 2014). While
assessment is a great source of information to aid these decisions, formal once -off assessments making
use of tests and techniques such as assessment centres should only be used when there is not enough
information about the individual on which to base a sound decision (Moerdyk, 2014). Moerdyk (2014)
further says that the longer an employee has been with an organization, the less important the once-off

assessment becomes, and more emphasis is placed on the employee’s track record, performance
appraisals etc.
An area where assessment may not be psychological in nature but also of importance is that of
performance management (Moerdyk, 2014). Performance management, according to Moerdyk (2014),
is the process whereby a manager and his employees reach an agreement about KPAs (Key Performance
Areas) that need to be met. Assessment becomes a matter of importance here as management needs to
assess the extent to which these targets have been achieved. As noted, assessment within the area of
performance management may not be psychological in nature but many of the problems of reliability,
validity and fairness (discussed below) apply here and thus this area of assessment needs to be taken
seriously and needs to meet the minimum psychometric criteria (Moerdyk, 2014).
2.2 Assessment at the group level
Moerdyk (2014) says that as much of an organization’s success is dependent on the way in which
groups, and specifically teams, work together, it is of great importance that aspects such as team
functioning, industrial relations climate and general mood of the organization are assessed.
Psychological assessment can be applied in the process of team formation as the information obtained
helps team members understand what their membership consists of, so that different team members
can help magnify the strengths and cover for the weaknesses of fellow members (Moerdyk, 2014).
Paterson and Uys (2005) briefly touch on this topic and say that information gained from assessment
forms a basis for comparison for team members and each individual can be evaluated against his/her
fellow members. Paterson and Uys (2005) further say that the team members also benefit in that they
are given the opportunity to improve their self-awareness and focus on their strengths; this can only
hold true if the team members are provided with extensive feedback on their individual performances.
In the case of Bostan Bank Pty (Ltd), assessment in this area is of great value as it will help in identifying
employees that exhibit leadership capabilities through team interaction.
The Industrial Relations (IR) climate in organizations is another area of psychological assessment and is
determined by a range of factors such as management practices, the presence and use of various
policies and structures and prior records of the way in which management and workers have interacted
previously (Moerdyk, 2014). Thus, to properly assess the IR climate in any organization, the organization
needs an understanding of the above-mentioned factors and then needs to find various scales for
measuring these aspects (Moerdyk, 2014). Moerdyk (2014) further says that once proper analysis is
made of the possible factors contributing to an organizations IR climate, assessment begins. In addition,
Moerdyk (2014) says that measuring the IR climate is the same as measuring any other kind of attitude
and thus the general technique of drawing up a psychological measure (detailed below) applies here
Lastly, assessment on the group level can be applied in the selection of employees to work abroad
(Moerdyk, 2014). Moderyk (2014) suggests that a proper assessment of people to be appointed to work
in countries with different cultures from their own are required.
2.3 Assessment at the organizational level
Psychological assessment is of great value to organizations as it is rather necessary for an organization
as a whole to continually assess its performance across a wide range of situations (Moerdyk, 2014). The

need for assessment includes various financial indicators such as return on investment, inventory levels
and profits; and in addition, management needs to be informed on more general indicators of
organizational effectiveness such as productivity, safety and quality (Moerdyk, 2014).
Many companies invest large sums of money in the training and development of their employees in
order to maximize on organizational success and reaching objectives (Moerdyk, 2014). Thus,
organizations make a concerted effort to evaluate, through assessment, the effectiveness of the training
and development efforts that they have employed (Moerdyk, 2014).
Paterson and Uys (2005) say that psychological tests provide insight into complex constructs such as
knowledge, skills and psychological attributes which are often hard to measure with other methods.
Paterson and Uys (2005) go on to argue that current tests cover a wide spectrum of measurable areas,
and test-users can choose between different instruments to meet their specific needs.

3. Managing psychological assessment to ensure ethical and fair practices
3.1 The HPCSA
The HPCSA (Health Professions Council of South Africa) is a professional body regulating the psychology
profession to ensure fair and ethical assessment practice in South Africa.
The HPCSA (2006) says that the use of any psychometric test (or measuring device, questionnaire,
technique or instrument) that assesses the cognitive ability or functioning and personality make -up or
functioning, is regarded as being a “psychological act.” Thus assessment, in light of possible harm and
implications posed on those who undergo an assessment process, requires appropriate professional
qualifications, skills and experience. The HPCSA (2006), says that according to the Health Professions
Act, Act 56 of 1974, only registered psychologists are permitted to perform such psychological acts in
relation to evaluation, testing and assessment.
Henceforth and according to the Health Professions Act, Act 56 of 1974, tests, measures, questionnaires,
instruments, etc. that divulge psychological constructs must be used, interpreted, and con trolled by
psychologists (HPCSA, 2006). The HPSCA (2006) further state that certain psychological tests can,
however, be used by psychometrists and registered counselors, and other professionals provided that:


the use of the test has been certified for that category of tester by the Psychometrics Committee
of the Professional Board for Psychology;
the tester complies with whatever restrictions may be placed on the test's use relevant to the
category of test user that he/she is registered as. For example, a psychometrist may administer,
score and preliminary interpret certain psychological tests but not report on the results of such
the tester seeks mentoring from a psychologist where specialist input would enhance the testing
process and the understanding of the test results; and
the tester has been appropriately trained and has achieved the minimum competencies required
to use the test.


In order to maintain a fair and high standard of assessment in South Africa, an extensive list of
prescribed ethical requirements have been formulated, parameters of which include: assessment in a
professional context, appropriate use of assessment methods, informed consent in assessments, test
development, cultural diversity, communication of results, information for professional users,
interpretation and explaining of assessment, test scoring and interpretation services, release of test
data, obsolete tests and outdated test results and lastly, maintaining test security (Department of
Health, 2006).
While the official Department of Health (2006) document, “Form 223”, is a rather extensive list, this
assignment will include but a few examples as listed by Department of Health (2006), such as:




Assessments, recommendations, reports and psychological diagnostic or evaluative
statements by a psychologist shall be based on information and techniques su fficient to
substantiate his or her findings.
A psychologist may provide an opinion of the psychological characteristics of a client only
after he or she has conducted an examination of such client that is professionally adequate
to support his or her findings.
When a group assessment is conducted, the psychologist concerned shall declare the limits
to his or her findings taking into account that “limits” implies that the score of a
group has less reliability and validity than an individually-derived score.
A psychologist who develops and conducts research with tests and other assessment
methods shall use scientific procedures and current professional knowledge for test
design, standardization, validation, reduction or elimination of bias, and recommendations
for use.

According to the HPCSA (2006), The Employment Equity Act of 1998 states that:
Psychometric testing and other similar assessments of an employee are prohibited unless the
test or assessment being used:
(a) has been scientifically shown to be valid and reliable;
(b) can be applied fairly to all employees; and
(c) is not biased against any employee or group
Van de Vijver and Rothmann (2004) note that this law requires psychologists to be proactively involved
in providing evidence that psychological assessments are to be fair and unbiased - as such, the EEA is
instrumental in regulating guiding fair and ethical assessment in the South African work context.
3.2 Appointment and competency requirements of a psychometrist
According to the HPCSA (2014), “psychometrists are psychological practitioners with special expertise
in the use of psychological tests.” Psychometrists “perform assessments and also contribute to the
development of psychological tests and procedures in a variety of contexts, including educational, work,
career, health and Non-Governmental Organizations, Non-Profit Organizations and community.”

From the above explanation, it is clear that the appointment a psychometrist comes highly
recommended for Bostan Bank Pty (Ltd). The use of, and results from, psychological tests in the domain
of leadership would provide great insight into the leadership potential (or lack thereof) of candidates.
From the above explanation and the complex nature of psychometrics, it can also be seen that it is
imperative that psychometrists have a list of competency requirements to which they should adhere.
HPCSA (2014), Form 94, says that psychometrists are to adhere to the following scope of practice:


performing assessments and contributing to the development of psychological tests and
measuring psychological functions including cognitive, interest, aptitude, and personality;
identifying clients requiring more sophisticated or advanced psychological assessment and
referring such clients to appropriate and registered professionals;
providing feedback to clients on the results of psychological assessments;
participating in policy development in respect of psychological assessment;
participating in the design, management, and evaluation of psychological assessment
procedure in diverse settings and organizations including but not limited to health,
education, labor and correctional services;
participating in or conducting needs analysis regarding psychological assessment in diverse
settings and organizations, select/compile appropriate batteries of tests;
training and supervising Registered Counsellors, and Psychometrists in supervised practice in
psychological measurement;
conducting psychological practice and research in accordance with the Ethical Rules of
Conduct Practitioners registered under the Health Professions Act, 1974;
adhering to the scope of practice of Psychometrists;
designing and implementing research which contributes to the development of psychological
assessment instruments, and reporting on such research; and providing expert evidence
and/or opinions.

4. Development of fair and unbiased psychological assessment measures
4.1 Steps of test development
In ensuring fairness in psychological assessment, it is rather important to observe people in a very
controlled light (Moerdyk, 2014) and as such developing a test should follow certain steps as suggested
by Moerdyk (2014) below:
1. Conceptualizing. Here ‘what are we looking at?’ is asked. Gaining a clearer understanding of the
interest of the domain is key here i.e. clarification should be made on what is being looked for
(Moerdyk, 2014).


2. Operationalizing. Here ‘how would this show itself?’ or ‘what are the indicators that the
particular phenomenon is present’ is asked. Using the various components and dimensions
identified in the conceptualization phase, indicators or statements can be formulated to reflect
these (Moerdyk, 2014).
3. Quantifying. Here ‘how can we attach a value to what we have observed?’ is asked (Moerdyk,
4. Pilot testing. How does the measure behave in practice? This can be ascertained by
administering the test to a sample group of people similar to those for which the test was
created (Moerdyk, 2014).
5. Item Analysis. Here the question of ‘does each item contribute properly to the total score?’ is
asked (Moerdyk, 2014).
6. Norm development and interpretation. Here ‘what does this score mean?’ is asked (Moerdyk,
2014). Moerdyk (2014) suggests that a basis for interpreting the results obtained should be
formulated – this means that a person’s score is compared against an appropriate norm (dealt
with in the next section).
7. Evaluation of the technique. According to Moerdyk (2015), here, questions such as ‘is the
assessment process consistent and accurate?’ i.e. ‘is it reliable and valid?’ is asked.
While the above 7-step process may seem rather straightforward, it is imperative that Boston Bank Pty
(Ltd) look at ways of enhancing the development of fair and unbiased tests, and as such they need to
develop measures that adhere to psychometric characteristics – the topic of the next section.
4.2 Psychometric characteristics
Two important psychometric properties can be regarded as Validity and Reliability. According to
Moerdyk (2014), the validity characteristic of an assessment technique is the extent to which the
technique measures what it claims to measure. Moerdyk (2014) further explains that validity is
concerned with the extent to which the measure is free of irrelevant or contaminating influences.
Reliability on the other hand, according to Moerdyk (2014), is a measure of the consistency with whi ch
the measuring instrument measures. Moerdyk (2014) suggests that when considering the reliability of
an assessment measure, it is important to identify and account for the sources of various errors that can
during an assessment process. These include errors within the assessment technique/measure, those
within the assessment process, those related to the individual being assessed, and lastly those related to
the administrator or scorer of the assessment process (Moerdyk, 2014).


Other fundamental psychometric properties of psychological assessment include that of norms and
standardization. Barnard, Grobler, May (2015) say that “standardization is the process of testing a group
of people to see the scores that are typically attained on the measure.” Barnard et al (2015) further
explain that an individual can then compare his/her own score to the standardized group’s score
(referred to as a norm) when using the standardized test. Barnard et al (2015) say that these ‘norms’ are
empirically obtained by ascertaining how well a representative group of individuals performs the task in
Bias and fairness are also two psychometric properties that need to be carefully considered. Moerdyk
(2014) regards bias as the ability of an assessment procedure to predict future behavior, regardless of
group membership. According to Bedell, Van Eeden and Van Staden (1999), test bias is determined by
means of objective and statistical indices that show whether the test score has the same or a different
meaning, or implications for different subgroups. Fairness on the other hand, according to Moerdyk
(2014), can be defined as “the lack of random error or systematic bias in the assessment technique
and/interpretation thereof.” Moerdyk (2014) further explains that a technique can be considered fair if
it treats people with similar attributes equally and if it differentiates between those who have differing
attributes. Barnard et al (2015) say that it is important to distinguish between these two properties; bias
– a technical and statistical property that can be measured objectively and fairness – which is concerned
with a more subjective and contextual assessment.
In practice, there a few ways in which to enhance fair assessment with regards to test development. Van
de Vijver and Rothmann (2004), suggests documenting in the test manual “how the test has been
made suitable for usage in a multicultural context and to describe in the manual which
aspects of the test administration are particularly important when the test is applied in a
multicultural context.” Van de Vijver and Rothmann (2004) also suggest developing cultural specific
norms of score adjustments of members of minority groups. Van de Vijver and Rothmann (2004) say
within group norming (meaning, establishing norms per cultural group) have been proposed as a type of
score adjustment procedures. Lastly and briefly, Van de Vijver and Rothmann (2004), suggest that
another approach to enhance fairness in respect of test development is to study the factors that
threaten the validity of multicultural assessment practices in light of improving their quality.

5. Competency-based assessment
5.1 The value of competency-based assessment
Heinsman, De Hoogh, Koopman, Van Muijen (2007) say that competencies have become the “leading
construct in many different human resource practices, such as recruitment and selection, career
development, performance management, and the management of change.”
Moerdyk (2014) says that the most obvious advantage in using a competency-based assessment is that
it is based on observable behaviors. Heinsman et al (2007) cite the work of Feltham (1992) and say that


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