Why psychometric grading does not work- a relook from Thane HR Group session 15 December 2017 by Ramkumar

Leave a Comment always feel proud to host and promote program whose contents are high in quality and beneficial for society and we always feel proud to promote Thane HR Group event.

To our readers, who may not be aware of Thane HR group, Thane HR group is Thane's oldest and only not for profit HR forum. It was founded 22 years back with the aim to unite HR professionals from Thane and nearby area to network and build the capacity of HR professionals and to create an environment of personal and professional development. It is founded by Mr. Anil Kshatriya, Director, AK Placement Services Pvt. Ltd. and other investor veterans and with the time, many of them have become inactive.

What was the event about?

This was the 4th event that we, was promoting. The topic was interesting, fascinating and challenging our beliefs. When we hear the word psychometric, a niche area of psychology related to personality, leadership, hiring and employee development. Mr. Ramkumar, ex-Executive Director, ICICI Bank shared his real-life experience about work, profile and how a psychometric assessment tool and scores are not a determiner of the suitability of someone for a specific position and why ICICI Bank never involved any external consultants for such assessment and decision making.

The bigger problem with people in HR function

He beautifully explained why we become the victim of such consultants selling psychometric tools. Most of the HR professionals are not good in numbers and do not understand statistics and when other functions start showing numbers, data and then to overcome our own weakness, we present the number with the psychometric tests showing X number of people are not capable of holding the leadership position, success in the job. He rubbishes this with his own life experience at ICICI, how they had hired a consultant and the consultant had shown that none of the people in the leadership role can succeed. They decided to scrap the result and it was a good decision.   

What HR really need to do for a successful role?
He advises

  1. Learn to take a stand. Beleive in your employee's core strength. Take sides for them.
  2. Be an agile learner. Accept the challenges. Handle the role you never did before. Learn other business function and devote it. He explained how he accepted the challenge and started evaluating credit proposal to understand and asked people to rate him. He succeeded within a short span of time. 
  3. Ask for help. Be a learner. Ask people that you want to learn something beyond your role. People will be there sure for help.  
  4. HR should know everything about the company products. He gave example from his previous team member Sunil. Sunil heads retail business in L&T and moved away from HR role. Knowing about the products and eagerness to learn beyond your role make it possible.
  5. Doing 2 years particular course  (like MBA) or 4 years course (like BE) doesn't make you what you are. Its all about how you are ready to take challenges and open to learning things. He gave his initial HUL example. He was not an engineer but still headed production function.   
  6. HR should be able to understand the balance sheet and various financial parameters such as capital, leverage, profitability, and cost. HR use psychometric numbers as they don't understand financials so come with such a number which finance does not understand.  

Is he completely against psychometric?
He clarified, he is not. He is against the quantifying it and giving a conclusion that how someone cannot succeed in a role based on the score findings. His emphasis was on profiling. Everyone has specific traits and these traits have to be collected and made profiling. Such profiling can help people to place in the right role. Statistics of psychometric never shows leadership ability, demand before you buy. You can describe the study and predict human behavior that's sufficient. To question this, you need to have the statistical ability.  To be judgmental about other person using a tool is questionable and deciding their future is fraudulent and not to be approved better to say We made a judgment and that can go wrong. 

What is to be done if we should not use Psychometric tools?
The audience asked them the solution. He explained beautifully
He advised using tools like FIRO B, 16 profile etc as they do not quantify the behavior. He questioned fundamentally questioned the validity of such tests.  On success, validity, and reliability of psychometry tests, he confirmed that when hiring is done or decisions are made, 1 in 3 such calls right. The results are wrong and unsure. When we hire just with the interview predictive validity is 0.1. When we interview and other tools, the validity is just 0.5. There is no way to go your hiring completely right.   

Criticism of Assessment Centre
We often see large organisation using Assessment Centre. He criticise it in following way
Assessment Centre's fundamental problem: He said the potential of someone can be assessed not measured. We must understand how and why assessment centre took birth. Assessment Centre came after the second world war. As an impact of the war many young officers died, who could become 2 star, 3 star or 5 star ranked officers or a lieutenant, a colonel and a major. measuring was difficult and there was no track record who martyred. To solve the problem, they made a narrow band for a period of  1 months to 7 years. For succession leaders were required and to identify hurdles were created, people were observed. The focus was on their behaviour and who in a loosely simulated behaviour traits and characters and on the findings, it was decided who should become what (handling pressure thinking, feeling etc.). It was created when track records of the officers were not available. When you have track record available of your staff, why do you need Assessment Centre?  It is because HR never took the risk to be accountable, gave the excuse to blame assessment centre. 
In Assessment Centre, you need an experienced people in the similar field who knows the job exactly. How can it be reliable and valid when a 28 years old person from a consultant side can assess a CEO?  People who have no clues about the job of people assessing people in Assessment Centre. When you are in emotional condition, sinking feeling like someone suffering from, you have a different behaviour. So these psychometric tests including AC cannot determine how one will react when he has a serious emotional condition. Imagine about bankruptcy rumour about ICICI Bank and people lining up outside ATMs across India. Can you imagine a leader to the behave same as in normal circumstances? 

He even challenged validity and reliability of so-called CAT, GMAT and such score used for deciding one's suitability for the management program.

After gaining round 5 years of work experience, people become a great learner. Use the psychometric tools but make it descriptive, don't rate people, don't scale them. 

On Forced Ranking (Bell curve) and incentive
He took the audience through the reason behind incentive and bell curve and why they are not relevant today. 
Forced distribution curves came during the industrial revolution era when money to the business was limited and job profile was not dynamic enough.ultimately, only a specific amount of money was available for salary increase and bonus, and it was not possible to give increment and bonus of same amount to everybody, have to give someone more and less. This resulted in forced distribution curve or bell curve. Bell curve has nothing to do with the employee performance measurement, it is only for distribution of salary increment and bonus. It's a mathematics. 

In the post-industrial revolution, capitalists exploited the labour and did not share surplus output and labour withhold their efforts. Then the capitalist started giving incentives. Incentive came due to loggerhead between capitalist and labour. Withholding by the capitalist and extracting by the labour, the additional effort was measured by output, and we believed money can help in getting better production. this belief itself is questionable. People only put efforts up to certain extent. He recommended audience to read wages in India by Subramaniam if the book is in print and available    

The learning was experiential and cannot be described in any length of the word here. you need to be in the session. He spoke from his heart. He exceeded the time allotted and the audience wanted him to continue.  

To attend such lovely events including Thane HR Group events, keep visiting

An appeal: 
Thane HR Group events are free of cost and not a single penny is charged to the audience. Keeping it free for life is a difficult task as there is a cost involved in the rental of premises and food. We request you all to offer your sponsorship and get in direct touch with Mr. Anil Kshatriya, Convenor, and co-founder, Thane HR group at

Happy learning. 

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