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Nowadays, making predictions is essential: we need to anticipate the climate, sports results, monetary information, and so forth. It just bodes well that the business world is going with the same pattern. To this end, vast organizations have been utilizing the uses of psychometric tests for quite a while now, to foresee individual behavior before recruiting, advancement, and other necessary activities.
The Society for Industrial & Organizational Psychology (SIOP) cites from their research that an active 68% of organizations engage in various forms of job skill testing. This transcends to about 29% when it comes to one or more forms of psychological measurement and around 20% for cognitive ability tests.
These ability tests, in combination form the essentials of a psychometric test, something when used correctly, enhances the chances of organizational success. Having said that, there are several uses of psychometric tests in an organizational context. We’ll take a look at the same in segments to come.
Psychometric Tests Applications in an Organizations
In 2002, Sara Rynes, Kenneth Brown, and Amy Colbert conducted a study that should’ve raised red flags and eyebrows in the business world. It determined whether the ideologies of HR professionals remained consistent with established research findings on the effectiveness of various HR practices. The survey consisted of 1,000 Society for Human Resource Management (SHRM) members – Managers, VPs, and Directors with an average of 14 years experience.
The results identified staffing as an area of great disconnect, an HR lynchpin. It was particularly prevalent in the area of hiring tests where more than 50% of respondents cited unfamiliarity with prevailing research findings.
SOURCE: Sara Rynes, Kenneth Brown and Amy Colbert
Be aware that all the statements mentioned above are wrong via both statistical studies and hard research. And yet, HR practitioners seem to believe otherwise – a majority of them nonetheless.
For anyone who’s ever been responsible for hiring, you must know that there’s a wide variation in workforce performance across jobs. This makes it important to understand the differences among individuals that systematically affect job performance, ensuring candidates with the greatest probability of being successfully hired.
The table below covers the predictive validity of some commonly used selection practices, sorted from most effective to least effective according to research shared at the Personnel Testing Council Metropolitan Washington Chapter in 2014.
The below chart is based on validity coefficients ranging from 0 to 1. The higher the number, the higher the correlation between test scores and predicted job performance.
SOURCE: Data shared by Frank L. Schmidt
For your reference, multi-measure tests are psychometric tests – a combination of cognitive ability, personality, and interest tests. In the table from Frank L. Schmidt’s data, research indicates 0.71+ correlation, identifying it as the greatest predictor for job performance in the hiring scenario. It also cites the insignificance of relying primarily on interviews, reference checks, and personality tests alone.
In fact, the data solidifies that despite popular belief, personality constructs are not the most predictive measures available with a correlation score of not more than 0.22. They are most effective in combination with other measures with higher predictive validity, such as cognitive ability or integrity tests.
What’s important here is the use of psychometric tests doesn’t necessarily restrict its use to larger organizations. SMEs can use the method as part of their recruitment strategies also. Here are some inherent benefits of psychometric tests applications in your organization:
If we elaborate on the last point, cultural fitment has, by large, become a critical component in personifying your ideal employee in terms of organizational, job role, or management suitability. It echoes the ideology that a stellar employee in one company may not necessarily stand strong in another.
A small example would lie in Marissa Mayer and her failure in transitioning into the role of Yahoo’s CEO. Regardless of her failed stint at the helm of Yahoo, Marissa – a former Google VP – was a stellar candidate, having been part of the three-person team to launch AdWords, followed by her strong involvement in Google Search.
One could say that her failure at Yahoo boiled down to the inability of an intelligent person to become part of the organizational synergy – someone with little to no turnaround experience, leadership experience in running large enterprises, and management experience. This was correlation mismanagement. Another issue psychometrics attempts to address.
On the cultural compatibility front, Marissa forced an end to Yahoo’s popular work from home policy in an attempt to improve work productivity. It ended with increased stress, lowered productivity, and higher real estate costs.
When it comes to L&D programs, Business Impact and Return on Investment (ROI) rank as the two most desired measures by CEOs in an Adecco survey. Yet merely 8% of the organizations surveyed currently notice business impact by L&D; this drops by another 4% when it comes to ROI measurement as well. Additionally, as part of the Workplace Learning Report, 32% of 500 L&D professionals identified with the genuine challenge of demonstrating ROI and business impact to senior leadership. It’s raised queries about L&D budgets, and its allocation thereof, which may hinder professionals from ever fully optimizing their initiatives.
The recent advent of assessment technology, however, seemed to have offset this disadvantage, at least to a certain degree. But we can look more closely at how psychometric tests application improves learning, training, and development programs in organizations.
The cut-e Assessment Barometer – an international survey of 2776 respondents from about 37 countries uncovered that Irish organizations, along with others from Malaysia, the Netherlands, and Sweden make use of psychometric tests in learning & development more than organizations in other geographies. Employers are doing this to better understand the strengths already in the organization.
The underlying principle behind making this happen is to create clearer career paths for the Irish company employees and to embrace the culture that makes them successful. While historically used towards the end of the recruitment process, much of the data from psychometric tests largely went unused post-hire. The Irish were among the first to realize the importance of psychometric tests, and these tests are primed to add more value than previously imagined potential, especially in maximizing ROI or understanding training needs.
Assessments are now deployed before the recruitment process also, the results of which are later used to give candidates more information on the applied role and provide feedback on candidate suitability, strengths, and areas of development of the same. In fact, large organizations now utilize talent management systems that assess test data gathered pre-hire to create training plans and link employees with roles that are available in the organization.
In fact, any company working into the creation of training and development initiatives for its workforce must learn how to properly identify and assess the needs for the training. This helps the leadership identify gaps between existing training and that which would be required in the future. Categorically, there could be three different needs the leadership could look at, and perhaps three assessment methods for identifying core training requirements at any organization.
Training Need Identification that makes use of psychometric tests must remain focused on the effectiveness of the enterprise as a whole. It targets discrepancies that reveal the skills or knowledge required to bridge gaps. The test must take into account factors such as new environmental policies, changing workforce dynamics, demographics, and the economy.
When working through the training, identification of the need ranks fairly high in importance. A prime focus on each kind of training – albeit task-based, industry-based, or job-based – is necessary to determine the best course of action for the enterprise.
But while much of what’s been described covers the aspect on how training can be most effectively delivered, a better analysis would require an organization to answer the following questions also:
To answer the first question, Training Need Identification ranks among those strategic initiatives taken to delve deeper into the ways of enriching competencies, workforce potential, and capabilities. In fact, with the successful deployment of the analysis, the organization would be in its most primed position to evaluate better outcomes considering the best utilization of its resources.
Through the training need analysis, you also gain insight into how relevant training is for the employees. The important question to consider here is if trained, would they actually improve in terms of job performance? And if the improved job performance has anything to do with an organization’s business outcome or goals.
On the other hand, it also allows for a detailed foray into the areas in which employees fall behind – knowledge, attitude, or skills. This understanding also works toward empowering employees by providing them with a platform to acquire new skills at a faster pace and thereby enjoy work.
With proper analysis and implementation, an organization can steadily steer employees into remaining happy and highly productive. It’s this stage – the training needs analysis – that scrutinizes the gap in performance against theory to its current form.
It builds towards the improvement of different aspects of the organization, builds specific training programs to address important gaps, and boosts the overall productivity of the company.
Learning & Development Initiatives have historically faced little support within the organizational ecosystem. People have speculated that this is in part because of an organization’s inability to measure training effectiveness without directly testing employees or candidates in real-world scenarios.
In a survey by the Open University Business School on over 200 learning and development (L&D) senior decision-makers, two-fifths of international organizations revealed to possess little to no global strategy for learning initiatives. The main reason is the lack of general visibility on business outcomes from said initiatives against the investment laid – ROI.
The Challenges of Global L&D Survey unveiled two more insights of note:
However, the advent of test technology propelled the understanding of L&D efficacy without leaning in on real-world observation. This has, in fact, stretched to better budgeting and greater improvement in the concept of training and development also. The use of psychometric tests to analyze behavioral competencies, inspired by its use in assessment centers, served to augment the process.
An evaluation, in the first place, is taken, which gives a report of proficiency of each participant over the critical competencies- a specific set of competencies required to be effective at the workplace crosswise over various job roles.
These reports are fundamental, for we can’t move onwards until the point that the right match between candidate to be trained and competency to be worked upon has been discovered.
Then comes the training part which could shape into various forms. It could be classroom or educator-driven or could incorporate intelligent techniques (tests, case studies, group discussions, etc.)
After the training, comes the part to gauge its adequacy. Luckily, there exist some demonstrated methodologies for measuring training effectiveness. Using the Kirkpatrick Model, with a basic 4-level approach, one can effectively gauge the viability.
Through the Kirkpatrick Model, assessment technology is introduced via a set of customized diagnostic and summative assessments. This covers employee proficiency right before and three months post-training and is most easily identified with the learning part of the Kirkpatrick Model.
Behavioral changes are better measured via the use of a 360 feedback loop, an assessment that accounts for an individual’s change in behavior based on the manager, peer, and subordinate experience.
There are a couple of reasons to consider the benefits of training based evaluations:
Assessment Centers are known to involve participants completing a range of tasks that simulate real-time activities carried out in the target job. A combination of the same and more important methods that utilize psychometric tests and interviews are used to assess specific competencies in candidates.
The concept is defined by an organization’s desire to predict future job performance. Assessment & Development Centers are known to draw this outcome by having individuals carry out a set of tasks that most accurately sample those required in the job. In simpler terms, these centers are designed to measure and observe behavior.
This approach derails from the more traditional approach in which an observer primarily infers personal characteristics from behavior based upon subjective judgment, and usually without much evidence. Over time, these have been rendered ineffective and inaccurate because of the subjective biases and whims of the observer.
There are multiple ways to deploy an assessment center based on organizational preference, requirement, and convenience also. A couple of ideologies in place currently include:
In many cases, traditional approaches have also produced selection criteria or decisions based on loose social interactions, post which an individual’s cultural fitment with an organization is determined. Assessment & Development Centers aided with test technology, especially with the help of psychometric tests applications are working as a remedy to this situation.
The business decisions require justification, backed, and informed by data. When it comes to organizational planning, a lot of weight is given to employees at different stages of their employee lifecycle.
It mostly covers segments on high potential identification, which could broadly spread through different levels of the organization, and succession planning centered around future leadership development.
The use of psychometric tests is an important element of scientific function in an industry that has often relied on external human measures such as instinct or synergies between the reviewer and the reviewee. While the idea of psychometrics diminishes neither instinct nor reviewer-reviewee compatibility, it does add to its objectivity.
A Willis Tower Watson Study measured the importance of psychometric tests by organizations in both facets of high potential identification and succession planning across varied seniority.
High Potential Identification witnessed its largest usage in middle management, with 52% of the companies from the study utilizing psychometric tests to improve the organizational effectiveness of the same. Succession Planning – on the other hand – displayed its usage in senior management with 28% of the studied organizations using psychometrics. These numbers are expected to rise with improved awareness and visible positive impact.
Succession Planning is determined by the identification of vacancies that an organization may expect through either attrition or retirement. It is the strategic consideration of how, where, and when internal candidates may be primed to fill said vacancies.
This would require the assessment of skills and requirements from the job of existing employees, seeking to plug the gaps between needs and skills with articulate training and development initiatives. Simply put, it identifies future leaders.
This is an important way to isolate employees with the skills or potential to develop said skills that could perhaps help them move higher in an organizational ladder, or onto more suitable positions. When you place psychometric tests into the equation, there is evidence of a more effective form of succession planning. Some of which are highlighted below:
The identification of potential employees to fill vacancies, the consideration of internal talent that requires coaching, an aspect of mentorship, and training to step into slots when necessary is a key function of the HR department in several organizations today.
Succession Planning is a strategic approach to make sure that the necessary talent and skills are made available when required and has been identified as a key initiative for addressing a number of critical human resource issues. This includes increased turnover rates, fast-paced changes in work, and a desire for a sound workforce across levels.
The most commonly utilized steps for succession planning are as follows:
The story also works to highlight that a succession either propels an organization to brave turbulent market waters or sinks it through the holes. In situations where requirements and roles are sharply defined, the use of psychometric tests is equally helpful in identifying an employee’s future potential in the role.
It provides advantages in the form of objective information on employee effectiveness, behavioral competencies suited to the organizational ecosystem, and leadership stage compatibility.
In the business world today, there is a growing interest in high potential (HiPo) identification. Employee potential determines the upper limit of his or her development range. Suffice to say, the more potential they have, the cheaper and quicker it is to develop them.
Studies indicate that investment in the right people maximizes organizational returns, largely derivative of Pareto’s Principle or the 80/20 Rule. It roughly identifies that about 80% of the effect arises from merely 20% of the causes. This is further validated by deeper research – across a broad range of industries, organizations, and tasks, a minute portion of the workforce drives large proportions of organizational results.
This pattern visibly grows with the complexity of the job itself. For jobs of low complexity, top employees outperform average employees by a rough median of 50%. You could take manufacturing as an example here. This difference rises to about 85-100% for jobs of medium complexity; trainers or sales managers.
Highly complex jobs, especially senior leadership roles, contribute more than double of the average margin, with a contribution output over 100%. There’s also added benefit to having these star performers in a team environment, boosting the effectiveness of other members to around 15%.
In fact, the study shows stronger fiscal performance in companies dedicated to identifying and developing top talent. But if an organization is to invest in the right employees, the question arises of who they actually are. Differently put, what are the key indicators that signal this high potential? Psychometrics, however, reveal that regardless of industry, job, or complexity, such individuals tend to possess a range of measurable qualities – qualities that can be identified early in the process.
In the 21st century, when comparing scientific research or psychometric use to desirable qualities or traits on the predictors of job performance, identified a couple of markers of high potential. These ingredients are key to making the use of psychometric tests suitable for high potential identification.
Not many employees possess these traits, which is why they often remain 1%. A company is more likely to end up with a stronger proportion of high potential employees that disproportionately contribute to an organization when they rely on tests with a scientific foundation. This is key to the highest levels of ROI.
It is important to note that in the matter of performance evaluation, job performance is subject to social and organizational influences. This is indicative of something known as effective job behavior, but what constitutes good from poor performance relies entirely on organizational context.
For example, the armed forces place a ton of importance on performance metrics such as military bearings. It signified the appearance and mentality of a serviceman, covering meticulous attributes such as ironed uniforms, properly worn equipment, manner of behavior in and out of formation, and more.
Likewise, a mechanic would be evaluated a little differently than military personnel by a car dealership. It’s why experts suggest the inclusion of descriptions based on job complexity for the purposes of the appraisal – namely situational factors that interact or influence behavior, job outcomes, and job behavior.
In the 1980s, the Office of Personnel Management (OPM) was reported to use the Management Excellence Inventory. The MEI described management functions and the skills required of said functions. It suggested that at three levels of management, different layers of knowledge and skills are required to reach a measurable level of success.
Via review, research on these areas of skill indicates that all are general, some are task-oriented, and some such as flexibility and leadership are personal traits.
Now in private-sector organizations with easily measurable bottom lines, it is simpler to develop individual or quantitative work goals than it is in bureaucracies or governments where bottom lines are difficult to define. But the easy availability of quantitative goals might actually prove to hinder the valid measurement of employee effectiveness, especially since these goals shift focus to short-term results.
Further evidence highlights that the incorporation of countable, objective measures of performance into an overall appraisal could lead to an issue of overemphasis on fairly concrete aspects of performance and less emphasis on those that are hard to be quantified – aspects that yield concrete outcomes only in the long term.
When in an application for performance evaluation, the use of psychometric tests involves two prime functions – the use of appropriate instruments, and the evaluation in the wake of applying such tests. The reason testing rose to prominence for segments such as performance evaluations is better explained with a weighted example.
The example shows that traditional methods of performance evaluation carry a high-risk of individual bias. There are also matters of favoritism and gender bias, among others. They are not comprehensive and undermine the effectiveness of people’s performance. Psychometric tests move beyond decisions made on the basis of a chance to make a real impact on the success and talent quotient of any business.
We have discussed a little about the validity and reliability of a psychometric test; suffice to say, they need to remain high on both accounts for performance evaluation also. To jog the memory, you could take a look at the chart below. It covers the metaphor of a shooting target: a wide dispersion of bullets indicates unreliability, whereas off-center shooting points to poor validity or bias.
A 2006 research revealed that in order to make psychometric tests valid, an organization is required to supervise changes in criteria in order to keep a balance of skills and personalities in need of evaluation. If good communication skills is a mandate for a role, a baseline must be established normatively for the test in question before the evaluation process. Again, it is wise to modify if factors of emotional stability – for example – are required in addition to base communication.
Therefore, to maintain the validity of the performance evaluation process, the psychometric tests deployed require a certain amount of flexibility in accordance with the situation. In other words, if you are considering these tests, it is only helpful in case of well-established metrics of job performance. Let us take a look at some of the criteria required of this validity:
Of course, this is only established when an organization makes use of combined psychometric and traditional techniques. But, choosing the right test criteria mostly depends on the role or position for which the employee or candidate is being assessed.
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It is a general practice that most of the hiring decisions are based on past performance or tenure and not on the talent that the candidates possess.
Poor hiring practices are costing organizations billions annually in hiring costs and lost organizational profitability.
By making use of Psychometric tests during the hiring process, organizations can base their selection on safe and trustworthy criteria such as – innate competencies, rather than the relatively irrelevant and unreliable managerial performance indicators like past performance, tenure or domain knowledge, and skills.
Psychometric test applications help in assessing the innate cognitive, behavioral, and personality-related competencies that are present in an individual in an accurate and unbiased fashion. It helps in identifying if a candidate possesses qualities that are required to lead a team efficiently and keep the team members sufficiently motivated and engaged.
Psychometric tests are a scientific yet standard method that is used to measure the behavioral style and mental capabilities of an individual. They measure the suitability of a candidate for the role, for example, leadership based on the required personality characteristics. It also identifies the extent to which the candidate’s personality and abilities match to perform the role.
For example, If we take a look at the essential parameters on which leaders can be evaluated, then it’s their way of thinking and how they process any information. Secondly, how they approach a problem and make decisions. Lastly, the way they respond at extremes of their decisions. Here are these three factors:
While making decisions, the very basic step is to process a bunch of information pertaining to the task/situation. There are individuals who prefer to process numerical data. They are often the ones who like to identify patterns or the protocols in numerical form and hence predict outcomes consequently. They might do well in areas like finance, engineering, or IT.
Then there are others who prioritize words, but numbers and tend to interpret events through emotions. These are the ones who process verbal information efficiently and generally tend to perform well in areas like literature, journalism, etc.
Different people have a different approach towards the situation. There are times when their bright side affects the decision. Some people make decisions based on their motivation to achieve recognition or money. Their motivators attract them towards the positive side of the risk-reward equation.
Everyone has a different reaction to feedback. A few people react emotionally to negative feedback by blaming others individuals, conditions, timing, and so on- that basically are out of their locus of control. Others might react to negative feedback by staying collected and cool-headed, thinking about how they may have added to the awful choice. They’ll be the ones who learn from their mistakes and aim not to repeat in the future.
Every organization has managers with the capacity to do great. However, that potential is untapped unless they are trained and developed to unleash their talent.
Tapping this potential requires knowledge about the innate competencies that the managers possess. Psychometric assessments can help in identifying the cognitive and behavioral competencies and personality type of manager. This knowledge is crucial to understand if a manager possesses the right temperament and skills to lead their team. In case the manager falls short on these skills, they can be trained and developed to manage their teams better by focusing on the skills that they lack and consciously working to improve them.
An organization needs to identify the leadership style of a manager and mold it to suit the requirement of the team in order to get the best results. In order to achieve this, we need to assess the behavioral and personality traits that a candidate possesses to gauge the kind of leadership style he/she is likely to follow. The use of psychometric tests is the best to help HRs and hiring managers get hold of this information. Once a candidate’s predominant leadership style is identified, HRs and hiring managers can use this information to check if the candidate’s leadership style will match the team’s requirements.
The importance of psychometric tests is also validated while aligning the innate leadership style of existing managers and molding it to get the best out of the team that they are managing.
Good managers are defined by their continuous efforts to keep their teams productively engaged, which results in high performance. They can successfully motivate every member of their team to take responsibility for their own and the team’s performance as a whole. The outcome- building an organization that is high in productivity and profitability. However, the stark reality of the situation is that very few managers can be graded as ‘good managers’ who are able to keep their teams productively engaged. In fact, studies show that only one in ten managers are effective team builders. Moreover, employees across the globe state ‘managerial behavior’ as their biggest source of workplace stress.
No wonder 87% of the global workforce is disengaged and not contributing to organizational success. This horrifying statistic from Gallup can be traced right to managers who are responsible for 70% of the variance in employee engagement scores across business units. And what is worse, these numbers have hardly improved in the last decade, meaning that organizations have failed miserably in hiring or developing great managers who can lead their team efficiently.
High employee engagement is directly linked to higher employee productivity, organizational profitability, lesser absenteeism, lower turnover, and overall better and safer work culture.
To ensure high employee engagement, companies need to ensure that every team is led by a competent manager who understands the needs of their team accurately. Great performing teams are high on motivation and morale and guess who is responsible for keeping a team’s spirit high-the manager.
In an organizational context, there is often the case of employee burnout – a situation of emotional exhaustion, lack of personal attribution or accomplishment, and depersonalization. Around the early 1980s, psychometric research led to the development of the Maslach-Burnout Inventory (MBI) designed to measure burnout.
Typically restrained to the evaluation of human services, research later led to the making of the MBI-General Survey (MBI-GS), a newer version to include all employees and not merely those in industries of people work.
Relatively little attention has been directed toward concepts considered antipodes of burnout; an exception being the psychological presence or to be invested fully. The thought emerged from role theory and is often defined as an experiential state that channels energies into cognitive, physical, and emotional labors using personally engaging behaviors.
Now, why does this require intervention by test technology? In January 2016, Gallup released the results of its annual employee engagement survey polling more than 80,000 working adults in the U.S.A. It accounted for a workforce across industries, of which Gallup identified merely 32% as engaged at the workplace.
Interestingly, 17.2% fell into the category of being actively disengaged and 50.8% into the classification of absolutely not engaged. It mirrored the results of 2015, marking little to no improvement in avenues of employee engagement. There are some other researches that compel one to remain firm in the matter.
Contrarily, engaged employees possess a sense of effective and energetic connection with work-related activities, going as far as to see themselves as able to deal perfectly with the demands of the job. In psychometric tests designed to assess the matter – such as the MBI or MBI-GS – it would be wise to review the opposite pattern of scores on the below mentioned MBI dimensions.
Both engagement and burnout hold easily measured metrics, and while the metrics itself are opposites, the concept of the two is not. This is something that’s being constantly researched into improvement. Psychometric qualities of the two inventories and the tests that yield it face considerable favor due to two immediate benefits to organizations:
A logical next step to everything that’s been discussed thus far, employee engagement aside, is further research. While simple in statement, there are a lot of facets or scales and their relationship to job-related variables matter.
For example, burnout research reveals different types of variables related to different dimensions of burnout – emotional exhaustion correlating to job demands such as time pressure and workload, whereas cynicism or disengagement from work is more a function of poor job resources, poor job control, lack of feedback, lack of participation in decision making, and lack of social support.
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The psychometric tests from Mercer | Mettl have been designed to make the evaluation of behavioral and cognitive skills accurate and result-oriented. We can also provide companies with customizable solutions to address their specific needs of the recruitment process. We try to make our assessment process scientific and reliable.
Mercer | Mettl’s psychometric tests can provide statistics- based predictive insights to make the for assessing various traits of the individuals. These traits include-
The Mettl Personality Profiler (MPP) is a perfect tool to help create a competency framework related to a particular job role. It is a good tool to decide on particular traits needed to complete a particular task. MPP is equally effective in making a customizable solution to cater to the specific needs of the clients and make the recruitment process totally frictionless. It also helps in the learning and development process for training the employees. It also provides meaningful insights for succession planning and high potential identification.
Mettl sales profiler is a well-designed tool to consolidate a competency framework for the sales profile. It helps in identifying people with the knack for sales. Matching the behavioral and cognitive competencies for the sales profile is one of the important features of the Mettl sales profiler. The evaluation bases on psychometrics tests provide reliable insights to choose people who would make a successful winning team.
Every organization tries to find candidates who would turn out be the key performers in their respective job roles. These candidates should also be able to align themselves with the company’s values. The psychometric tests for hiring from Mercer | Mettl covers every essential idea to make a recruiter’s life easier by providing reliable information and insights about the candidates.
The dark traits tell about an individual ‘s negative qualities that make an unhealthy environment at the workplace. Mettl Dark Personality Inventory is able to give information about a person’s six dark traits such as self-obsession, opportunism, insensitivity, temperamental, impulsiveness, and thrill-seeking behavior. These traits are considered to be undesirable and it is equally important for an employer to be aware of the existence of such negative qualities in the existing as well as the future employees.
Originally published April 12 2018, Updated August 4 2020