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1
The Policy Context
Productivity has been one of the more worrisome public issues of this
decade. Faltering American competitiveness vis-a-vis Japan, the deteri-
oration of the steed industry and of manufacturing more generally, the
decline in real income and the emergence of the two-earner family, the
ballooning federal deficit and trade imbalances-such topics have become
a staple of the popular press as well as the more ratified domain of
· -
economlc ana ysls.
As part of the larger public discussion, the quality of the American
work force has come under increasing scrutiny. Numerous articles and
reports have described the decline in American public education and the
failure of contemporary schools to prepare pupils to enter the labor
market. There have been unflattering comparisons to the productivity of
Japanese and Korean workers in the auto, electronics, and appliance
industries. And there has been increased interest in finding better ways of
selecting and using workers. There has been a resurgence of testing-
testing to screen out applicants who are bad risks (drug testing, lie
detector testing, honesty testing, health projections) and, to a lesser
extent, ability or knowledge testing to identify the better prospects.
THE USES EMPLOYMENT TESTING PROGRAM
In response to the troubled state of the nation's economic health, the
U.S. Employment Service (USES), a unit of the U.S. Department of
Labor, developed a new role for its General Aptitude Test Battery
17
OCR for page 18
~ ~ BACKGROUND AND CONTEXT
(GATB), a test of cognitive, perceptual, and motor skills used in state Job
Service offices since 1947. Less than ~ percent of the approximately 9.5
million Job Service registrants who received some reportable service each
year were given the GATB in the early l980s, and then mainly for
purposes of vocational counseling. It was felt that far more extensive use
of the test battery to fill job orders might be justified. Recent develop-
ments in statistical methods specifically, mesa-analysis seemed to
hold out scientific promise that the GATB could be used to identify good
workers for a wide range of jobs. From a policy perspective, the
anticipated contributions to productivity were attractive.
The rationale for using general ability tests for employment screening is
that ability tests can help employers identify good (more productive)
workers. This proposition is based on a number of assumptions:
First, that there is a wide range of potential job performance in the
people likely to be candidates for a particular type of job;
Second, that ability tests predict future job performance with a useful
degree of accuracy;
Third, that higher scorers on the test are better performers in the long
term (that is, if everyone could be trained to proficiency in a short period
of time, the advantages of selecting high-ability workers would be
fleeting).
If these things hold true, then selection of high-scoring applicants can be
presumed to enhance work force efficiency and therefore contribute to the
overall productivity of the firm. Although mental measurement specialists
generally recognize that cognitive ability tests can measure only some of
the attributes that contribute to successful job performance, they consider
such tests to be, in the present state of the art, the most informative
general predictor of proficiency for most jobs. (Note that we are talking
about general employment screening, for which a single instrument is
used to predict success in a range of jobs. For jobs that require extensive
prior training and highly developed skills and knowledge, such as elec-
tronics specialist, jet engine mechanic, and lawyer, custom-designed
instruments would be more informative than a general cognitive test.)
None of this was new in 1980 when the U.S. Employment Service
began to envision a larger role for the GATB. But a catalytic innovation
had occurred in one corner of the psychological measurement field during
the 1970s. Traditional psychometric theory held that the validity of a
given test is dependent on situational factors (the norming sample,
geographic location, organizational climate) because the correlations
between a test and the criterion of interest (e.g., job performance) were
observed to vary from study to study. Thus, the theory went, a test valid
in one setting might not be valid in another, and a new investigation of its
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THE POLICY CONTEXT 19
validity would be required for each substantially new setting. This is the
view that has informed federal equal employment opportunity policy and
is officially recognized in the interagency Uniform Guidelines on Em-
ployee Selection Procedures (29 CFR Part 1607 [198511.
In the mid-1970s, a number of analysts, preeminent among them Frank
Schmidt and John Hunter, began to challenge this theory of situational
specificity, arguing that the observed differences in a given test s validity
from one setting to another were not real, but rather were artificial
differences introduced by sampling error, unreliability in the criterion
measures, and other weaknesses of the individual validity studies. The
application of meta-analytic techniques for combining data from large
numbers of studies, statistical techniques that had proved useful in many
other scientific areas, led Hunter and Schmidt to conclude both that the
results of individual validity studies substantially understate the predic-
tive power of cognitive tests and that the validity of such tests can be
generalized to new situations, even to new jobs. Convinced that this
evidence establishes the importance of g, or general intelligence, to all
types of job performance, some proponents of validity generalization, as
this type of meta-analysis is called, have come to argue that a well-
developed ability test can be used for selecting applicants for virtually all
jobs. If this held true of the GATB, it would enable USES to encourage
the states to start using the test much more widely in the Employment
Service.
The Department of Labor contracted with John Hunter in 1980 to
conduct validity generalization studies of the GATB, using the hundreds
of individual validity studies that had been conducted since 1947. Hunter
carried out four technical studies in 1981 in which he explicates his
analysis of GATB validities and presents a dollar estimate of the economic
gains that could accrue from using the GATB for personnel selection. The
results were published as USES technical reports in 1983 (U.S. Department
of Labor, 1983b,c,d,e). The reports advocate the generalizability of GATB
validities to all 12,000 jobs in the U.S. economy. In the author s view, use
of the GATB could be extended from the 500 jobs for which specific
validation studies had been conducted to every job for which the Employ-
ment Service might be asked by employers to refer candidates. Moreover,
Hunter maintains that substantial-one could say dramatic economic
gains would accrue from using test scores, from the highest score on down
in rank-ordered fashion, to select the applicants to be referred to employ-
ers. By his calculations (U.S. Department of Labor, 1983e), optimal use of
the GATB in 1980 (i.e., top-down selection) to refer the approximately 4
million people placed by the Employment Service that year would have
yielded gains of $79.36 billion. In comparison, total corporate tax reve-
nues at all levels were $59.2 billion in 1982 (Sueyoshi, 1988~.
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20 BACKGROUND AND CONTEXT
Not surprisingly, USES officials were encouraged by these findings.
They decided to implement a new test-based referral system, which we
call the VG-GATB Referral System in this report, on an experimental
basis. With USES approval, North Carolina began a pilot project in fall
1581. By the end of 1986, some 3& states had experimented with
VG-GATB referral in at least one local office. Six states (Maine j Michi-
gan, New Hampshire, North (Carolina; Utah j and Virginian introduced the
test-based referral plan in all local offices j although only Virginia replaced
the earlier system of having placement Counselors make referral deci-
sions. Most states did not dramatically alter local office procedures, but
simply supplemented existing procedures using the VG-GATB system,
with its requirements for extra testing and file searchj to fill job orders if
requested by employers. Out of 1,800 local Job Service offices nation-
wide, approximately 400 introduced VG-GATB referral, typically in
conjunction with the earlier system. Of these, 84 are located in North
Carolina, 8Q in Michigan, 38 in Virginia, 35 in Mainej and 25 In Utah.
Within-Group Scoring of the VG-GATB
An integral part of the VG-GATB Referral System; as USES presented
it to state-level Job Service officials, was the conversion of scores on the
test battery to percentile ranks within the population categories of
"black," "Hispanic,)' and "other" (which includes all those not in the
first two categories). This was a carefully considered policy decision.
Following the findings of the technical reports, USES designed the
system to rank-order candidates by test score and to refer them from the
top down in order to get the maximum economic benefit. There are,
however, significant group differences in average test scores, which have
been demonstrated with virtually all standardized tests. Blacks as a group
score well below the majority group, and Hispanics tall roughly in
between as a rule. As a consequence of these average group differences,
strict top-down referral would adversely affect the employment chances
of black and Hispanic applicants.
To counteract this effect, the experimental referral system stipulated
that raw scores be converted into group-based percentile ranks. USES
provided the conversion tables for making the score adjustments. The
resulting percentile scores reflect an applicant's standing with reference
to his or her own racial or ethnic group, thus effectively erasing average
group differences in test scores. ~ black applicant with a percentile- score
of 50 has the same ranking for referral as a white candidate with a
percentile score of 50j although their raw test scores (percentage correct)
would be very different. For example, in the category of semiskilled jobs;
blacks at the 50th percentile have raw scores of 276; Hispanics, 295; and
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THE POLICY CONTEXT 21
others, 308. The meaning of these raw-score differences for estimated job
performance is not self-evident. But to lend some perspective, a raw
score of 308 within the black group is at the 84th percentile of that group.
By combining this method of scoring the GATE with top-down selec-
tion of the applicants to be referred to prospective employers, USES
sought to further two policies that are considered very important by the
federal government: the enhancement of national productivity (by serving
the individual employerts interest in hiring the most able workers avail-
able) and the promotion of federal equal employment opportunity and
affirmative action goals. Without some sort of compensatory scoring
system, in the agency's view, referral of candidates on the basis of GATB
test scores from the top down would reduce the employment opportuni-
ties of minority-group job candidates, thwarting the governmental interest
in bringing minority workers into the economic mainstream and creating
possible legal problems for both the Employment Service and the
employers it serves. But if top-down selection were completely aban-
doned, in the agency's view, work-force efficiency would super.
The Justice Department Challenge to Within-Group Scoring
Some years into the experiment with the VG-GATB Referral System,
the Justice Department challenged the program because of the way test
scores are derived. In a letter to the Director of the U.S. Employment
Service, dated November 10, 1986, Wm. Bradford Reynolds, then As-
sistant Attorney General for Civil Rights, strongly urged that all states
that had adopted the validity generalization procedure be notified to cease
and desist immediately. Mr. Reynolds adjudged the VG-GATB system to
be an unlawful and unconstitutional violation of an applicant's rights to be
free from racial discrimination because the within-group scoring procedure
not only classifies Employment Service registrants by race or national
origin, but also "requires job service offices to prefer some and disad-
vantage other individuals based on their membership in racial or ethnic
groups. Such a procedure constitutes intentional racial discrimination."
The important point of difference between the two agencies was their
judgment of the legality of extending race-conscious preferential treat-
ment to some groups in society as a means of combating discrimination.
Neither agency disputes the fact that there is a powerful legacy of
discrimination to overcome. The question is means, not ends. The
Department of Labor adopted a race-conscious scoring mechanism in
order to avoid discrimination against minority-group members and to
promote equal employment opportunity. Within-group scoring was
thought of as an extension of a referral policy negotiated in 1972 among
the Department of Labor, the Equal Employment Opportunity Commis
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22 BACKGROUND AND CONTEXT
sign, and the Department of Justice. The 1972 referral ratio policy
stipulated that referrals of tested minority applicants should be in propor-
tion to their presence in the applicant pool in all cases in which the tests
had not been validated for minority applicants to the job in question
(which in 1972 was virtually all 500 jobs for which testing was used).
The Department of Justice viewed preferential consideration for one
racial group as discrimination against all others, on the grounds that it
illegally advances the interests of one classification of people at the
expense of others.
Officials of the Labor and Justice Departments agreed to a continuation
of the status quo-no further extension of the VG-GATB Referral System
and at the same time no cease-and-desist orders until a thorough study
of the GATB validity base, validity generalization, scoring and referral
policy, and the potential impact of the referral system could be carried out
by a body of experts. This volume reports the results of the agreed-upon
study.
OTHER POLICY ISSUES
Although the immediate reason for this study stems from the divergent
views of two federal agencies about the legality of score adjustments,
there are more general questions that should also receive careful policy
review, questions about the nature of cognitive tests and about the
wisdom of allowing any one procedure to dominate federal and state
efforts to promote economic well-being by bringing suitable workers and
jobs together.
Validity Generalization and the Reemergence of g
Development of the theory of validity generalization has coincided
with, indeed encouraged, a revival of interest in the concept of g, or
general intelligence. To make any sense, the idea that test validities
observed for some jobs can be generalized to all other jobs depends on the
complementary idea that the test measures some attribute that underlies
performance in all jobs. This common underlying factor is usually thought
of in terms of general intelligence, although some commentators, wary of
the connotations of genetic determinism that surround the concept of
intelligence, prefer to speak of a general mental factor or cognitive factor.
(In his studies of the GATE, John Hunter identifies two such factors:
general cognitive ability, which he describes as very similar to the
classical concept of general intelligence, and psychomotor ability. The
first general factor he finds linked to performance in all jobs, the
correlation increasing with the cognitive complexity of the job; the
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THE POLICY CONTEXT 23
psychomotor factor is principally associated with performance in one
particular family of cognitively less complex jobs. A third factor, percep-
tual ability, he found to be almost perfectly predictable from and causally
dependent on the first two [Department of Labor, 1983b].)
Early I Testing
The idea of intelligence is closely bound up with the history of
psychological testing in this century. The American adaptation of Alfred
Binet's intelligence scale and introduction of the intelligence quotient in
1911, followed closely by the introduction of group intelligence testing
with the Army Alpha in World War I, forged the link. From the beginning,
ambitious claims have been made for such tests by those who saw them
as a grand device for sorting people into the appropriate slot in society. In
addressing Section H (Education) of the American Association for the
Advancement of Science in 1912, E.L. Thorndike (1913:141) predicted:
It will not be long before the members of this section will remember with
amusement the time when education waited for the expensive test of actual trial
to tell how well a boy or girl would succeed with a given trade, with the work of
college and professional school, or with the general task of leading a decent,
law-biding, humane life.
Like many who would follow him, Thorndike (p. 142) read very expansive
meanings into psychological tests:
Tables of correlations seem dull, dry, unimpressive things beside the insights of
poets and proverb makers but only to those who miss their meaning. In the end
they will contribute tenfold more to man's mastery of himself. History records no
career, war, or revolution that can compare in significance with the fact that the
correlation between intellect and morality is approximately .3, a fact to which
perhaps a fourth of the world's progress is due.
Thorndike was not alone among the early testing enthusiasts, either in
his grand expectations for mental measurement, in his readiness to
measure morality, progress, and man's mastery of himself, or in his facile
assumptions about the congruence of intellect and high moral character.
In hindsight it is clear that many of the advocates of early testing allowed
their scientific judgment to be influenced by contemporary racial and
ethnic biases and by unexamined assumptions about the proper social
order. Historian of science Daniel KevIes has documented the mutual
attraction of the eugenics and mental measurement movements in the
early twentieth century. Eugenicists, the early students of human genet-
ics, asserted that the new science proved that mental defectiveness and
criminality, immorality, and other deviant behaviors are fundamentally
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24 BACKGROUND AND CONTEXT
hereditary. Intelligence testing seemed a perfect tool for identifying those
whose inferior genetic endowment would adulterate the gene pool. In this
context, IQ tests could quickly turn into weapons of racial and class
prejudice (Kevles, 1985~.
But proponents of psychological testing were also responding to
genuine social needs. Recall that the nation was undergoing massive
growth at the turn of the century. In the three decades between 1890 and
1920, the population increased by some 68 percent and the high school
population grew by more than 711 percent (Tyack, 1974~. The need for
new institutions of social organization was urgent. To many psycholo-
gists, educators, employers, and citizens in general, intelligence tests
seemed to offer a scientific tool to bring order to the classroom and the
workplace.
The Army Alpha
The Army experiment with group intelligence testing of recruits during
World War I illustrates both the promise of the technology and its dark
underside. Robert M. Yerkes led a team of prominent psychologists,
among them Lewis Terman and Carl Brigham, in this first major effort to
apply social science to the practical problems of taking the nation to war.
As originally designed, the Binet and similar intelligence tests would have
been of little use in situations in which large numbers of people were to be
tested because they could be administered only to individuals and,
theoretically, only by a psychologist. They were used primarily to assess
mental retardation, not for mass screening. By redesigning a version of
the Stanford Binet intelligence scale to allow its administration in a group
setting, Yerkes and his colleagues put testing on the map.
The Army Alpha, a paper-and-pencil test of general intellectual skills,
made up of multiple-choice and true/false questions, and its oral analog,
the Beta, were administered to almost 2 million recruits from June 1917
until the war ended, a noteworthy bureaucratic and logistic feat. One of
the ironies of the story is that the Army testing program was largely
experimental; it produced massive amounts of data but had little actual
effect on selection or placement of recruits. Nevertheless, by transform-
ing the intelligence scale into a test that could be administered to groups
of people, and by using it to assess the intellectual skills of normal adults,
the Army testing project legitimized the use of standardized, group-
administered tests as a tool for making selection and placement decisions
about individuals in mass society. Through the diligent promotion by
Yerkes and others who had been associated with the Army testing
project, the myth was established in the postwar period that it had been
a great practical success (Kevles, 1968; Reed, 1987~.
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THE POLICY CONTEXT 25
After the war, Yerkes spent a number of years at the National Academy
of Sciences analyzing the test data on a randomly drawn sample of
160,000 recruits. The massive study published by the Academy (Yerkes,
1921) provides, among other things, a stark example of the dangers
inherent in group testing and group comparisons. One of the most
prominent themes to come out of the study involved the correlation
between ethnic background and test scores. Yerkes' analysis showed that
native whites scored highest on the Army Alpha. Of the immigrants, the
highest scores were found for groups from northern and western Europe
and the lowest for those from southern and eastern Europe. These
findings fed the nativist sentiment of the period. They were picked up by
anti-immigrationists as scientific corroboration that southern and eastern
European immigrants i being intellectually inferior, would bring with them
crime, unemployment, and delinquency.
Yerkes' analysis also showed that test scores on the Army Alpha
correlated highly with length of residence in the United States and with
years of schooling. Yet these findings failed to impress. Yerkesj Car]
Brigham, and other psychologists who had participated in the Army
testing project supported eugenics and immigration restriction with he-
reditarian arguments based on the Academy study.
Critics of Intelligence Testing
The claims made for the Army Alpha and the hereditarian interpreta-
tion of test results did not go entirely unchallenged. Walter Lippmann
published a trenchant series of articles in the The New Republic in
1922-1923, in which he mocked Yerkes' conclusion from the Army data
that the average mental age of Americans is about 14. Lippmann, who had
read widely in the social sciences, criticized both the technical and the
social assumptions of intelligence testing. He objected particularly to the
claim that the Army test or any other tests measured hereditary intelli-
gence, comparing it to phrenology, palmistry, and "other Babu sciences.' i
Intelligence, he pointed out, is not some concrete, readily measurable
entity, but rather an extremely complex concept that no one had yet
succeeded in defining (Lippmann, 19221. He summed up his discomfort
with the psychometric vision of man by saying (Lippmann, 1923:1461:
I admit it. I hate the impudence of a claim that in fifty minutes you can judge and
. .
classify a human being's predestined fitness for life. I hate the pretentiousness of
that claim. I hate the abuse of scientific method which it involves. I hate the sense
of superiority which it creates, and the sense of inferiority which it imposes.
By the end of the decade, and in a somewhat less public forum, Carl
Brigham came to similar conclusions about the arrogance of testers in the
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26 BACKGROUND AND CONTEXT
first flush of excitement over the new technology and its social uses.
Brigham's Study of American Intelligence, published in 1923, had been an
extremely influential popular exposition of the hereditary and racially
determined nature of intelligence. Time and further study allowed him to
disentangle his science from his social prejudices. His recantation came in
a scholarly review of the status of intelligence testing of immigrant groups
(Brigham, 1930:165~:
This review has summarized some of the more recent test findings which show
that comparative studies of various national and racial groups may not be made
with existing tests, and which show, in particular, that one of the most pretentious
of these comparative racial studies the writers own was without foundation.
Relevance to Current Policy
Sixty years and more have passed since the advent of group intelligence
testing. The statistical underpinnings of psychometrics have become
much more sophisticated. And in recent years there have been interesting
advances in psychobiology and, to a lesser extent, in cognitive psychol-
ogy that shed some light on intellective or cognitive functioning. But most
specialists would still agree with Lippmann's assessment of the concept
of intelligence: it is a very complicated notion that no one has been able
to define very well. Even if we can show correlational relationships
between a test of verbal and mathematical skills such as the GATE and
supervisor ratings of job performance, we are still a very long way from
being able to claim that what we are measuring is an unambiguous,
unitary capacity that is the essential ingredient in successful job perfor
mance.
Moreover, we cannot escape the connotations that have surrounded the
concept of intelligence since the early days. Most psychologists are much
more circumspect about drawing causal relationships between test scores
and such things as character, criminal tendencies, or degeneracy than
they were in the 1920s. The more simplistic hereditarian notions have long
since gone out of vogue, at least from the academic literature. The basic
texts used to train recent generations of students in the intricacies of
psychological testing-those of Cronbach (1984) and Anastasi (1976)-
emphasize the contingent nature of what we call intelligence and the
complex interplay of heredity and environment at all stages of human
development. But in common usage such refinements can easily be lost,
and there is very real danger that the renewed popularity of g and its
promotion along with validity generalization could become a tool of racial
and ethnic prejudice, generating feelings of superiority in some groups
and inferiority in others.
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THE POLICY CONTENT 27
l he potential tor social damage from overstating the claims of testing
is as great today as it was in the 1920s, because the United States
remains a country of many identifiable ethnic and racial subpopulations,
some of which are relatively disadvantaged economically and educa-
tionally. The target groups have changed to some extent southern and
eastern European groups have long since been assimilated into the
lingual and cultural majority group and have disappeared as objects of
social disrespect. But blacks, Hispanics, and Native Americans, all
groups of people who perform less well on average on written tests of
verbal and mathematical abilities, and who are economically and
socially disadvantaged, are vulnerable to being stereotyped as of inferior
intelligence.
Hence an important policy concern raised by the VG-GATB Referral
System is that it may foster social division by encouraging Employment
Service staff and clients to draw improper inferences about the potential
contribution of minority-group members indeed of any low-scoring job
seeker in the workplace or to society as a whole.
Should There Be Diverse Routes to Employment?
A second question for policy makers to consider is whether govern-
mental endorsement of a test-based referral system, to the exclusion of
other procedures, would be in the best interests of Employment Service
clients or of the economy. If the VG-GATB Referral System is found
legally defensible, it is not unreasonable to anticipate that the GATB
could come to dominate entry to many kinds of jobs. Many employers
would be drawn to use the Employment Service as a way of reducing their
legal vulnerability to equal employment opportunity suits; some would
also be attracted by the savings resulting from shifting the costs of testing
and test validation to the government (although small companies can
afford neither in any case).
The implications of such a development need to be carefully weighed.
There are, for example, possible social costs that should not be ignored.
A universal system of referral based on GATB test scores implies that
people with the lowest scores might well be perpetually unemployed.
Although the number of people who are unemployed would not increase,
the dominance of a single sorting device could have the effect of
perpetually subjecting the same individuals to the ill effects of unemploy-
ment. Is the GATB of sufficient utility to justify such an effect? Are there
ways to prevent that from happening?
Would the government's sponsorship of the VG-GATB system, with its
promised legal umbrella, tend to cause employers to eliminate their own
testing programs, which have been tailored to their own specific needs?
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28 BACKGROUND ID CONTEXT
Would this overload the states' capacity to respond and place an
unexpected burden on their treasuries?
We value pluralism in our society. Is it therefore wise for the govern-
ment to focus on just one characteristic, even if it is what we know how
to measure best, when we also know that successful personjob matches
can be effected in other ways? Is a simple sorting mechanism fair to
individuals of whatever color or ethnic derivation who do not do well on
cognitive tests but are, nevertheless, capable of successful participation
in the work force?
THE INTERSECTIONS OF POLICY AND SCIENCE
Whether within-group score adjustments can or should be any part of
the system used by the Employment Service to bring employers and job
seekers together will not be decided solely, or even primarily, on the basis
of scientific evidence. Likewise, the question of government sponsorship
of a particular test that could come to dominate certain segments of the
labor market is not simply a matter of the quality of the test instrument.
Nevertheless, there are important aspects of the question of appropriate
and equitable use of standardized tests that can be clarified through
scientific analysis. And many of the claims made about the VG-GATB
Referral System in general lend themselves to scientific investigation.
In the remainder of this report, we evaluate the claims made for the
General Aptitude Test Battery, for validity generalization, and for the
economic benefits of employment testing. We assess the likely impact of
widespread implementation of the VG-GATB Referral System with and
without score adjustments. We discuss possible alternatives to the
within-group scoring system, including the so-called Golden Rule proce-
dure for reducing group differences in ability test scores. We offer to the
Department of Labor recommendations for policy alternatives that seem
justified by the scientific evidence. And finally, we propose a research
agenda for the agency to consider should it, through the U.S. Employ-
ment Service, decide to continue to promote a more extensive role for the
GATB.
Representative terms from entire chapter:
test scores
