Don’t Let Poor Assessments Bruise Your Bottom Line

Poor assessments can lead to inaccurate employee data, which can have far-ranging consequences for organizations.

Organizations spend considerable amounts of time and money on assessment tools to help attract, train, select, promote, and develop their employees. And rightly so, because proper training and assessments offer companies vast financial benefits. 

As a Learning and Development (L&D )professional, you know that assessment isn’t just about increasing competency levels, but also about investing in people on an individual and team level. People usually associate the term, “assessment,” with selection, but organizations increasingly are using assessments for developmental purposes. 

A lesser known fact, perhaps, is that assessments that aren’t robust enough can produce misleading results, and with disastrous consequences. Let’s look at the impact of poor assessments on organizations.

Incorrect Employee Data 

Poor assessments can lead to inaccurate employee data, which can have far-ranging consequences for organizations. For instance, it may seem that most team members have failed a test because they didn’t grasp the subject matter, when, in fact, they failed to understand poorly constructed questions. Often, the L&D team has to resolve the issue, which requires more time and resources to train individuals who already have a good knowledge of the subject.

On the other hand, defective assessment processes may allow employees to cheat the system, which then makes it difficult for the L&D team to establish which individuals really need more training. Employees who fail to do the work to pass the tests also will make mistakes and underperform, which ultimately hurts your business’ bottom line. 

The Cost of Regulatory Infringements 

Many organizations face a constantly changing and ever more complex regulatory environment. As such, they understand the importance of training employees to ensure they’re following regulations, and assessment is an excellent way of measuring and demonstrating understanding. However, if your assessment platform isn’t secure and allows dishonesty, regulators will be concerned about the integrity of your organization, and you ultimately may face regulatory fines.

Nearly all business sectors are governed by regulations, and any violation can have a huge impact. The financial services sector has been particularly hard hit according to recent data from Boston Consulting Group, which revealed that since the 2008 financial crisis, banks have paid $321 billion in fines globally.

This cost is not just a massive blow to the corporate balance sheet but also can cause reputational damage stemming from negative media coverage. Secure assessment platforms can prevent and eliminate cheating and subsequent regulatory fines by means of remote “lockdown”—disabling the keys and functions on a participant’s PC used to print, screen capture, and task-switch. So if you’re in a business industry with strict compliance requirements, now may be the time to start considering ways to make your assessments tamper-proof. 

In fact, regulators positively encourage robust assessments, as illustrated in the compliance manual of the US Federal Deposit Insurance Corporation: “Once personnel have been trained on a particular subject, a compliance officer should periodically assess employees on their knowledge and comprehension of the subject matter.” The European Securities and Market Authority puts it even more succinctly in its guidelines for assessment of knowledge and competence: “Ongoing assessment will contain updated material and will test staff on their knowledge of, for example, regulatory changes, new products and services available on the market.”

Make Employees Remember 

Research has proven that individuals who complete assessments after learning retain more information. Responding to questions doesn’t just track what employees know, it also encourages retrieval practice—which means they’re far more likely to be able to recall information when they need it. On the flip side, if an organization’s assessments are confusing or misleading, employees may not get the retrieval practice they need, which could mean all the time and resources you put into L&D is wasted.

Open-ended questions are the most effective to ensure employees remember important information, as they don’t prompt for the answer. Multiple-choice questions are also useful, but the assessor or trainer must provide feedback on incorrect answers. If not, the learner may retain the incorrect information.

Great Assessments Equal Great Reliability 

Assessment processes are a multi-dimensional issue for all organizations and shouldn’t be perceived in simple binary pass/fail terms. From a regulatory perspective, they have implications that may result in substantial fines; their data can positively influence your decision-making or lead you down a rabbit hole; and they can help employees to either retain or forget information. 

As the business environment becomes more competitive, it is more important than ever to implement the best possible assessments. Do so, and you’ll build a more engaged, more capable, and more knowledgeable workforce. 

John Kleeman is executive director and founder of Questionmarka provider of online assessment tools, professional services, and content to help organizations and their people improve their performance and safely meet their compliance requirements.

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