You can’t put a price on the value of ethics
and integrity to a company. But the new argument is that you may very well be
able to buy these virtues in employees.
After all, if you want an ethical company
culture, you have to hire ethical people. And the cost is relatively small,
Judge, management professor at the University of Notre Dame’s Mendoza
College of Business. It’s as straightforward as purchasing and using
personality and intelligence tests in hiring.
Sounds simple. So why do only about 20 percent
of companies, according to the Society of Human Resource Management, actually
Judge took on the issue at the recent forum
sponsored by the Notre Dame Deloitte Center for Ethical Leadership. The second
annual event brought academics and executives together to discuss corporate
values from the perspective of the classic “make-or-buy” decision. Can a
company “make” its values live in its workforce through training programs and
culture setting, or should it “buy” values by hiring the right employees?
The answer is both, of course, though everyone
knows picking the right people is a tough task. Or is it?
We’ve all seen examples of an applicant
sailing through interviews and turning out to be a dud. For starters, Judge
says, most of us overestimate the degree to which we can read others. Even
trained professionals like judges, psychiatrists, and Secret Service members
have lie-detection rates only marginally above 50 percent (barely better than a
That’s why even behavioral and situational
interviews are flawed. They do work better than “unstructured” interviews. But
even their rates of predicting future on-the-job behavior hover around just 55
We also may overestimate the degree to which
integrity can be developed in people. In the battle of nature versus nurture,
nature usually wins out, Judge says.
Studies of twins raised either separately or
together demonstrate the power of nature. They’ve found shared genes are more
than twice as likely as shared environment to predict everything from conscientiousness
to altruistic, antisocial, and criminal behavior.
There is good reason to think that ethics,
too, are in our genes. So the smart thing to do is assess candidates’
propensity to behave ethically BEFORE they are hired.
Judge says to start with exactly what we’re
talking about—and testing for—when we use the word “integrity.” Psychologists
have found it is closely related to the traits of conscientiousness,
agreeableness, and emotional stability. People with strong combinations of
these traits are likely to behave more ethically.
Integrity is just one of three objective
predictors of effective and ethical actions, Judge points out. The others are
personality and cognitive ability. When tested for, the latter two can help
predict job performance and counterproductive behavior.
But all three can easily be tested for—and
Judge says smart companies should know that the test results will be more
accurate than interviewers’ opinions.
“Evidence clearly shows that statistical
predictions based on objective data vastly outperform subjective
judgments,” the professor says. “There are probably 50 years of research on
medical, hiring, and policy decisions. They compare statistical judgments
versus clinical decisions, which include hunches or gut feelings. Statistical
models are almost always going to correlate better with accurate results.”
On integrity, testers can ask overt questions
about ethics or veiled-purpose questions about personality. Both are effective.
Almost as importantly, the tests are
relatively inexpensive and easy to administer, costing as little as $5 per
applicant and often taking as few as 10 minutes.
How about the problem of faking? Luckily,
Judge says, the desired response isn’t always clear to the faker. And even on
the overt questions about ethics, some faking doesn’t necessarily undermine the
validity of the results.
The bottom line: Don’t rely on that “good gut
feeling” you got during an interview. Instead, spend your hiring money well by
buying objective tests, and you’ll save much more in the end.
Note: This article was published as part of the
Notre Dame Deloitte Center for
Ethical Leadership series, To the
point: Dispatches from the Ethical Frontier. For more essays, videos and
other resources on Ethical Leadership, visit http://ethicalleadership.nd.edu/
Freelance writer Lynn Freehill Maye contributed to this story.