Truth quiz on employment tests gains adherents -- and critics

How honest are you? Better have a clear conscience -- your next employer may have a truth quiz.

More than 5,000 companies in the United States now give psychological ``integrity'' tests to prospective employees. And the controversial practice is spreading.

In the last two years, sales for the leading purveyors of these tests have doubled. When one such company, London House, went public in 1983, its revenues tallied $2.1 million. In 1985, sales topped $4.6 million.

``Some of our greatest recent growth in integrity tests has come in supermarkets, jewelry stores, and home building centers,'' says Karla K. Kizzort of London House. One in every 3 drugstores already uses honesty tests. And retailers with high job turnover, high theft, and mostly unskilled laborers are the prime market.

Usage of the tests has risen as companies seek ways of cutting down on stolen goods. Employee theft costs American retailers anywhere from $20 billion to $60 billion annually, according to industry and government estimates. And as Congress considers outlawing polygraphs (at least 19 states have already banned them), employers are turning to less controversial, less expensive paper-and-pencil honesty tests.

``The tests have been effective,'' says Walter Kramer, vice-president of loss prevention at the 50-store Harris Teeter supermarket chain, based in Charlotte, N.C. For the past two years, prospective employees have been screened by taking tests produced by the Stanton Corporation of Charlotte. Mr. Walker estimates that for every $1 spent on tests, the company saves about $4.

More than just weeding out potential thieves, the tests generate better attitudes among honest employees toward work generally, according to retailers and the test companies. Retailers report lower turnover, reduced absenteeism, and greater productivity.

``We wanted the overall quality of our people to improve, and it has,'' Walker says. ``A trustworthy individual tends to bring a lot of other positive characteristics to the job,'' says James Walls, senior-vice president of Stanton Corporation. ``He's looking toward advancement, performing at his utmost, whereas a high-risk individual will be trying to beat the system.''

Identifying potential illegal drug users is another market opening up to personality testing firms. ``We've found there's quite a bit of correlation between drug use and individuals classified as high risk,'' Mr. Walls says.

Each test costs employers about $7 to $14, depending on the size of the order. The London House test is part of a booklet that starts with standard job application background information, then moves into 96 multiple-choice questions. Stanton uses a true-false format. The exams, designed to measure attitudes about honesty, take from 30 to 45 minutes.

Typically, questions are along the lines of: ``Have you ever stolen anything? How much was it worth? Have you ever let your friends use your employee discount?''

But why would a dishonest person answer such queries truthfully?

``Studies show that those who indulge in shoplifting have a circle of friends with the same attitudes. On the test, they feel they're putting down data which everyone else around them is putting down. Most dishonest people don't see what's wrong with taking things as long as it's small amounts. And they figure if they don't admit to stealing at least a little, no one would believe their answer,'' says Walls at Stanton Corporation.

``If they admit to stealing $50, the probability exists they've stolen $500,'' he adds.

Stanton claims an 87 percent accuracy rate in distinguishing between high-risk and low-risk individuals.

But some academics and business people question the predictive value as well as the ethical and legal ramifications of paper-and-pencil personality tests.

``While past behavior may predict future behavior, the relationship between the two is by no means perfect . . . ,'' write University of Illinois Profs. Paul Sackett and Michael Harris in a 1984 article reviewing honesty tests in the Personnel Psychology journal. But since that article, Professor Sackett says, the evidence validating honesty tests has grown. ``You have to be a really die-hard skeptic to say these aren't predictive.''

Prof. Robert Figlio at the Sellin Center for Studies in Criminology and Criminal Law at the University of Pennsylvania's Wharton School is among the skeptics: ``There are some real reliability and validity problems with these tests.''

He suggests stores are not necessarily rejecting dishonest people, but simply communicating to new and current employees that they're serious about preventing losses. ``When you sensitize people to your concerns about theft, that affects attitudes and performance,'' Professor Figlio says. He contends, however, that employers can convey such concerns without using honesty tests.

Figlio concedes that psychological tests can be useful for helping pick out extremely dishonest people. But ``you also run the risk of discarding potentially valuable, creative employees because of some bizarre responses that don't fit a certain profile.''

And if one doesn't pass an honesty test, ``How do you prove you're not a thief if you're not hired?'' asks Richard Freedman, professor of management and organizational behavior at New York University. ``Bear in mind, these are statements about people's character -- not their ability to perform the job.''

Wharton associate professor Eric C. van Merkenstein, adds: ``I have a lot of problems with introducing a potential new employee to a company with a negative assumption -- that the employee is dishonest. You give a test that says, `Now prove to me you're honest.' ''

But testing firms contend these concerns are often raised and then discarded once a corporation tries the tests. New employees derive satisfaction from passing the test and believing that their workplace is populated by other honest people, studies show. And Mr. Walls at Stanton emphasizes that a test ``should not be the sole deciding factor in deciding to hire somebody. This is an additional aid in the selection process.''

Ira Somerson of Loss Management Group Inc. of Plymouth Meeting, Pa., concurs: ``It's a good tool, but not a panacea. I can see why you'd be opposed because the tests are not perfect or entirely valid, but don't throw the baby out with the bath water. The corporation needs something. Is it fair to expect a business today to simply accept everything you put on an application?''

Mr. Somerson believes the tests should be fine-tuned to each industry. ``They're too generic now, but that's because it's easier to market that way.''

London House tests include questions that may relate not only to an employee's honesty, but to violence and accident proneness. And the firm has recently diversified into managerial personality profiling. Personnel administrators say that acceptance of these tests at the managerial levels is lower but their use is spreading.