Character Tests for Job Seekers Employers Use Method to Avoid Costly Errors, but Experts Doubt Validity of `Honesty Tests'

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EMPLOYERS lose $40 billion to $50 billion a year in stolen merchandise and cash register money, says Dan Dalton, a management professor at Indiana University.

Thirty-eight percent of this is taken by dishonest employees rather than shoplifters, according to a National Retail Federation survey. In addition, billions of dollars are lost on unreliable employees - those with unproductive behavior, high absenteeism, or who leave or are fired after a short time on the job.

To beat these problems, more than 5,000 United States firms turn to "integrity" or "honesty" tests to weed out undesirable job applicants. Between 2.5 million and 5 million pen-and-pencil tests are administered each year to screen prospective hires.

Though these written tests have been on the market for decades, use has boomed since 1988, when Congress declared the polygraph (lie detector) test illegal, says George Paajanen, vice president of PDI, a human resources consulting firm in Minneapolis.

Dr. Paajanen criticizes vendors of such tests, saying they "expect dishonest people to take this test and answer it honestly."

Gerald Borofsky, president and founder of Boston's Bay State Psychological Associates Inc., another consulting firm, agrees. He says firms have marketed these tests for 25 years, trying to convince employers that honesty is quantifiable, but it is not.

The tests examine a person's attitudes toward theft, as well as past activities. The results are used to predict future behavior. But "nothing suggests that we will continue to do what we have done in the past, especially if it is a questionable activity," Professor Dalton says.

Honesty tests are illegal in two states, Massachusetts and Rhode Island, and legislatures in other states are considering the issue.

Many businesses nationwide are using an alternative form of pre-employment test that tries to determine a person's potential productivity, job commitment, and dependability. These tests explore a person's background, opinions, and attitudes.

One such exam, PDI's Employment Inventory (EI) test, includes three sections of questions. Some examples of true-false questions:

* "At this time in your life, a job is a job, not a career. …