Development of a Standardized Measure to Predict Employee Productivity
FRED M. RAFILSON
The problem of counterproductive employees has reached epidemic proportions and is costing companies considerable financial loss. For example, nonviolent crimes against American business cost $50 billion a year, the equivalent of Exxon Corporation's annual sales ( Palimotto, 1983). Even more alarming is the estimate that approximately one-third of all business failures are due to employee theft and dishonesty ( Morgenstern, 1977). According to Hollinger and Clark ( 1983), approximately 40 percent of employees may exhibit some form of dishonesty at work. Significant financial losses may also result from such behaviors as poor job performance, inadequate customer relations skills, absenteeism, tardiness, high turnover, on-the-job accidents, violations of company policy, and on-the-job drug use.
Identifying potentially counterproductive employees before hiring them is a major challenge facing employers. To date, various methods have been pursued to detect tendencies toward counterproductivity, including polygraph screening; biographical data analysis; special keys for standard personality tests; clear- purpose honesty tests, which typically include specific questions about attitudes toward and admissions of theft behavior; and specially developed personality tests ( Ash, 1988). This chapter will focus on the development and validation of the London House Employment Productivity Index (EPI-3) (London House, 1986; Terris, 1986), a broad-based personality-oriented measure designed to predict the successful employee.