Intellectual Capital Management: Holistic Assessment

By Paul Barrett on September 17, 2019

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Intelligence is typically dealt with in work and educational environments by using IQ tests aimed at measuring “ability”.  It seems that academics and HR practitioners have bought into the concept of IQ wholesale. This implies that they tend to accept that candidates who can speedily/swiftly apply logical-analytical, convergent reasoning to highly structured, domain specific test content (such as verbal, numerical and spatial IQ test items), will outperform others with lower IQ test scores. IQ is thus seen as a one-dimensional continuum; a view that has unfortunately globally permeated the understanding of cognitive functioning.

The acceptance of this view is probably based on decades of research findings that IQ tests are better predictors of work performance than say Personality test results; that there is a general factor underlying all cognitive functioning, referred to as g or general intelligence; and that different socio-economic and race groups show different levels of intelligence.

These perceptions are, however, flawed; as IQ tests assess only a small component of the cognitive skills required in complex, dynamic and vague work environments. Findings regarding g or general intelligence are also largely a function of the comparable types of test items used to measure intelligence and the statistical techniques, namely correlations and factor analyses, utilised to analyse the results. Cross-cultural differences in IQ may also be linked to the decontextualised item content and the limited nature of conventional test psychometrics.

The result of using these IQ type tests for selection purposes may just result in what Professor Robert Sternberg refers to as gathering “smart idiots”. “Cleverness”, as traditionally and narrowly based on IQ, has never impressed Sternberg. He comments: “…people who have high IQs, they have test scores and degrees, but put them in a job or a relationship and they make a mess of it.” He concludes that to “…prevent clever people falling into the fallacies of their own egocentrism, omniscience, omnipotence and invulnerability” all of which he regards as stages of stupidity, they “need to develop wisdom.”

If IQ tests have failed society, what would then best predict a person’s cognitive functioning within the work environment? To answer this question, it may be useful to list the various research questions that have been posed in intelligence research. Included are questions regarding the:

  • what” of intelligence as embraced by Differential psychology and the IQ tradition.
  • how” of thinking as reflected by the Information Processing paradigm, and cognitive and computational neuroscience;
  • when” of cognitive capacity explored by Developmental psychologists such as Piaget and Vygotsky; and the
  • where” of competence as researched by the Contextualist school.

Each of these approaches to cognitive functioning, is characterised by specific assessment and development practices. The diversity of opinions in addressing a concept as fuzzy as intelligence have thus provided many useful insights, but the research community has so far failed to agree on a definition of intelligence, leaving us with a “many worlds” conclusion.

Given the weaknesses inherent to IQ testing, combined with the seeming lack of adequate alternative assessment methodologies, most HR practitioners have thus turned to structured interviews and assessment centres – especially at executive levels. These two test methodologies are rooted in the Contextualist school with its emphasis on competence.

Structured interviews involve discussions of a person’s career progress and work experience as well as their work-related preferences and ambitions.  However, factors that may interfere with the validity of structured interview outcomes include the inherent unstandardised form of the assessment; the test candidate’s verbal skills and eloquence; retrospective justification of own performance; exaggeration of own work-related responsibilities and skills; the rapport between the interviewee and the interviewer; the subjective opinions of the interviewer; and therefore the interrater reliability of the assessment results.

Assessment centres involve the application of job-related skills as observed by evaluators. Although assessment centre methodologies largely involve real performance, which enhances the validity of the assessment approach, the cost of such exercises has in many cases resulted in the use of questionnaires that are electronically mailed to respondents for written answers. There is thus no way to ensure that the responses are those of the actual candidate. In addition, the interpretation of both real and written responses relies upon a test candidate’s previous experience and thus does not necessarily indicate their future potential, plus the responses are subjectively interpreted by evaluators.

Quite simply, what is required in the work environment is relevant information on a person’s cognitive functioning which supersedes that of: limited IQ test results that are notoriously cross-culturally biased; the subjective opinions of facilitators on self-report information regarding a person’s own cognitive functioning (as is typical of interview situations); and the application of previous management skills – which do not predict learning potential.

Ideally, an Intellectual Capital Management approach should involve:

  • skilled and informed HR practitioners;
  • an understanding of the industry, the value proposition of the organisation as well as its core competencies;
  • the job-related or functional competency requirements of work at various levels of complexity (e.g. as specified by a model of job complexity);
  • an understanding of the organisation’s potential talent pool – both currently and in the future;
  • holistic assessment of all individuals – not only cognition, but also in terms of levels of consciousness or values, as well as motivation;
  • the matching of people and job profiles;
  • job structuring where necessary;
  • developmental initiatives including performance feedback, training, coaching, mentoring, multiskilling and knowledge transfer platforms; as well as
  • continuous measurement, feedback and ROI evaluation.

In terms of the holistic assessment of people, as mentioned above, information on the following aspects are particularly relevant:

  • Knowledge and skills, in other words, educational and work experience;
  • Cognitive functioning which includes cognitive preferences, complexity capabilities and learning potential. These aspects will inform the work environment which the person is best suited to – be that of an operational or strategic nature;
  • Motivational factors, including current energy; factors that drain and energise the person; their degree of self-insight; their interests; their dynamic personality patterns; and their motivational profile;
  • Values and levels of consciousness which informs a person’s worldview and determines how they will perceive matters, make decisions and apply their talents in the work context.

Practical guidelines for how to approach assessment of these attributes are set out in part 3 of this series, with part 4 detailing the assessment products themselves.

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