Identifying Quality Originators

Patricia Sherlock

In my recent visits to lenders, the question of what makes a good sales assessment has come up. The issue is a hot topic because more management teams regard the quality of originators as an essential factor for success in mortgage banking. Hiring the right people who can sell is critical for companies that have the opportunity to grab market share.

When originators are low-performers (as so many are in our industry), gaining market share can be next to impossible. Since 2003, the industry average in prodution has been 3 units (I know you are saying, “I can’t believe it,” but it is true). Obviously our selection process has not been very good with such low numbers. Of course, not all companies have such poor performance but an industry average is an industry average!

Since there are so many vendors in assessment testing and much of the testing language can be confusing, I thought I would use the next two emails to discuss what executives should be asking when selecting an assessment vendor. As with any significant purchase, it is important to ask the right questions to get the best results.

What makes an assessment legal in the selection process?

There are two legal criteria for employment tests: (1) it must be properly validated and (2) it must be job-relevant. If the assessment meets these criteria, then it is legal to use the test.

What does it mean when a test is “job-relevant”?

It means that there must be a demonstrable link between what the employment test measures and what the job requires. The test provider is responsible for making sure that the employment test measures the skill or attitude that it is designed to measure, through a process called validation and the company that uses an employment test is responsible for making sure that the job description demonstrates the need for behavior or attitudes that the employment test measures.

What is “properly validated”?

Validation is the means of determining whether a test accurately predicts job performance, not simply identifying common personality traits.

Validation is not about what correlates with job performance. It is supposed to be a validation. The guidelines for validation are clear. An acceptable process of validation is explained in the Uniform Guidelines on Employee Selection Procedures. These guidelines include prerequisites for conducting a job analysis that includes fairness, representative samples, personality traits, critical knowledge, skills and abilities, statistical sampling, statistical procedures and other important criteria.

If a test is really valid, it should show that a candidate’s test results were significantly different from the low performers or the top performers.

If a testing vendor says that they will benchmark with less than 50 employees and develop a top performer profile, walk away from them quickly because they have not developed a statistical sample size.

What about MBTI, DISC, Social Styles or call reluctance tests?

While interesting and certainly popular at different times, these types of tests do not predict performance and therefore will fail over time.

Validation is the only means of determining whether an assessment accurately predicts job performance, and is not simply identifying common personality traits.

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