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Sales Selection based on Psychometric scores. July, 2014.

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Sales Team Selection report:
EXPLAINING CAPABILITY THROUGH PERSONALITY
And
Other Recommendations
July, 2014.
[Author Name(s), First M. Last, Omit Titles and Degrees]
[Institutional Affiliation(s)]
Sales Selection based on Psychometric scores. July, 2014. 2
Abstract
We recommend names of candidates for two newly created sales positions, based on the
following scores personality and cognitive skills extraversion, communication skills, and
cognitive skills. In order to create a composite score (assign a weights to each of these numbers
to arrive at a weighted average a real number, which can then be used to rank candidates), we
carry out a validation study on the effect of the same scores, obtained identically, of people hired
two years ago on their total sales performance. Stepwise Regression with post regression studies
(examining the models statistical validity), yield the following score for each individual
Scorei = 4709.766* extraversioni -1764.787*cognitive skillsi..
Finally we adopt this scoring to assign each of the present candidates a score. We identify the
two candidates with highest scores: 10026.131 & 8250.342.
We also find that in general extraversion is positively correlated with cognitive skills.
Consequently introvert candidates with high cognitive skills, underperform in sales.
Extroversion, is an inherent personality skill. Although training programs exist mimicking
amicability and extroversion, their ability to convert introversion into extroversion is
controversial, even for individuals with higher cognitive skills.
We suggest a more pragmatic and holistic method. Some people are simply better made for sales,
we conclude. There could be better applicants with lesser cognitive skills, but greater
extroversion in some other branch. Re-orienting people to a job matched according to their
Personality and Cognitive skills is strongly recommended.


Keywords: Personality, Extraversion, Industrial Organization, Sales, Metrics.
Sales Selection based on Psychometric scores. July, 2014. 3
Explaining Capability through Personality

Personality and Cognitive assessments in I/O
Modern organizations are putting increasing weightage on scientifically choosing the
right hire. Many earlier studies list out various measures of personality and cognitive skills on
employee performance. Personality measures are also reliable per se, in the sense that once
constructed and adhered to, they exhibit little variation over time (Barrick and Mount (1991),
Hogan and Nicholson (1988)), and also consistently explain performance of certain job
performances. Since each job role is peculiar to and within an organization, and a choice has
been made among alternative measures (due to costly working hours being spent on
psychometric assessment), it is necessary to make a choice of estimates, ascertain the weights
attached to each of the estimates on situation closely imitating the current work position, in our
case, internal data.










Sales Selection based on Psychometric scores. July, 2014. 4


Table of Contents
Contents
Sales Team Selection report: EXPLAINING CAPABILITY THROUGH PERSONALITY
And Other Recommendations July, 2014. ..................................................................................... 1
Abstract .............................................................................................................................. 2
Explaining Capability through Personality .................................................................... 3
Personality and Cognitive assessments in I/O .................................................................... 3
Table of Contents ................................................................................................................ 4
Data: .................................................................................................................................... 5
Methodology: We regress all the regressors together on Sales Performance. At the time
the data was collected, the personality and cognitive measures are assumed to be independent of
any performance. Thus we assume to have avoided the endogeneity trap. (In presence of
endogeneity, our estimates are inconsistent.) .................................................................................. 6
Results ................................................................................................................................. 7
Recommendations ............................................................................................................. 9
Selection, and Need for coaching: ...................................................................................... 9
Principles of Coaching. ................................................................................................... 9
References .........................................................................................................................11
Summary Statistics (Model Selection and etc.) ............................................................ 12
Sales Selection based on Psychometric scores. July, 2014. 5

Data:
Data has been collected from 10 sales personnel hired two years ago, and still working.
Variables were named salesperformance, extraversion, cognitiveskills and communicationability.
The graphs below, depict correlation between the data.

Particularly, extraversion, Cognitive skills and Communication ability display strong
positive correlations.

Sales
Performance
$
Extraversion
Cognitive
Skills
Communication
Ability
15000 20000 25000 30000
0
5
10
0 5 10
5
10
15
5 10 15
10
15
20
Sales Selection based on Psychometric scores. July, 2014. 6
Methodology:
We regress all the regressors together on Sales Performance. At the time the data was collected,
the personality and cognitive measures are assumed to be independent of any performance.
Thus we assume to have avoided the endogeneity trap. (In presence of endogeneity, our
estimates are inconsistent.)
SalesPerformancei = b1* extraversioni +b2 *cognitiveskillsi +b3*communicationabilityi+


Next based on the results of the Ordinary least squares above, and to avoid over fitting, we carry
out a stepwise regression using backward stepwise algorithm, which does the following.
Fit full model on all explanatory variables.
If the least-signicant term is insignicant, remove it and re-estimate; otherwise, stop.
Do:
If the least-signicant term is insignicant, remove it and re-estimate; otherwise, stop.
Repeatedly, if the most-signicant excluded term is signicant, add it and re-estimate; if the
least-signicant included term is insignicant, remove it and re-estimate;
Until:
Neither is possible.
The final model we have would be the best model in the sense:
All variables are significant at a particular level of significance.
In case of multiple variables being dropped, each variable that is dropped at an earlier stage gets
a chance of being included again if it turns out to be significant as along with the restricted
variables of the new model. Thus all possible sub-models are tested up to a point no further
exclusion is possible. The critical p values of rejection>0.05. Critical p values for acceptance is
0.01 (could be any arbitrary value less than 0.05, as wed see in reports). Criticisms of this
Sales Selection based on Psychometric scores. July, 2014. 7
approach exist, including biased R
2
and problems with Walds statistic for jointly distributed
values which can be avoided, but are beyond the scope of the present discussion.
The only variable dropped is communicationability, which has strong linear correlations with the
variable extraversion. We also know the problems with multicollinearity, so we try regressing
salesperformance on cognitiveskills and communicationability. Since communicationability is
still insignificant at 95 pc CI, we do not brood further on the issue. (i.e. we do not need to explain
salesforce by a factor combining communicationability and salesperformance).
Also the residual normality checks are tried, but with the expectation that they shall be passed,
given small number of observations in the data.

Results
Our Estimated Model is:
SalesPerformancei = 4709.766* extraversioni -1764.787*cognitiveskillsi +


The low variance Inflation Factor (critical can be 10, for overall model), tell us this makes sense.
Our Score for each individual
Scorei = 4709.766* extraversioni -1764.787*cognitiveskillsi

Applicant Score Extraversion Cognitive
Skills
Burt McIntyre 10026.13 7 13
Jane Doe 8250.342 4 6
John Smith 7665.747 5 9
Sales Selection based on Psychometric scores. July, 2014. 8












James
Golstein
7081.152 6 12
Jose Valencia 5900.96 5 10
Elizabeth
Reddin
5305.363 3 5
Levi Ogletree 3551.578 6 14
Susan
Williams
3540.576 3 6
Shawn George 1191.194 4 10
Pat Sylvester -4698.76 2 8
Sales Selection based on Psychometric scores. July, 2014. 9
Recommendations
Selection, and Need for coaching:
Commenting on what is normal level of performance on cognitive skills test is premature, as
performance ought to be determined based on Industry standards, not within organization
standards.
However we present a Box-and Whisker Plot Below which identifies the unique outlier.


Based on variance in scores, Mr. Pat Sylvester, who acquired a negative score is an outlier. He
needs coaching.

Principles of Coaching.
Burt McIntyre and Jane Doe (highlighted), are the selected candidates, projected to work well in
the present environmental challenges of the selected role. Contrasting their scores with those of
Shawn George and Pat Sylvester we find that high extroversion to cognitive skills is more
Sales Selection based on Psychometric scores. July, 2014. 10
important than low cognitive skills per se (this also appears from the relative weightage of the
two scores).
In fact, Burt has cognitive skills second to only Levi Ogletree, fourth from last.
Extroversion, is an inherent personality skill.
Transformative Learning programs exist mimicking amicability and extroversion, based on
observed and validated behavioral patterns, and stories grapevine about their success, their
ability to convert introversion into extroversion is controversial, when applied even on
individuals with higher cognitive skills. (Dena Michelliame, Mathison Jane & Tosey Paul (April
2005)).
Popularly known as Neuro-Linguistic Programming, based on verbal and non-verbal
communication pattern. Machine (Text) Learning and Neuroscience have successfully exposed
traits of successful extraverts vs introverts, (this includes how we successfully grade and detect
extraversion), and teaching these to introverts together with other practical techniques tailored
for the activation of introverts nervous system. Habits like use of words and body language can
be consciously acquired over time, under trained clinical supervision, which could benchmark
the progress. These are, clearly expensive, considering the quality and amount of supervision
required, and are time consuming, if at all viable (Dena Michelliame, Mathison Jane & Tosey
Paul (April 2005)).
We suggest a more pragmatic and holistic method. Some people are simply better made for sales,
we conclude. There could be better applicants with lesser cognitive skills, but greater
extroversion in some other branch. Re-orienting people to a job matched according to their
Personality and Cognitive skills is strongly recommended. Inter-disciplinary training is strongly
recommended, primarily to judge the fitness of a particular candidate to a role.
Sales Selection based on Psychometric scores. July, 2014. 11
References
Barrick R Murray,Mount K Michael,(Spring 1991), The Big Five Personality Dimension and
Performance. Personnel Psychology, 44-70
Hogan, Robert; Nicholson, Robert A., (Aug 1988). The meaning of personality test scores.
American Psychologist, Vol 43(8) 621-626
Matthews, G. and Deary, I. (1998). Personality
Traits. Cambridge University Press, Cambridge
Dena Michelliame, Mathison Jane & Tosey Paul (April 2005). Mapping Transformative learning
The Potential of Neuro-Linguistic Programming. Journal of Transformative Education, 140-167














Sales Selection based on Psychometric scores. July, 2014. 12
Summary Statistics (Model Selection and etc.)






Sales Selection based on Psychometric scores. July, 2014. 13