Submitted To:

Mam, Sana Saleem

Submitted By:
Sonia Arif # 50
4
th
Semester
DEPARTMENT OF BUSINESS MANAGEMENT SCIENCES
UNIVERSITY OF ARI!U"TURE
FAISA"A#A$
1
Dedicated to al mighty Allah for giving us
strength & blessings & our Teachers and
Parents.
2
3
Executive Summary
Psychometric tests can play a very useful role in both the assessment and the
development of individuals. They are written, oral or practical tests that quantify the
different human behavior. Five essential features of these tests are validity, reliability,
standardization, objectivity and differentiation. The three basic types are aptitude
testing, ability testing, personality profiling, they can give objective evidence of the
human attributes they measure, and have been shown to be one of the best predictors
of job performance when used in selection. In practice, they will generally be used in
conjunction with other methods such as interviews in order to give the whole picture .
Increasing, organizations in Pa!istan are using psychometric tests for recruitment,
training " development and performance management. They are also helpful in
increasing the commitment of employees with their organization. In this research, the
#abib ban! limited is analyzed and it is seen that how psychometric tests are important
for the ban! and how these tests influence the #$% wor!ing and performance. &fter a
detailed analysis and concluding remar!s, few pertinent recommendations for the
effective use of psychometric testing are made.
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LIST OF CONTENTS
Heading
#
TITLE PAGE
I Intro%&'tion 0(
II Metho%olo)* +(
III Fin%in)s ,-
IV ra.hi'al Re.resentation ,,
V In%&strial Anal*sis 44
VI "earnin) 4/
VI I Re'ommen%ations 40
VI I I !on'l&sion 5-
5
6
Intro%&'tion1
Psychometric tests are tools for measuring the mind ('metric' = measure; 'psycho' =
mind). They are basically tools-that may be good or bad depending upon whether they
are being used or abused2 The use is related to the particular purpose on which they
are being employed, what ind of information can it pro!ide to the person or about the
person , how results are sillfully interpreted and how they are meaningfully integrated
into the data , leading to worthy action decisions.
Psychometric tests are designed to pro!ide a consistent and effecti!e measure of
people's traits, abilities, sills, and interests. The ability to measure these characteristics
enhances decision maing during recruitment and selection, indi!idual and team
de!elopment, organi"ational change and career directions. Psychometric tests can be
used to predict #ob performance, resol!e conflict, impro!e communication, mae career
decisions and to identify training needs, so on and so forth.
The use of Psychometric tests to select both e$ecuti!e and staff le!el employees is
%uite popular. &t is necessary to ha!e reliable and !alid tools that are able to
discriminate between the most potentially-effecti!e employee and the one who will not
fit the #ob. Psychometric assessment is an ob#ecti!e and scientific tool that is able to
contribute to the !alidity and successful outcome of the recruitment, selection and
de!elopment process. The Psychometric tests are de!eloped for specific role. &t
assesses !erbal and numerical checing sills, for the clerical #obs there are test which
is designed to chec the !erbal, numerical, office !ocabulary, and the ability to plan and
organi"e. The companies also ha!e tests for technical #obs such as technical checing
and faultfinding, nowledge of electronics, and the ability to comprehend diagrams.
Tests would assess the differences between indi!iduals or between the reactions of the
same indi!iduals under the different circumstances.
The emergence of computers has also made the assessment process user friendly and
with hooup to the internet the profile of the candidate in!ol!ing his proficiency in
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mathematical problems, comprehension or attitudes will be displayed instantly with
specific recommendations' hire or do not hire or may be hire.
Relia3ilit* is the internal consistency of a test. The consistency of scores obtained by
the same person when retested with the identical test or with an e%ui!alent form of the
test. &t means accuracy. &t shows ()ow good is this test*. Test-reliability is the
consistency of scores obtained by the same person when retested with the identical test
or an e%ui!alent form of the test. +elati!ely high degree of reliability is re%uired to mae
accurate predictions from the test about the indi!iduals.
Vali%it* refers to the degree to which the test actually measures what it purports to
measure. &t means purpose or truthfulness of the test. &t pro!ides a direct chec on how
well the test fulfills its function. The construction and use of test imply that the
instrument has been e!aluated against criteria regarded by e$perts as the best
e!idence of the traits to be measured by the test.
A norm is an a!erage, common, standard performance under e$perimental conditions.
,any of the psychological tests usually tend to ha!e norms. They ha!e to be accurate.
-orms are in the form of age, grade, percentile ran, sten scores, stanine scores. The
norms should be meaningful with regard to purposes for which the test is intended and
to the group of persons with whom it is to be used.
Categories of Psychometric Testing:
Psychometric testing falls into three main categories'
.. /ptitude testing
0. /bility testing
1. Personality profiling
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A3ilit* testin) '
/bility tests measure a persons potential, for instance to learn the sills needed for a
new #ob or to cope with the demands of a training course. /bility tests are not the same
thing as Tests of /ttainment.
Tests of attainment assess specifically what people ha!e learnt e.g. mathematical ability
or typing sills. 2f course what people ha!e learned does depend on their ability in that
domain in the first place so the scores on the two types of test are conceptually lined.
The ma#or difference between tests of ability and tests of attainment is in the way the
scores from both types of test are used. ,any ability test items loo identical to those on
attainment tests but attainment tests are different in one crucial respect - they are
retrospecti!e' they focus on what has been learnt and on what a person nows and can
do now. /bility tests are prospecti!e' they focus on what the person is capable of
achie!ing in the future or their potential to learn.
3ear in mind that some attainment is re%uired before certain abilities can be measured,
for instance, we need a certain nowledge of mathematics before our numerical ability
can be measured. &n addition a test of attainment cannot be used to directly infer ability.
4chool e$aminations are one e$ample of measures of achie!ement or attainment, and
while we might draw some conclusions about an indi!idual's ability on the basis of
5647 results we would not use them as a direct measure of ability since a less able
student may wor harder than a more able student to produce a better score.
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5eneral ability is usually di!ided up into specific abilities, reflecting the hierarchical
structure of intelligence that is generally accepted by most worers in the field. 4o a
general ability test might be composed of specific numerical, !erbal and spatial ability
scales brought together as a test battery. They can then be scored and interpreted
indi!idually as a specific ability or aptitude measure, or together as part of a general
ability measure.
A.tit&%e testin)1
There is no widely accepted definition of the difference between ability and aptitude.
,ost people would agree that to some e$tent the two terms refer to the same thing'
aptitude referring to specific ability, and ability referring to general aptitude. 8e could
probably !iew ability as underlying aptitude, and aptitude as being more #ob related then
ability. 9or instance a computer programmer might score highly on a !erbal ability test
and highly on a programmer aptitude test but not the other way around.
/ptitude tests tend to be #ob related and ha!e names that include #ob titles such as the
Programmers /ptitude 4eries (4):). /bility tests on the other hand are designed to
measure the abilities or mental processes that underlie aptitude and are named after
them e.g. 4patial /bility - 5/T (/47).
/n ability test such as the 5eneral /bility Test (5/T) is made up of four tests of specific
ability - numerical ability; !erbal ability; non-!erbal ability and spatial ability. They can be
used separately to assess specific abilities or together to assess general ability. There
are tests which measure only general ability such as the 4tandard Progressi!e ,atrices
(which is one of the purest measures of general ability a!ailable) and there are tests
which only measure specific abilities such as the /67+ ,echanical +easoning Test.
;ou will find with e$perience that some tests fall into more than one category and that
the distinction between the !arious categories is not always an easy one to define.
4ersonalit* .rofilin)'
Personality is a term which is commonly used in e!eryday language but which has been
gi!en a particular technical meaning by psychologists. 8hen we discuss personality we
must remember that it is not a single independent mechanism but closely related to
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other human cogniti!e and emotional systems.
7!en if one scores well in aptitude tests it doest not mean that one will be suited to a
#ob. 2ne can be good at doing something but may hate to do a #ob which depends on
one's personal characteristics and %ualities. Personality &n!entories can assess items
on a !ariety of personality aspects such as'
--)ow you relate to other people
--;our wor style
--;our ability to deal with emotions (your own and other people's)
--;our moti!ation, determination and general outloo
--;our ability to handle stressful situations
<nlie aptitude tests, there are no right and wrong answers, in personality in!entories
and occasionally there is a time limit. 4electors will be looing for a particular type of
profile but certain special characteristics which are suited to a #ob.
,any employers want candidates with a balance of personal %ualities, for instance,
being able to wor independently and interdependently, get along with peers, tae
charge of situations , proacti!e, organi"e, and being focused on achie!ement etc. There
are always checs within in!entories to detect whether the respondent is gi!ing a false
picture by way of inflating one's self. 2nce this is detected employers won=t be happy in
hiring that candidate.
7mployers can use psychometric tests at any point during the selection process.
4ometimes they are used at the beginning, as a way of screening out unsuitable
candidates. 2ther employers prefer to use them towards the end of a selection process.
Psychometric tests are almost always used in con#unction with more traditional selection
methods, such as a one-to-one inter!iew. This means that e!en one does not do
brilliantly with psychometric tests, one can still impress the selectors in other ways.
+esearch consistently shows that psychometric tests are one of the most reliable forms
whether or not a candidate is suitable for a #ob. /ll )+ managers now, tend to ha!e faith
in the utility of psychometric tests.

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O35e'ti6es1
8hy psychometric tests are important
)ow can they add !alue to )+
)ow psychometric tests help the applicant to con!ince the employer
)ow they influence the producti!ity of the employees
The use of psychometric tests in Paistan especially in baning sector
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4s*'hometri' Tests A%% Val&e To 7R1
Hiring of Employees:
/s psychometric testing becomes more popular in candidate e!aluations, the benefits
for both the employer and applicant are becoming clearer. There are many benefits to
these e!aluations for both the employer and the applicant. 3oth groups of people try to
use the test to their ad!antage and both are e$tremely capable of doing so.
8hen deciding between two or more e%ually comparable candidates for a position, the
employer might want to use the results of the ob#ecti!e psychometric test to determine
which is most compatible for the #ob. 2ne person may ha!e a slight edge o!er another
in personality or ability which may lead to the best candidate being hired.
)iring applicants who ha!e had career switches or who ha!e a prior record of %uitting
#obs may be a hard to do. )owe!er, using the results of a personality and ability
assessment, an employer might be better able to determine whether or not the applicant
is liely to wal out on another #ob or if this #ob is truly what they ha!e been seeing.
,ost importantly, psychometric testing pro!ides employers with an insight into an
applicant's psychology that could otherwise tae years to determine. &t can help show
the employer who the applicant would be most compatible woring with and what types
of pro#ects the applicant might be best able to accomplish. 3asically, the testing can
help show the employer what the applicant is truly capable of.
&n some cases, there are many applicants who all appear to be similarly %ualified
through inter!iews and general hiring strategies. 8ith the use of psychometric testing,
the employer can narrow down the scope of prospects through completely fair and
ob#ecti!e measures and can use the results of the test to help supplement the
sub#ecti!e ness of con!entional hiring mechanisms.
The use of personality and ability assessments can also help the applicant to con!ince
the employer that they truly are the most suitable candidates for a #ob. 2f course there
is only so much one can say during an inter!iew and trying to balance modesty and
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confidence is %uite a challenging feat. 9ortunately, the use of an ob#ecti!e measure can
help demonstrate the applicant's compatibility.
4ome applicants may find that it is difficult to truly e$press them when under pressure.
9or these types of applicants, personality assessments are e$tremely beneficial. &t might
be the case that the applicant is so ner!ous that the employer may ha!e some
septicism about the applicant's personality. &f this is the situation, the ob#ecti!e
personality assessment may help resol!e the septicism and pro!ide !aluable feedbac
to the employer that might not otherwise be recogni"ed in the inter!iew alone.
&n some cases, the use of psychometric testing can help eliminate competition. 9or
employers looing hea!ily at the test results, some applicants may be released because
they do not fit the profile of a compatible candidate. This is e$tremely beneficial to
applicants who may feel as though their inter!iew did not go as well as planned but still
hope to show that they are indeed the best applicant by ob#ecti!e measures.
5enerally, Psychometric testing is the more ob#ect measure in the hiring process. 8hile
some people are better able to use charm and wit to their ad!antage, some are not.
>uring the hiring process it is nice to ha!e at least one mechanism of ob#ecti!eness that
can help compensate for the employer's ability to be charmed.
Psychometric testing has the capabilities of being beneficial to e!eryone. /s long as
both groups see the benefits of the tests, both groups ha!e the capabilities of using
them to their ad!antage.
Training and Development'
Training and de!elopment can be initiated for a !ariety of reasons for an employee or
group of employees, e.g.,'
8hen a performance appraisal indicates performance impro!ement is needed
To (benchmar( the status of impro!ement so far in a performance impro!ement
effort
/s part of an o!erall professional de!elopment program
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/s part of succession planning to help an employee be eligible for a planned
change in role in the organi"ation
To (pilot(, or test, the operation of a new performance management system
To train about a specific topic
6ompanies pro!ide specific training to employees according to their needs, personality
traits and these traits e.g. intro!ert people, asserti!eness can be identified by the
psychometric testing which enables organi"ation to identify the training needs for the
employee.
Training benefits the organi"ation in the following way;
&ncreased #ob satisfaction and morale among employees
&ncreased employee moti!ation
&ncreased efficiencies in processes, resulting in financial gain
&ncreased capacity to adopt new technologies and methods
&ncreased inno!ation in strategies and products
+educed employee turno!er
7nhanced company image, e.g., conducting ethics training (not a good reason
for ethics training?)
+is management, e.g., training about, di!ersity training, etc
Performance Management:
Performance management includes acti!ities to ensure that goals are consistently being
met in an effecti!e and efficient manner. Performance management can focus on
performance of the organi"ation, a department, processes to build a product or ser!ice,
employees, etc.
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The easiest way to impro!e performance is to identify the best people and replicate
them. Too many businesses do not really now who their best people are. They must
use measurable criteria to identify their top performers.
The organi"ations as super!isors to e!aluate employee=s performance by either
raning or rating employees on a no of predetermined dimensions, traits or beha!iors.
>ifferent methods are used to rate the employees e.g. graphic rating scale. 3eha!iorally
anchored rating scales (3/+4) and the beha!ioral chec lists. Person who rate
performance is supposed to b fair and a!oid rating errors such as leniency, se!erity,
halo effect etc. &n Paistan, most of the organi"ations are using the 1@A feed bac.
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Users of 4s*'hometri' Testin)1
#&siness O8ner1 3usiness owner would use psychometric testing to find the person
who is the right fit for the #ob. &t helps them minimi"e costly hiring mistaes and sa!e
you money.
Re'r&itment !ons&ltant1 They use psychometric testing mainly to impro!e placement
success.
Mana)er1 - /n employee may #oin the company for !arious reasons, but it is their
relationship with their manager that determines how long they stay. ,anagers play a
significant role in influencing the employee=s commitment le!el and retention. 5ood
relationship sills helps the manager produce better performance, and gi!es the
employee greater #ob satisfaction and higher moti!ation, thereby producing more
effecti!e managers.
!oa'h or Mentor1 5ood coaches understand why people act a certain way and beha!e
the way they do. They now their clients personality style. This leads to effecti!e
communication and goal setting.
Sales .erson1 4ales people who build great relationships with their customers ha!e the
greatest rate of success. 4ales people use psychometric testing to help them
understand each customer=s buying style and change their selling style accordingly.
!areers A%6isor1 Psychometric testing helps match the student=s personal style and
talents with suitable career choices. &t taes a holistic !iew of career management and
helps the student find their natural talents.
4arent1 Psychometric Testing will help the parents to understand their children better
and easier way to handle them. &f their child is bursary le!el and need to start looing at
career choices, these tests are a way to help them.
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St&%ent1 -othing is as important as choosing the right career for you. 2ur tests are an
e$cellent tool in helping you.
!areer 'han)e1 &f someone lacs that something e$tra in his career, or sometimes wish
him was somewhere else instead of at wor, he needs to tae a test to find out where
he belong. )e can use it to disco!er his uni%ue talents and gifts. /nyone can benefit by
it.
Im.ortan'e Of 4s*'hometri' Tests1
4s*'hometri' tests ha!e been used since the early part of the 0Ath century.
They were originally de!eloped for use in educational psychology. These days,
outside of education, psychometric testing has taen an entry into the business
world .
4s*'hometri' tests are a way of assessing a person's ability or personality in a
measured and structured way. They are used to measure the indi!idual
differences such as ability, aptitude, interests, personality and other aspects.
4s*'hometri' testin) gaining popularity in organi"ations Psychometric tests are
de!eloped especially to reduce the problems encountered by employees and
managers. 4uch as, one of the biggest problems employers face today is the
%uality of the staff they hire. The reason is easy to understand; inter!iews don't
necessarily gi!e the right picture about the candidates. &nter!iewee's generally
come with some prepared %uestions and in the short time a!ailable it is difficult to
#udge a candidate's capabilities. / bad-hiring decision can be costly and time
consuming.
4s*'hometri' assessments play an important role by being consistent and
impartial and they can enhance the ob#ecti!ity of the selection process. They are
standardi"ed in terms of the %uestions ased, the time allowed, and instructions
gi!en, which means all candidates are placed on an e%ual footing, maing the
assessment fair and ob#ecti!e. 3y reducing selection errors, organi"ations can
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reduce staff turno!er, training costs, lost opportunities and stress to indi!iduals.
4o this is the reason psychometric testing has now become widely accepted as a
benchmaring tool in the selection process.
Psychometric Tests Aim at 10 Top Organiational
!enefits1
-2 Attra't 3etter staff
&t is now widely accepted that organi"ational success is to a large e$tent dependent on
the hiring and moti!ating of talented staff. Psychometric testing is as much about
liberation as it is about putting people into bo$es. 8hen it is used well, it helps
indi!iduals to become more self-aware, and this psychological well-being is moti!ational
for e$isting staff, and attracti!e to potential staff.
+2 Ma9e sele'tion more o35e'ti6e
Psychometric testing forces )+ to thin more clearly about roles, what attributes those
roles re%uire, and what those attributes specifically mean. &t also reduces dependence
on inter!iews, with se!eral accompanying benefits. 2b#ecti!e facts become as important
as interpersonal relationships in selection, and companies a!oid the trap of using
inter!iews as a way of finding people who are the same as those who already wor
there
,2 Re%&'e sele'tion mista9es
)iring the wrong staff is costly. /d!ocates of psychometric testing claim that it maes
selection more accurate. ,arina /ldridge, head of re sourcing and recruitment at The
/udit 6ommission, e$plains why she uses it for graduate recruitment. (8e spend a lot
of money on training graduates. &t is important to be able to predict which ones will pass
their BauditC e$ams in four years' time. 8e e$pect the new tests we are introducing will
gi!e us a much clearer idea of which candidates will succeed.(
42 "o8er re'r&itment 'osts
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3y weeding out more candidates before in!iting them to inter!iew, an organi"ation is
able to lower tra!el e$penses and administration costs. 7!en more significantly, it is
possible to reduce the time senior e$ecuti!es spend inter!iewing candidates.
52 Minimi:e le)al ris9s
Psychometric testing can also reduce the ris of being sued by candidates claiming they
were re#ected for reasons other than competence or suitability.
(2 Re'r&it faster
3y pre-screening candidates using an online system of psychometric tests, an
organi"ation can speed up its recruitment process. 3y using online testing,
organi"ations can reduce the hiring time.
/2 Meas&re the re'r&itment .ro'ess
Pro!ing the effecti!eness of a hiring strategy is always difficult. 4coring helps to pin
down something ephemeral and the scores can assist employers in maing a fairly clear
return on in!estment calculation of the effecti!eness of psychometric testing. They can
particularly do this when they hire a lot of staff, can distinguish clearly between good
and a!erage performers, and when good performers produce considerably more !alue
for the organi"ation than a!erage and poor performers.
;2 Im.ro6e 're%i3ilit*
4imply using psychometric testing tends to impro!e the credibility of the process. 2ther
departments recogni"e that )+ is taing a more 'scientific' approach to the hiring
process. &t maes it clear to candidates that the roles, and the person in it, are !alued.
&n!estors and customers may also be impressed. 3ut 5wyn +ogers, director of Daisen
6onsulting, points out the dangers of relying too hea!ily on it as a result. (6redibility
plummets when ma#or decisions are made solely on the basis of psychometric testing,(
she says.
02 #&il% teams
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Psychometric testing allows indi!iduals to find out about their own strengths and
weanesses, and also about those of the people around them. This promotes more
effecti!e woring relationships and impro!es team performance. 3ecause by introducing
people to an issue and to different ways of approaching it can ha!e a real impact on
interactions in the worplace.
-0 Enhan'e mana)ement an% %e6elo.ment
&n the same way, managers are liely to communicate better and ha!e a clearer
understanding of the needs of employees. Training and management in some
organi"ations is often focused on less talented staff. Psychometric testing can enable
an organi"ation to use its training and management budget more efficiently by focusing
on the staff with the most potential. /t the !ery least, it pro!ides a clear and ob#ecti!e
basis for a con!ersation about indi!idual de!elopment.
"ome Disadvantages#
&nternal candidates for #obs can sometimes feel disgruntled because they are
being treated in the same way as e$ternal candidates
4ome candidates may be ner!ous about testing and will need to be put at their
ease
4ome tests are more comple$ to score; training is re%uired for administration and
interpretation
The initial set-up can be costly, including the initial purchase of re-usable
materials and training of test administrators and interpreters
There may be an initial resistance to using tests, often based on misconceptions,
which needs to be o!ercome before they can be successfully introduced into an
organi"ation
Tests may not be able to measure the 'whole candidate' and will typically be used
in con#unction with other information
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4s*'hometri' Testin) in 4a9istan1
8orldwide, most of the companies are using this type of tests. :ie in <D, o!er EFG of
the Times top companies use these tests. /nd in <4/ o!er HAG fortune companies are
using these tests.
EAG of large companies use psychometric tests both in the assessment of potential
recruits and to identify the training and de!elopment needs of e$isting employees.
)owe!er, as the psychometric maret continues to grow, with more and more tests
a!ailable online, it becomes increasingly difficult for organisations to mae the right
decisions about psychometrics.
3ut in Paistan the use of psychometric testing is not common, but now the trend is
establishing due to its positi!e impacts on organi"ations. That=s why most of the sectors
are attracting towards these tests, which are some of the largest financial institutions
and cellular telecommunication, &T companies in Paistan, e!en now mareting and
retail firms are maing its space with e!er increasing rate.
6res3an, )abib 3an ltd, -ational 3an of Paistan, <nion 3an, -&3 3an, <nited
3an :imited, 7li :illy, /rif )abib &n!estments, /T62 :aboratories, P&6&6 &n!estment
3an, /3- I /,+2 3an, -ational 6ommission for )uman >e!elopment, 2+&J
:easing, P&/ (Paistan &nternational), <fone, telenor and ,obilin are some of those
organi"ations who use these tests. -o doubt the concept of these tests are not common
in ci!il ser!ices, police forces and armed forces, they are maing the e$tensi!e use of
psychometric tests for a long time.
"ome Errors $ Pro%lems:
&n Paistan psychometric test mostly fails to get proper outcome, reasons are;
3iasness in e!aluation of test taers
Poor designing of test
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Poor implementation of test
:ac of awareness
<sers do not read the test manual properly
:ac of interest of managers
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7a3i3 #an9 "imite%1
)3: was the first commercial ban to be established in Paistan in .KLE. 2!er the
years, )3: has grown its branch networ and become the largest pri!ate sector ban
with o!er .,LFA branches across the country and a customer base e$ceeding fi!e
million relationships. &t is fully automated and computeri"ed and pro!iding wide range of
baning ser!ices.
8ith a presence in 0F countries, subsidiaries in )ong Dong and the <D, affiliates in
-epal, -igeria, Denya and Dyrgy"stan and rep offices in &ran and 6hina, )3: is also the
largest domestic multinational. The 3an is e$panding its presence in principal
international marets including the <D, </7, 4outh and 6entral /sia, /frica and the 9ar
7ast.
Use of 4s*'hometri' Tests In 7#"1
&or recr'itment $ "election P'rposes:
,eritocracy is an integral part of )3:=s recruitment policy. Their merit-based recruitment
process incorporates the principles of e%ual opportunity and leads to the appointment of
the most capable candidate. 9or ensuring openness, efficiency and fairness in the
selection process, )3: use the psychometric tests.
Psychometric tests at )3: aims to identify the most suitable person for the #ob
assessed on the basis of the following parameters'
4ills and 6ompetencies
/bilities and /ttitude
7ducational 3acground
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7$perience
3eha!ior
&nterpersonal M 6ommunication sills
&or Training $ Development:
)3: focus is on attracting, de!eloping and retaining the best employees in
compensation and benefits pacages. Their compensation and benefits strategy
combines the need to maintain a high performance culture along with maret
competiti!eness. )3: arranges training programs according to the needs of the
employees and according to their traits.
Performance Management "ystem:
/t )3: growth is not a function of time but rather of performance. )3: belie!es that as
the performance of employees impro!es, the role that they play within the organi"ation
will accelerate to reflect the input. )3:=s performance management and reward systems
ensure that goals are met in an effecti!e and efficient manner. 9or impro!ing the
performance management system, it also uses psychometric tests to chec the
performance of the employees and for rewarding the employees accordingly. )3:
defines a clear path for employees to contribute to the organi"ation=s o!erall goals,
peppered with regular re!iews and feedbac to help them to gauge their progress.

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27
Metho%olo)*
"ampling:
The sampling population of this research includes F managers of different
branches of )3: in 9aisalabad. These branches are'
)3: PT6: 3uilding 3ranch
)3: 4tayana +oad 3ranch
)3: +egional )ead Nuarters
)3: </9 3ranch
Tool Of Data Collection:
>ata has been collected through %uestionnaire in this research.
Nuestionnaire has been designed by eeping in
mind the ob#ecti!es of research pro#ect. &t is di!ided into different parts to get the
data and information to meet the ob#ecti!es of the pro#ect. & selected different
!ariables to study the potential sources and effects of psychometric tests on the
baning sector. & also studied how they influence the )+ functions.
28
<&estionnaire
4s*'hometri' Test
NAME======================
$ESINATION=================22
NAME OF T7E #AN>===================2
===============2
(Please read the statement and indicate the le!el of agreement according to the gi!en scale)
-2 $o *o& feel that .s*'hometri' test a%%s 6al&e to 7R .ra'ti'es?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
+2 $oes *o&r 3an9 rel* on .s*'hometri' testin) for .re em.lo*ment s'reenin), staff
%e6elo.ment, team3&il%in), mana)ement trainin) an% lea%ershi. trainin)?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
,2 $o *o& feel that 4s*'hometri' tests .ro6i%e a 'onsistent an% effe'ti6e meas&re of
.ersonal@s traits, a3ilities, s9ills, an% interests?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
42 $oes .s*'holo)i'al test is essentiall* an o35e'ti6e an% stan%ar%i:e% meas&re of a
sam.le of 3eha6ior?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
52 !an *o& &se 4s*'hometri' test to .re%i't a3o&t em.lo*eeAs 5o3 .erforman'e, ma9e
'areer %e'isions an% to i%entif* trainin) nee%s, so on an% so forth?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
(2 $o tests assess the %ifferen'es 3et8een in%i6i%&als or 3et8een the rea'tions of the
same in%i6i%&als &n%er the %ifferent 'ir'&mstan'es?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
/2 $o *o& a)ree that the res&lts of .s*'hometri' tests are 3etter than the tra%itional
testin) metho%s e2) inter6ie8?
29
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
;2 $o *o& feel that the res&lts of .s*'hometri' testin) are fairer than other tests?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
02 $o *o& thin9 that the &se of .s*'hometri' tests for sele'tion .&r.oses ha6e 3een
in'rease% in re'ent *ears?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-02 $o .s*'hometri' tests in the normal re'r&itment .ro'e%&re in'reases the s&''ess
rate of the re'r&itment?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
--2 $oes *o&r 3an9 &se .s*'hometri' tests to sele't 3oth mana)erial an% staff le6el
em.lo*ees?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-+2 Is the %e6elo.ment of .ersonnel is another ma5or a..li'ation of .s*'hometri'
testin)?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-,2 $oes *o&r 3an9 &se .s*'hometri' tests for .erforman'e mana)ement?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-42 $o .s*'hometri' tests .ro6i%in) &.BtoB%ate information on s9ills s&'h as C&antitati6e
reasonin) of em.lo*ees 8hi'h 'om.lement C&alifi'ationB3ase% e6i%en'e?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-52 $o *o& feel that .s*'hometri' tests in'rease the .ro%&'ti6it* of em.lo*ees?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-(2 Is there a si)nifi'ant %ifferen'e in .s*'hometri' test &sa)e 3et8een lar)e an% small
or)ani:ations?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
30
-/2 $oes it ena3le 3an9 to i%entif* trainin) nee%s for or)ani:ation?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-;2 $oes trainin) eD.erien'e .ro6i%e hi)h retention rates?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
-02 Is it a fa't that or)ani:ations 8ith lar)er trainin) eD.en%it&res &se .s*'hometri'
testin) more than those 8ith smaller eD.en%it&re?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
+02 $oes the ele'troni' .s*'hometri' testin) ma9e this .ro'ess more effi'ient an% &ser
frien%l*?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
+-2 $o *o& thin9 that .s*'hometri' testin) im.ro6es em.lo*eeAs or)ani:ational
'ommitment?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
++2 $o *o& see that the )ro8th of .s*'hometri' tests 8ill 3e in'rease% in f&t&re *ears?
.) 4trongly >isagree 0) >isagree 1 )-either /gree nor disagree L) /gree F) 4trongly agree
31
32
. Main Fin%in)s
<se of psychometric tests has been grown o!er time in Paistan, :arger as well
as small organi"ations are using these tests for !arious purposes. Their use is
also increasing in baning sector. There are wide range of tests in the maret
and new are being introduced all the time. 4ome tests measure broad sills while
others are more narrowly focused on particular occupations, whether managerial,
technical or manual.
They are more useful and show better and fair results than traditional methods.
&n this research, EAG respondents are agreed to this !iew point.
Psychometric tests focus on )+ practices, it forces )+ to thin more clearly
about roles, what attributes those role re%uires, and what those attributes
specifically mean. 7!en in this research @AG managers are agree and LAG are
strongly agree to this !iew point.
&t is a useful tool for hiring the staff, because the selection of wrong staff is a
costly for any organi"ation. &n this research, ELG managers ad!ocate the use of
these tests in recruitment and selection.
2nline psychometric tests speed up the recruitment process. &n this research
ma#ority is con!inced about the efficiency of online system.
6ompanies spend lot of money on the training and de!elopment of the
employees. They try to de!elop personnel by using these tests. )owe!er, in this
research it is found that only FAG respondents are agree to this situation. 2ther
is uncertain about it.
Psychometric tests widely increase the commitment of employees with the
organi"ation. &n this research, ma#ority @AG is in the !iew that psychometric tests
increase the organi"ational commitment of employees.
9or impro!ed performance, it is necessary that there should be right person for
right #ob for good performance. 9or this purpose, psychometric tests are used.
They play a !ery important role in performance management. LAG managers are
agreed to it.
Psychometric tests allow indi!iduals to find out their own strengths and
weanesses and about those of the people around them. &t promotes more
effecti!e woring relationships and impro!es team performance
33
Psychometric tests impro!e the producti!ity of the employees by increasing the
efficiency and effecti!eness of the worers in the organi"ation. HAG respondents
are agreed to this statement.
34
35
ra.hi'al Re.resentation
4s*'hometri' Tests a%% 6al&e to the 7R .ra'ti'es
Psychometric Tests
strongly 'isagree
'isagree
(either &gree nor 'isagree
&gree
)trongly &gree
&t is hypothesi"ed that the use of Psychometric Tests adds !alue to the )+ practices,
the results support this statement. There is a significant relationship between the use of
psychometric tests and the !alue added to )+ practices. LAG managers are strongly
agreed to this statement and @AG are agree, no one is disagree to this statement. &t
shows that all managers of different branches ha!e positi!e !iews about this
relationship that psychometric tests are necessary to add !alue to the )+.
36
!onsistent E Effe'ti6e Meas&re of 4ersonnelAs Traits,
A3ilities, S9ills an% Interests, 3eha6iors1

EFG people are agreed to this statement and .AG are strongly agreed, they
belie!e that psychometric tests pro!ide a consistent and effecti!e measure of
personnel=s traits, abilities, sills and interests. .AG are opposed to this
statement, they are disagreeing. )owe!er, FG are neither agreed nor disagreed
to this !iew point.
37
4s*'hometri' tests are 3etter E fair in res&lts than tra%itional
testin) metho%s1
Psychometric Tests
)trongly 'isagree
'isagree
(either &gree nor 'isagree
&gree
)trongly &gree
/lmost EAG management belie!es that psychometric tests are better than
traditional testing methods lie inter!iews, etc. /nd their results are fairer than
other test, that=s why their use in recent years has been increased. 2nly 1A G
are neither agreed nor disagreed to this statement, they are uncertain about this
statement.
38
4s*'hometri' Test Ser6es As a Usef&l Tool For
Re'r&itment E Sele'tion 4ro'ess1
@EG managers are agreed to the statement that psychometric test is a useful tool for
recruiting and selecting the candidates, and it lea!es positi!e influence on these
processes and EG are strongly agreed to it. .1G are disagreed to this statement. /nd
.1G are neither agreed nor disagreed to this statement.
39
4s*'hometri' tests .re%i't a3o&t em.lo*eeAs
.erforman'e, ma9e 'areer %e'isions, so on an% so forth1
Psychometric Tests
strongly 'isagree
'isagree
(either &gree nor 'isagree
&gree
)trongly &gree
,anagers ha!e difference in opinion about the statement that employee=s
performance, career decision, etc are predicted by psychometric tests. LAG are
agreeing to this !iew point, LAG are disagree and 0AG are strongly agree to this
statement. The managers who are disagree to this statement belie!es that it
does not properly wors in Paistan so, it does not properly predict about the
performance issue, career decision etc. People do not get #ob according to their
D4/s in Paistan, mostly people in )3: are not woring according to their
degrees, speciali"ations and sills. &t is the normal trend which e$ists in Paistan.
4o, these tests will not show proper outcome in Paistan. &t will not help out the
employees to tae right decision about their career. )owe!er ma#ority is agreed
and strongly agreed to this statement. They belie!e that these tests are positi!ely
influence these issues.
40
4s*'hometri' Tests Are Relia3le For The $e6elo.ment
Of 4ersonnel1
Psychometric Tests
)trongly 'isagree
'isagree
(either &gree nor 'isagree
&gree
)trongly &gree
They are only two !iews about this statement. FAG are agreed to this statement
that psychometric tests are useful for the de!elopment of the personnel in an
organi"ation. )owe!er, FAG are uncertain about this !iewpoint they are neither
agreed no disagreed to this statement.
41
4s*'hometri' Tests In'rease the Em.lo*eeAs !ommitment To
The Fo31
)trongly 'isagree
'isagree
(either &gree nor 'isagree
&gree
)trongly &gree
Psychometric tests increase the employee=s commitment to the #ob, when they
got right #obs on merit; they got the chances of training and de!elopment in their
organi"ations, then ultimately their commitment to #ob increases. They become
more loyal to their organi"ation. That=s why ma#ority, LAG is agreed and 0AG
strongly agreed to this statement. )owe!er, LAG are not sure about this !iew
point.
42
4s*'hometri' Tests Are Usef&l For 4erforman'e
Mana)ement1
Psychometric Tests
)trongly 'isagree
'isagree
(either &gree nor 'isagree
&gree
)trongly &gree
The role of psychometric tests in performance management is useful, LAG are
agreed to this statement, they belie!e it is true and LAG are disagreed to this
statement. 0AG are agreed nor disagreed to this statement.
43
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Skills, Abilities,Interest,Traits
and behavior
* + +, ,.-- .../0
Selection And ecruitment * + +- 0.1, *.+20
Trainin! And Development 3 , , ,.-- .---
"er#ormance M!t 0 + 3 +..1 .,11
$r!ani%ational &ommitment 0 + 3 +..1 .,11
'alid N (list)ise* 3
Psychometric tests influence the different factors. 3y getting the standard de!iations of
different factors, we can obser!e which !ariable is the most important one.
The one which is ha!ing the largest difference from the standard de!iation that will be
the largest one and important !ariable here, which is hea!ily influenced by the
psychometric tests. /nd from the data we can see that they are sills, abilities, interests
and beha!ior because it has highest standard de!iation which is @.@H1.
44
Anal*sis an% Res&lts1
After 'olle'tin) the 8hole information, %ata is anal*:e% as follo8s1
This research pro!ides strong confirmation that the use of psychometric tests is
increasing o!er time. &n Paistan, it is large organi"ations which are either using
or ha!e chosen to use tests. Psychometric tests are not unnown for small
organi"ations, but they tend to be deterred by the costs of tests and low no of
!acancies, which they ha!e. Psychometric tests enforce )+ to thin more clearly
about roles, what attributes those roles re%uire and what those attributes
specifically mean.
The Case of H!(:
The use of psychometric tests is in its initial years to support and to add !alues to
)+. )3: uses these tests for the hiring of the staff. The main purpose was to hire
right staff at right #obs. )3: is aware of the importance of these tests, it belie!es
that these tests impro!e the performance of the employees, moti!ate them to use
their full potential at their #obs. This thing enables the employees to use their
D4/s and increase the producti!ity at worplace. 8hich will ultimately impro!e
the performance of the )3:. There are many branches of )3: woring in
9aisalabad city; there are almost similar !iews about such tests. They managers
and employees ha!e positi!e remars about such tests.
-o doubt, it has some weanesses and re%uires more proper planning and
efforts to o!ercome them e.g. proper designing, implementation and serious
attitude of entire team towards these tests.
45
46
47
4a9istan@s #an9in) Se'tor In%&str* Anal*sis
3ans play !ery important role in the economy of a country and Paistan is no
e$emption. 3aning is one of the most sensiti!e businesses all o!er the world. 3ans
play !ery important role in the economy of a country and Paistan is no e$emption.
3ans are custodian to the assets of the general masses. The baning sector plays a
significant role in a contemporary world of money and economy. &t influences and
facilitates many different but integrated economic acti!ities lie resources mobili"ation,
po!erty elimination, production and distribution of public finance.
Paistan has a well-de!eloped baning system, which consists of a wide !ariety of
institutions ranging from a central ban to commercial bans and to speciali"ed
agencies to cater for special re%uirements of specific sectors. The country started
without any worthwhile baning networ in .KLE but witnessed phenomenal growth in
the first two decades. 3y .KEA, it had ac%uired a flourishing baning sector.
3ans in Paistan account for KFG of the financial sector. Paistan has a well-
de!eloped baning system, which consists of a wide !ariety of institutions ranging from
a central ban to commercial bans and to speciali"ed agencies to cater for special
re%uirements of specific sectors. The country started without any worthwhile baning
networ in .KLE but witnessed phenomenal growth in the first two decades. 3y .KEA, it
had ac%uired a flourishing baning sector.
The era of KAs was the clima$ of pri!ati"ation, deregulation and restructuring in the
domestic baning industry and financial institutions. The 5o!ernment only owns the
-ational 3an but HAG of ban assets are in pri!ate sector. 3aning assets rose three-
folds o!er the last fi!e years and the industry si"e is reaching +s L trillion. The
contribution of baning sector to 5>P ratio is FF.@G. Paistan has been raned 0nd in
performance and efficiency indicators among the 4outh /sian countries by the 8orld
3an. There are @H scheduled bans of which the top fi!e ha!e FAG of the maret
share. 3aning industry, in Paistan, is currently under a wa!e of ,ergers and
48
/c%uisitions (, O /s). There are on a!erage 1 , O /s per year.
1) P'%lic "ector Commercial !an*s: -ational 3an of Paistan, 9irst 8omen 3an
:imited, The 3an of Dhyber, The 3an of Pun#ab
+) (ocal Private !an*s: /sari 6ommercial 3an :imited, 3an /l-9alah :imited, 3an
/l )abib :imited, 3olan 3an :imited, 9aysal 3an :imited, P&6&6 6ommercial 3an
:imited, <3:, ,63, /3:,
,) &oreign !an*s: /3- /mro 3an, /l 3araa &slamic 3an, /merican 7$press, 6&T&
3an, >eutsche 3an, 7mirates 3an, &9&6, )ong Dong 4hangai 3aning 6orporation,
4tandard 6hartered 3an, etc.
-) "pecialied !an*s: Pari Tar%iati 3an :td., &ndustrial >e!elopment 3an of
Paistan, Pun#ab Pro!incial 6ooperati!e 3an :imited

49
50
"earnin)1
/fter woring on the topic of Psychometric Tests, it is reali"ed that the use of
these tests are !ery rare in our organi"ation. ,ost of the bans are not using
such tests, only few are adopted such tests. ,ost of the employees e!en
managers ha!e less information about such tests. Their awareness le!el is low,
they do not ha!e serious attitude regarding such tests, &t will tae more time for
the proper implementation and desired outcomes. 2rgani"ations must pay proper
attention in the designing and implementation of such tests. 4o that they can be
used for hiring, training O de!elopment and for performance management
systems purposes and can produce desired results. 7ach organi"ation must
ha!e some amount of budget for such tests, no doubt at first organi"ations tae it
as e$pense, but in reality these tests pro!ide long term benefits to the
organi"ations. 3ecause such tests pro!ide right person at right #ob, moti!ate
them, etc. 3y doing so the organi"ations become effecti!e as well as efficient and
ultimately, their producti!ity increases.
51
52
Re'ommen%ations1
2rgani"ation must eep sufficient budget for recruiting and hiring purposes so
that psychometric tests can be conducted, in this way organi"ations can choose a
more appropriate candidate, which will be ultimately beneficial for the organi"ation
Psychometric Tests are a powerful and !ersatile assessment tool; so Paistani
organi"ations must increase its use for enhancing the %uality of assessment and
de!elopment of employees.
There should be speciali"ed psychologists in e!ery big organi"ation who should
be made responsible for implementation of psychometric test and to align them with
the organi"ational o!erall goals.
The organi"ations should promptly utili"e those tests and tools who ha!e high
grade of reliability and !alidity.
2rgani"ations should ensure the fairness of such tests and their results.
53
54
!on'l&sion1
/fter conducting this research and analy"ing the !iew points of different
managers it is concluded that wworldwide the use of Psychometric tests are
increasing. The use of psychometric tests by human resource professionals
are as an aid to employee selection, de!elopment and performane appraisal
is probably at an all time high.The increase in the use of aptitude and
personality tests in the worplace is a positi!e thing pro!ided the tests are
chosen and used properly.-o douut this test has some disad!antages (e.g.
frustration can be created between the e$isting worers).The use of these
tests are no dout less in Paistan. 3ut now the trend is establishing and most
of the sectors are using it for multidimensional purposes. The main reason for
studying the psychometric tests use is that it may be able to pro!ide realistic
indications of the demand for sills among test users because employers
ha!e to pay si"eable amount of money in order to use the tests. &n Paistan,
the main problems at the moment are the lac of awreness in the field and the
absence of trained professionals on psychometric testing practices. ,ost of
the tests are poorely designed and implemented, that way they fail to achie!e
the re%uire results. 2n aggra!ationnote there is almost no e!idence of the
specific sills which employers are aiming to assess when they mae use of
psychometric tests and hence we can not as yet mae inferences from test
use as to which sills are in demand in industry.

55
56
57