Judgement is at the Heart of nearly every Business Scandal: How can we Assess it?
Posted by John Kleeman
How does an organization protect itself from serious mistakes and resultant corporate fines?
An excellent Ernst & Young report on risk reduction explains that an organization needs rules and that they are immensely important in defining the parameters in which teams and individuals operate. But the report suggests that rules alone are not enough, it’s how they are adopted by people when making decisions that matter. Culture is a key part of such decision making. And that ultimately when things go wrong “judgement is at the heart of nearly every business scandal that ever occurred”.
Clearly judgement is important for almost every job role and not just to prevent scandals but to improve results. But how do you measure it? Is it possible to test individuals to identify how they would react in dilemmas and what judgement that would apply? And is it possible to survey an organization to discover what people think their peers would do in difficult situations? One answer to these questions is that you can use Situational Judgement Assessments (SJAs) to measure judgement, both for individuals and across an organization.
- Identify job roles and competencies or aspects of that role in your organization or workforce where judgement is important.
- Identify dilemmas which are relevant to your organization and each of which requires a choice to be made and where that choice is linked to the relevant job role.
- Build questions based on the dilemmas which asks someone to select from the choices – SJA (Situational Judgement Assessment) questions.
There are two ways of presenting such questions, either to survey someone or to assess individuals on their judgement.
- You can present the dilemma and survey your workforce on how they think others would do in such a situation. For example “Rate how you think people in the organization are likely to behave in a situation like this. Use the following scale to rate each of the options below: 1 = Very Unlikely 2 = Unlikely 3 = Neutral 4 = Likely 5 = Very Likely”.
- You can present the dilemma and test individuals on what they personally would do in such a situation, for example as shown in the screenshot below.
You can see this question “live” with other examples of SJA questions in one of our example assessments on the Questionmark website at www.questionmark.com/go/example-sja.
Once you deliver such questions, you can easily report on the results segmented by attributes of participants (such as business function, location and seniority as well as demographics such as age, gender and tenure). Such reports can help indicate whether compliance will be acted out in the workplace, evaluate where compliance professionals need to focus their efforts and measure whether compliance programs are gaining traction.
SJAs can be extremely useful as a tool in a compliance programme to reduce regulatory risk. If you’re interesting in learning more about SJAs, read Questionmark’s white paper “Assessing for Situational Judgment”, available free (with registration) at https://www.questionmark.com/sja-whitepaper.