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The challenge of measuring integrity in leadership

Iain Milne

Iain Milne

Executive Summary

Leadership integrity has arguably never been more important. Recent scandals highlight the profound influence integrity can have on an organisation, its culture and reputation, and ultimately all of us.

Recent events, such as the PwC tax leak scandal, demonstrate the catastrophic organisational consequences when integrity is compromised at the senior leadership level. Organisations and stakeholders are increasingly recognising the importance of fostering integrity in leadership. Yet, as organisational psychologists, we know that measuring integrity presents considerable challenges, given its intangible nature and the subjective interpretations it often invites. Defining what constitutes ‘integrity’ varies significantly among individuals and cultures, adding a layer of complexity to its measurement.

The demand for leaders who exemplify steadfast ethical principles and uphold transparency is intensifying. This increasing demand raises two pivotal questions:

  • Is there an objective, reliable, and culturally sensitive method to measure integrity?
  • And if yes, should organisations use them to assess integrity when recruiting leaders?

This paper delves into these questions, and explains why integrity tests are not recommended. Drawing on our expertise in leadership assessment and experience in addressing these concerns we explain more effective ways to maximise integrity outcomes.

What is integrity?

Within any organisation, the desire for leaders to demonstrate integrity is a universal sentiment. However, measuring integrity is a formidable task due to its multi-faceted nature and the absence of a universally agreed definition, particularly within the context of leadership. Its assessment becomes complex without a widely agreed understanding of what constitutes integrity.

‘Integrity’ and ‘Honesty’ are often used synonymously, complicating the definition and assessment of integrity. This confusion is particularly evident in tests designed to gauge undesirable behaviours. Furthermore, the rise of ethical leadership, which prioritises not just integrity but a broader commitment to upholding ethical standards, has amplified interest in assessing integrity.

While ethical leadership tends to merge the pursuit of integrity with the adherence to moral principles, it’s essential to differentiate between ‘ethics’ and ‘integrity’. While these concepts intersect, they are not identical.

Understanding and measuring integrity must go beyond the mere assessment of honesty. For organisations, cultivating and assessing integrity in leadership involves a broader examination of consistency in actions, values, and adherence to ethical standards.

Why are integrity tests used?

In the United States, the economic impact of employee dishonesty is estimated at approximately $40 billion each year,1 while in Australia, similar misconduct accounts for an estimated $1.5 billion in annual losses.2 A particularly alarming statistic is that employee theft and embezzlement contribute to one-fifth of all business failures in the US. These stark figures underscore the significant repercussions of dishonesty and, more broadly, a lack of integrity on business outcomes. This has led many organisations to intensify their scrutiny of employee honesty and integrity.3

To mitigate these concerns, many organisations have introduced ‘honesty’ or ‘integrity’ tests into their recruitment processes. These tests are more often used to recognise and target risky behaviours that might be less applicable in white-collar or knowledge worker roles—jobs that many of our clients perform. These tests tend to focus on predicting behaviours such as theft or misuse of resources, which, while important, may not capture the full spectrum of integrity-related issues relevant to these roles. For instance, in a white-collar context, integrity might be better assessed through behaviours such as honesty in reporting work hours, responsible use of confidential information, and adherence to ethical guidelines in decision-making.

However, it’s important to note that these issues are not merely about dishonesty but also about the broader concept of integrity, which encompasses truthfulness and consistency in actions, values, methods, and outcomes. By implementing these tests, organisations aim to weed out potential problem candidates, paving the way for a more dependable workforce that upholds the principles of integrity.

The measurement of integrity

Integrity assessments originated in the 1980s and were seen as a more scientific alternative to polygraph (lie detector) testing, which was a reasonably common recruitment process in the US in the 1980s (and before). During this period, changes in legislation led to the gradual phasing out of polygraph tests as screening tools, both in the USA and globally.4,5

Two primary methodologies subsequently emerged in the field of integrity testing: overt and covert testing.

Overt tests utilise direct questioning to probe an individual’s honesty, criminal history, and attitudes towards various issues, such as theft, drug abuse, and integrity. These tests aim to obtain explicit information about a candidate’s character and identify potential risk factors.

In contrast, covert tests take an indirect approach, focusing on assessing personality traits. These tests evaluate various traits, including thrill-seeking tendencies, social conformity, conscientiousness, dependability, and attitudes toward authority. The aim is to predict a broad spectrum of counterproductive work behaviours, providing a more nuanced assessment of an individual’s integrity.6

Despite the comprehensive nature of covert tests, they are not without limitations. Firstly, while attempting to predict a broad spectrum of counterproductive work behaviours, these tests may over-emphasise certain personality traits and underemphasise others, potentially resulting in an incomplete or skewed representation of an individual’s integrity. Secondly, due to their indirect approach, covert tests may misinterpret certain personality traits, leading to false positives or negatives. For instance, a highly independent individual might be incorrectly perceived as having a negative attitude towards authority, or a naturally reserved person may be wrongly classified as a non-conformist. Finally, and somewhat ironically, the behaviours these tests measure, and seek to weed out, are often the exact ones the same organisations frequently claim to seek. Creativity, a willingness to challenge the status quo and drive change and new ideas, as well as agility and flexibility, behaviours which are often desired in leaders, correlate with the behaviours that covert tests measure. So, avoiding candidates who perform poorly on these tests might result in weeding out those with the exact personality and behaviours organisations seek. Thus, while covert tests provide a nuanced view of integrity, they must be administered and interpreted cautiously to ensure accurate and fair assessment outcomes.

A more holistic assessment is required, especially when evaluating potential leadership candidates.

Recently, unconventional approaches to integrity measurement have started to gain popularity, bringing various innovative perspectives to the integrity assessment process. These alternative approaches include:

  • Biodata: An approach that involves analysing an individual’s biographical, information and conducting comprehensive background checks to evaluate their suitability and trustworthiness.7
  • Integrity-related cognitive ability tests: This is based on findings that individuals with higher cognitive ability tend to engage less frequently in counterproductive work behaviours.8
  • Value-oriented tests that gauge an individual’s alignment with organisational values.9
  • Moral reasoning tests assess an individual’s capacity for ethical decision-making.10
  • Situational judgement tests that present real-life scenarios to evaluate ethical responses.11

While these approaches can all provide valuable insights, they tend to underscore the limitations of assessing integrity in isolation. A more holistic assessment is required, especially when evaluating potential leadership candidates.

Another complex challenge faced by integrity tests is determining whether integrity issues stem from ‘bad apples’ (problematic individual traits) or ‘bad barrels’ (dysfunctional organisational influences).12 This ‘apples vs barrels’ dilemma adds an extra layer of complexity to the integrity screening process, demanding a balanced approach that considers both individual dispositions and situational factors.

The validity of integrity tests

The validity of integrity tests continues to be a subject of ongoing debate. One study, which analysed 104 research findings on the efficacy of integrity tests, found that these tests did not robustly predict the targeted behaviours.13 Despite claims by test publishers that the validity and reliability of integrity tests are comparable to those of other employment tests, the significant implications of failing an integrity test necessitate more stringent standards.

Interestingly, and in contrast to earlier findings, more recent research, encompassing analysis of 150 studies on integrity tests has indicated that these tests are significant predictors of workplace deviance.14 Value-oriented and cognitive ability tests emerged as particularly effective predictors among the various types of integrity tests.

As previously discussed, situational factors and surrounding circumstances can significantly influence integrity. This point is underscored by a study conducted during the COVID-19 pandemic, which suggested that perceived job instability among hospitality and tourism personnel led to unethical behaviour.15 The study proposed that increased family financial pressure and perceived organisational injustice may have contributed to this outcome, highlighting the role external factors can play in shaping employees’ integrity and ethical conduct.

The debate surrounding the validity of integrity tests underscores that relying solely on simple or single measures of integrity, without considering broader aspects of personality, potential derailers, the organisational environment, and other relevant contextual factors, would be misguided. Validity in this space remains contested, and the impact of an inaccurate integrity assessment can have far-reaching consequences for individuals and organisations alike. It is, therefore, crucial to adopt a more comprehensive, multi-faceted approach to assessing integrity—one that accounts for various individual and situational factors and is responsive to the dynamic nature of human behaviour and the complexity of the work environment. By doing so, organisations hope to gain a more nuanced and accurate understanding of a leader’s integrity, enabling them to make more informed and fair decisions in the recruitment and development processes.

People Measures’ view

Given the contradictory research findings concerning the validity of integrity testing, coupled with the understanding that integrity is shaped by a mix of personal attributes and situational factors, arriving at a definitive conclusion about the utility of these tests in the workplace proves to be complex.

In light of these uncertainties, it becomes crucial for organisations to weigh the advantages and disadvantages of integrity testing within their unique context. Factors such as the nature of the job, the industry, cultural norms, and even current societal conditions should inform decisions about the implementation of integrity testing.

Fostering ethical behaviour within the workplace necessitates a comprehensive strategy beyond merely employing integrity tests. A holistic approach should encompass robust recruitment procedures, extensive training initiatives, and nurturing an organisational culture that promotes ethical conduct. If used, integrity testing should be considered a single element in a broader framework.

Fostering ethical behaviour within the workplace necessitates a comprehensive strategy beyond merely employing integrity tests.

People Measures’ approach

Integrity testing continues to be a divisive issue, given its debated validity and reliability. At People Measures, we assert that even one false positive—erroneously determining that an individual lacks integrity—is not acceptable. The repercussions of such an error can be significant. Our philosophy towards integrity assessment is grounded in our fundamental assessment principle: ‘do no harm’.

Despite the controversies surrounding integrity tests, we steadfastly believe in the potential to cultivate the skills necessary for leading with integrity and ethics. Rather than solely relying on tests, we advocate shifting the focus towards growing a culture of integrity within organisations. This can be achieved through comprehensive training, ethical leadership development, and promoting an environment that values transparency and integrity.

Improving decision-making skills arms leaders with the capacity for critical thinking, problem identification, and informed decision-making. It provides a structured framework for navigating complex situations while remaining faithful to their core values. It also enables courageous decision-making, as leaders with solid decision-making skills can handle uncertainties and uphold ethical standards. Ultimately, decisions reflect a leader’s values and making sound, ethical decisions consistently show a leader’s commitment to integrity, setting a positive example for others.

Alongside decision-making skills, learning about and discovering one’s values and purpose is vital for effective, ethical leadership. A leader’s purpose acts as a guide during challenging situations or ethical dilemmas, providing clarity and direction. Though leadership can be risky and uncomfortable, a well-defined purpose empowers individuals to embrace leadership opportunities and inspire others while staying true to their principles.

Furthermore, fostering psychological safety within a team or organisation is akin to laying the foundation for a robust ethical environment. When individuals feel secure, understood, and respected, they are more likely to share ideas, voice concerns, and actively engage in the difficult conversations that inevitably occur in an organisation. While assessing integrity remains an aspect of building a trustworthy team, the investment in psychological safety holds a higher strategic value. It elevates the standard expectation of integrity to a collective pursuit of ethical excellence.
Organisations solidify their ethical standing and significantly mitigate risks by promoting a culture where individuals feel safe to express their concerns without fear. When people believe they can speak out, potential issues are identified and addressed earlier, reducing the chance of them escalating into bigger problems. This atmosphere of openness also ensures that leaders are held accountable, as they are more likely to be challenged on decisions and actions. In essence, psychological safety serves as an early warning system for organisations, alerting them to potential pitfalls and challenges, ensuring that proactive measures can be taken promptly.

In conclusion, the endeavour to measure leadership integrity remains a complex challenge due to its multi-faceted nature and the absence of a universally agreed upon definition. While integrity testing has been adopted to identify potential risks, its validity and reliability remain debated. People Measures’ belief in cultivating awareness of purpose and decision-making abilities in leaders takes a proactive step and a holistic approach to talent management, where we strive to create ethical leaders who exemplify integrity, positively influencing their organisations and the broader society.

Given the contentious nature of integrity testing and the potential repercussions of misjudging an individual’s integrity, handling any integrity assessment with utmost care and expertise is crucial. At People Measures, we understand these evaluations’ sensitivity and impact on individuals and organisations. This is why we are sometimes asked to run leadership development programs with a strong focus on ethical leadership and ethical decision-making, which we believe is a better way to lift the level of integrity in leaders rather than trying to assess it without considering the broader context.

Fostering psychological safety within a team or organisation is akin to laying the foundation for a robust ethical environment. When individuals feel secure, understood, and respected, they are more likely to share ideas, voice concerns, and actively engage in the difficult conversations that inevitably occur in an organisation.


Our Offer

For a confidential discussion about integrity assessments, or if you have questions or concerns about this topic, we invite you to contact us. We are committed to providing a balanced and fair approach to integrity assessment, and we look forward to assisting you in navigating this complex area.


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