More Testing, Less Logic?

GMAT, the dominant test in MBA admissions, is being used in hiring decisions. This violates standards set by the business school group that sponsors the test, but it takes no action.
October 22, 2009

The Graduate Management Admission Test has for years been the dominant standardized test when it comes to getting into M.B.A. programs.

This week, Business Week reported on an interesting trend: Some employers are starting to ask M.B.A. grads for their GMAT scores, using them as one measure of a job candidate's potential. In this tight market, business schools are worried about their graduates' job prospects, so a number of them are now advising -- informally or formally -- some of their students to retake the GMAT in hopes of a higher score. The article, as one would expect for a business publication, focuses on why some businesses are using the GMAT in this way and other employers are not.

What the article doesn't address is an educational issue: The employers who are using the GMAT in this way are doing so in direct violation of the guidelines issued by the test's sponsors. And those sponsors include business schools that are apparently going along with the use of the test scores in this way.

The Graduate Management Admission Council, the association of business schools that runs the GMAT, has never claimed that it is a valid tool for employers. The council says that its research shows the test to have predictive value of first-year grades in an M.B.A. program. The council maintains a list of "inappropriate uses" of the GMAT, including as a requirement for employment.

Based on the Business Week article (and additional reporting by Inside Higher Ed), it appears that there is plenty of inappropriate use going around -- and that the council (which benefits financially when people take the GMAT) isn't objecting.

Business Week quoted officials at the business schools of the University of Texas at Austin and of Virginia as advising some enrolled students with less than stellar GMAT scores to retake the test. And the magazine reported that the University of Notre Dame's business school sent a letter to its entire 2011 graduating M.B.A. class, describing the increased importance of the GMAT, and offering a four-day course for students who wanted to prepare to retake the test.

A spokeswoman for Notre Dame told Inside Higher Ed that the institution didn't believe there was anything wrong with offering the course, and that it consulted with the Graduate Management Admission Council "both in a phone conversation and by e-mail" and never got any indication that there was anything wrong with encouraging students to take the GMAT for use by employers.

Other business schools may be headed in a similar direction.

Scott Shrum, director of admission consulting research at Veritas Prep, said that the high end GMAT test-prep company has received inquiries from three business schools (two of which were not mentioned in the Business Week article) about group rates for test prep for students. He said he couldn't be sure, but thinks that this may relate to the trend of employers looking at scores. Shrum speculated that the issue may be more important for graduates who aren't coming out of the very top programs.

At the very top ranked business schools, he said, "companies assume that everyone there is strong, and don't care about their scores as much. McKinsey or Goldman Sachs is going to hire 20-30 grads from there every year." But he added that at other business schools, "where Goldman may only hand out a few job offers, they'll look more carefully at everything in a student's profile (including the GMAT) to determine who the lucky few will be. That's not a knock on those lower-ranked schools; I think it's just the reality of the situation."

Judy Phair, vice president for communications of GMAC, said that the council has said "numerous times that the GMAT is designed for, and validated for (via numerous validity studies) use as an effective assessment tool in the admissions process. We don't encourage use for other purposes for that reason." Asked whether the council should do anything about business schools helping companies use the test in other ways, she said that "we really can't prevent them from doing that."

Phair said that she did not know who at GMAC had communicated with Notre Dame, but she said that "we would have said that we can't prevent you from doing it, but we have no proof that it does any good." Phair stressed that students own their GMAT scores and have the right to send them where they want. "We couldn't say to Notre Dame, 'No, you can't do that.' "

A frequent criticism of testing entities is that they look the other way at testing misuse, with critics noting that most misuse also contributes to the volume of tests taken. For instance, the College Board regularly says that it opposes the use of any of its tests as the sole criterion for any significant educational decision. But the College Board's PSAT has long been the test used as the sole criterion for semifinalist status for National Merit Scholarships.

There have been a few instances when testing companies have taken tough stands against use of their exams that they view as inappropriate. In 1983, the Educational Testing Service threatened to stop sending its National Teacher Examination to states that forced teachers to achieve certain score levels to continue their jobs. The ETS said that the test wasn't designed for that purpose and made this statement in a public fight with the then-governor of Arkansas, Bill Clinton, and the leader of his education reform efforts, Hillary Clinton.

Robert Schaeffer, public education director of the National Center for Fair and Open Testing, cited the ETS standoff with the Clintons as evidence that "if a test maker has clear evidence that someone is misusing its product, the company can simply refuse to provide test scores until assured that the guidelines will be followed."

Schaeffer questioned how GMAC can say that it believes in standards for its test, but refuses to do anything about violations of those standards.

"Unfortunately, most modern-day test makers now have embraced the rationale of manufacturers of Saturday Night Special handguns -- 'we have no way to control how our products are used -- please pity us,' " he said. "If GMAC wanted to enforce its test-use guidelines, they could easily do so, either by moral suasion or more aggressive means. But there's no money to be made in encouraging fewer people to take the test. This is a perfect example of how much testing has become a business, even when in an allegedly nonprofit form -- the bottom line is all that matters."


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