The Top Psychometric Tests for Leadership Assessment

There are two reasons you might employ psychometrics when assessing leaders. The first comes when you are hiring externally for a vacant leadership role, the second comes much earlier, when you are identifying future leaders among your employees to ensure a healthy and sustainable leadership pipeline.

Both are critical for high-growth companies that are adhering to a time-sensitive value creation plan, such as those that have been acquired by private equity funds. The burden of responsibility to get every leadership hire right lays heavily on the investment directors, chairs and founders. A wrong hire that leads to leadership churn can push back ROI targets by up to 18 months. No pressure, teams.

Working out who will bring you a return on this investment is best done with objective assessment. Personalities, CVs and who the decision makers like need to be put aside to find out who will work in the best interests of the company. This is where psychometric testing comes in, as a way to understand how well an individual is likely to perform in a specific role and in certain situations, and how well they are likely to work with other members of the senior team.

However, there are many types of psychometric tests that have been developed in the market, and many companies use a mix of them. In this article, we will run through the most popular assessment models, when and how best to use them.

Types of psychometric tests

There are several types of psychometric tests that organisations can use for leadership assessment:

• Personality tests: These tests measure an individual's unique traits and characteristic behaviours. They may focus on assessing the presence of specific leadership qualities or determining an individual's compatibility with a company's organisational culture. Examples of psychometric personality tests used for leadership assessment include the Myers-Briggs Type Indicator (MBTI) and the Hogan Personality Inventory (HPI).

• Aptitude tests: These tests assess an individual's cognitive abilities and problem-solving skills. They are often used in conjunction with personality assessments to provide a comprehensive understanding of a person's leadership potential. Examples of aptitude tests used for leadership assessment include numerical, verbal, and abstract reasoning tests.

• Situational judgement tests (SJT): SJTs present a series of hypothetical situations relevant to the role of a leader. Test takers are required to evaluate and select the most appropriate course of action from a range of options. These tests aim to assess an individual's decision-making abilities, as well as their ability to navigate complex situations. Examples include PACE behavioural analytics.

• 360-degree feedback: This method involves collecting feedback from a variety of sources, including peers, direct reports, supervisors, and the individual being assessed. The feedback covers areas such as leadership style, communication skills, and goal-setting abilities. This holistic approach can help to identify strengths and weaknesses, as well as generate insights into how someone is perceived by others in the organisation. Examples include the EQ 360.

Psychometric tests used in the workplace are all about understanding how well an individual will fit and perform in their roles. The following assessment models all have the same aim, but differ in how they get to the answers. Here are the top 5 psychometric tests for leadership:

Myers Briggs (MBTI)

The Myers Briggs Type Indicator (MBTI) is one of the most famous personality tests used in the working world today, since its formulation in the 1940s. It was first used by the US military during WWII to select and allocate personnel and was adopted by the business world soon after. It is based on the theory of psychological types developed by Carl Jung, which suggests that individuals have different ways of perceiving and processing information. By understanding one's MBTI type, leaders can gain insights into their preferred communication styles, decision-making approaches, and potential strengths and weaknesses. 

The Model: The model categorises individuals into 16 distinct personality types based on four dichotomies: Extraversion vs. Introversion, Sensing vs. Intuition, Thinking vs. Feeling, and Judging vs. Perceiving. While some models are a spectrum, MBTI offers an either/or personality type. For example, one result might be INTP, which means the individual is Introverted, Intuitive, Thinking and Perceiving.

The Test: The test consists of a series of questions that ask individuals to choose between two options for each of the four dichotomies. The questions are designed to be simple and straightforward, and there are no right or wrong answers. Test takers are told to choose the option that best reflects their natural preferences, rather than what they think is socially desirable or expected.

Unlike other psychometric tests that measure traits such as intelligence, aptitude, or attitudes, the MBTI is designed to measure personality preferences and how individuals perceive and interact with the world around them.

For Leadership: The MBTI can be used for all levels of employee, but at a leadership level it is best used to help companies identify those with leadership potential. For example, individuals who score high in extroversion, intuition, and thinking may be more likely to excel in leadership roles. But it can also help when building an effective leadership team. For example, a leader who is more focused on big-picture thinking may benefit from having team members who are more detail-oriented.

Free Test? While the official MBTI is not free, many online personality tests are based on MBTI. 

Hogan Personality Inventory (HPI)

The Hogan Personality Inventory is another well-regarded assessment tool for leadership. It was created in the 1980s by Robert and Joyce Hogan and is based on the idea that personality traits are important predictors of job performance and success, more so than IQ tests. While MBTI was developed for psychological study of all parts of the population, HPI is specifically designed for the workplace. 

The Model: HPI is designed as a “bright side” of personality testing, based on the theory that getting along with others and getting ahead in the social hierarchy are the dominant themes in social life. The methodology measures seven primary scales, including adjustment, ambition, sociability, interpersonal sensitivity, prudence, inquisitiveness and learning approach. It uses a random sample from large normative data sets for its baseline, taken from organisations such as the Department of Labor in the US. 

The Test: The test involves 200+ true or false questions. For example “I like everyone I meet – True or false?” judges how sociable and sensitive the individual is. The results are laid out as a high-low score for each of the seven scales.

For Leadership: Though HPI is designed for employees at all levels, it can be used to help to develop future and current leaders. Just as with MBTI, the model identifies personality traits that are associated with effective leadership. Individuals can use the test to understand where they need to improve, and hiring managers can use it to understand who has leadership potential.

Free Test? There is no free version of the test. 

Emotional Quotient Inventory (EQ-i)

As the name suggests, the Emotional Quotient Inventory (EQ-i) focuses specifically on assessing emotional intelligence, which is considered an essential quality in effective leadership. It is not intended as a holistic view on leadership ability, merely the leadership competencies that correlate with emotional intelligence. Developed by Reuven Bar-On in the 80s and 90s, he is thought to be the first to use the term emotional quotient as a measure of someone’s emotional intelligence. As we have discussed in our articles on emotional intelligence, a leader who displays an optimal degree of emotional intelligence (empathy, self-awareness, self-regulation, social awareness and relationship management) is going to be more effective in their role.

The Model: The latest test, EQ-i 2.0, measures five core components of emotional intelligence: self-awareness, self-regulation, motivation, empathy and social skills. By examining these areas, organisations can identify potential leaders who possess the emotional intelligence needed to drive success and foster strong team dynamics.

The Test: The test comes in the form of 133 statements with candidates rating themselves from 1 to 5 in how true the statement relates to them. An optional EQ 360 includes gathering feedback from selected colleagues. The assessment results come in two forms – the Workplace Report and the Leadership Report, which focuses on leadership effectiveness in terms of Self-Perception, Self-Expression, Interpersonal, Decision Making and Stress Management. 

For Leadership: While many tests offer a personality profile without the context of leadership, the EQ-i test offers a specific Leadership Report which can help senior executives understand how they can apply their EQ level to their roles.

Free Test? There is no free version available.

The Big Five (FFM)

The Big Five, or Five Factor Model, so called because of the five dimensions that have formed variations of the test for decades. The model was really an amalgamation of several different researchers working independently to find the components of personality. What makes this personality model different from the others is that it has consensus in the academic world. In 2021 the Big Five was cited 735 times in peer-reviewed personality studies, whereas MBTI and HPI were each referenced four times.

The Model: The big five dimensions of personality are Openness to Experience, Conscientiousness, Extraversion, Agreeableness, and Neuroticism (sometimes called OCEAN or CANOE), which contain a further 10 aspect level dimensions and 30 facet level dimensions, meaning there are 45 overlapping personality traits within the model

The Test: While the Big Five is the name of the model, there are several versions of the test, due to the fact that the model was not the work of one person or institution. For example, there are standardised tests like the IPIP-300 test which asks 300 questions, and the Revised NEO Personality Inventory (NEO-PI-R) which has 240. But there are even more that have been developed by companies across the internet.

For Leadership Assessment: This model is not designed specifically for the business world nor leadership, more for population’s personality identification. But its comprehensive nature means that hiring managers and business owners have plenty of information to interpret for leadership assessment. For example, individuals scoring high in Extraversion and Conscientiousness are likely to be assertive, confident and have a natural inclination to take charge.

Free Test? There is a free version of the IPIP-300 available here.

PACE Behavioural Analytics

PACE by Leadership Dynamics is a comprehensive leadership assessment tool that evaluates four key domains: Pragmatism, Agility, Curiosity and Execution. Each overarching domain includes several sub-behaviours that assess the specific attributes that contribute to effective leadership. Formulated with UCL psychologists and based upon data from private-equity backed leadership teams that have successfully exited over the past 10 years. 

The key difference in PACE is the focus on behaviours over personality traits. Since behaviours are dynamic – i.e. they change depending on the situation – while personality is static, the hypothesis is that understanding an individual’s behaviours will help predict how a person will react to stimuli. In other words, they can tell us how a leader will cope in a specific role, with specific types of people, in a specific kind of company, going through a specific phase of development.

Another major difference is the audience. PACE is specialised for private equity, which is why the data it is based on only comes from the upper quartile of successful private equity exits. Since leadership has different pressures in a portfolio company, their success needs to be assessed in a different way.

The Model: While most personality tests simply assess individuals without judgement, PACE is focused entirely on identifying good leaders. This model is based on the behaviours of successful portfolio company leaders, and so the test does imply the behaviours that are necessary for an effective leader. 

The Test: The test is a deep dive into an individual’s behaviours so it requires some time set aside to focus. It includes 20 scenario based questions and 80 short answer questions, typically taking between 20 and 45 minutes.

Free Test? There is a free PACE test available here. While the free version offers detailed reports, the paid version includes a personalised consultation with an entire leadership team, looking at their behavioural complementarity.

The upgraded PACE version on Leadership Dynamics platform displaying a sample leadership team’s poor behavioural complementarity