Study: Smaller Teams Perform Better Than Bigger Teams

Situational judgment tests or SJTs are popular aptitude tests that employers utilize to test the problem-solving abilities of an employee. Situational judgment tests are a standard part of the recruitment process nowadays. The tests allow a prospective employer to judge the suitability of a candidate in terms of skillsets and decision making ability for a particular job.

The tests take the form of a variety of scenarios based on the day-to-day challenges and working realities of the said jobs. The candidate is marked on the responses to the various alternatives presented as the answer. The responses are analyzed, and areas of weaknesses, risks, and improvements are identified. Situational judgment tests assess your reactions to gauge how suitable you are for a certain position.

 Kaplan Professionals, an HR firm that assesses, designs and implements innovative learning solutions, conducted a three-year extended Situational Judgement Assessments of 4,500 employees at global tech firms and identified five key workplace findings.

Teams that have interdepartmental interactions do better. Groups working in isolation and insular units perform significantly worse on measures of commercial decision making.

“In simple terms, we presented employees with situations that ask them to make judgments—often using ambiguous and incomplete information, to best simulate the real-life conditions of decision making,” said Dr. Ian Stewart, Executive Director Learning and Design at to Kaplan Leadership & Professional Development. “Across the thousands of data points, common themes and patterns emerged, revealing insights — some relatively obvious, some less so, and some counterintuitive.”

The five key workplace findings were:

1. Smaller work teams perform better than larger teams. There is better collaboration and sharing best practices in smaller groups.
2. Individuals and teams with ‘skin in the game’ (some kind of monetary investment) do better. Incentives, rewards or any other offers, though effective, need to be aligned and balanced for better organizational outcomes.
3. Teams that have interdepartmental interactions do better. Groups working in isolation and insular units perform significantly worse on measures of commercial decision making.
4. The study found that people on the front line where their decisions see immediate commercial outcomes, did better. Obviously, psychologically they feel more engaged. The distance between the individual and the commercial reality is a crucial predictor of effective or ineffective practice.
5. Cross-functional teams do better than specialist groups—counterintuitively, this holds even when the specialist group are finance professionals.

“The data provides insight and evidence to challenge some of the traditional organizational and structural thinking,” said Dr Stewart. “Is it really more effective to have a dedicated team of individuals with the same specialty, or should we introduce greater diversity into the decision-making group? The data certainly appears to support this. We might also think more about the physical environment that teams work in—we know that isolated teams do far worse than connected teams. So, can we connect such a team to the wider business, and could we create professional networks that connect teams?”

SJTs tests measure hidden capabilities and training impacts. Based on the responses, companies can even come up with customized training programs for employees to improve performance.

Research has found that SJTs that test “what a candidate should do?” in a typical scenario as opposed to “what he would do?” are better predictors of performance.

Additionally, a landmark study from Belgium’s Ghent University put forth the view that SJTs are the better answer to assess the suitability of the less advantaged. Generally, aptitude tests do not take into account the exposure and disadvantages of people from minority backgrounds.

This is an important finding because in today’s global world, meeting diversity targets its crucial. A survey from the High Fliers Research Centre revealed diversity targets are difficult to meet and a challenge for more than 69% of organizations – for more than any other factor included in the survey.

SJTs also reduce attrition rates. Scenario-based questions that present practical real-world challenges of their jobs give a better understanding of their work to employees. The demands and complexities of employment do not come as a surprise to the ones who are better prepared by the aptitude test.

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