Mr. GALLAGHER. All right. Could you return at 2 o'clock? Mr. GALLAGHER. Thank you very much. (The prepared statement follows:) STATEMENT OF CHARLES F. LUCE, ADMINISTRATOR, BONNEVILLE POWER My name is Charles F. Luce, and I am Administrator of the Bonneville Power Administration. Like the members of your committee, I am a lawyer. appreciate the opportunity to appear before this committee to discuss our experience with what is popularly called psychological testing. In part, such testing seeks a professional appraisal of the personality or temperament of the person tested. By far the largest part of psychological tests, however, seeks to appraise achievements, interest, and aptitudes; for example, verbal comprehension, numerical reasoning, clerical speed and accuracy, space visualization, symbolic reasoning, fields of interest, etc. I know this committee's concern that any testing program not constitute an unwarranted invasion of employees' right of privacy. I assure the committee that we share its concern. Before concluding my statement I will describe the safeguards we have established to prevent any unwarranted intrusion into the privacy of our employees. The Bonneville Power Administration is a Federal agency whose official headquarters, by law, are required to be in the Pacific Northwest where all of its properties and operations are located. It was established within the Department of the Interior by the Bonneville Project Act (50 Stat. 731) in 1937, to market power at wholesale from Bonneville Dam. Subsequent orders by Secretaries of the Interior extended BPA's marketing responsibility to include power from all Federal dams in the Columbia River Basin-21 existing and 6 under construction. BPA today is one of the largest electric utility operations in the United States, with 6.7 million kilowatts of installed peaking capacity and an additional 2.66 million kilowatts under construction. It has nearly 10,000 miles of high and extra high voltage transmission lines which, with associated generating projects, represents a plant investment of more than $2 billion. Its gross annual income is about $90 million, and soon will exceed $100 million. Much of the economy of the Pacific Northwest depends on BPA's efficient and dependable operation; it supplies about 50 percent of all the electricity used in that great region. Presently, BPA has about 2,700 employees, of whom 60-70 percent belong to unions. Since 1945, its hourly employees have been organized in craft unions that bargain collectively through the Columbia Power Trades Council. It is vital that BPA have the best qualified personnel available, and the right man in the right job. BPA's top officials must be able to deal effectively with executives of the many private companies and public agencies with which it does business. An error in judgment by a single BPA substation operator can result in loss of life, damage and destruction of valuable property, or interruption of electric service to a major industry or geographic area. In the case of aluminum plants, which constitute about one-third of our total loads, a service outage of even short duration causes potlines to "freeze" and results in damage which takes weeks to repair. Interruption of service to a city can be a minor disaster; traffic signals and elevators and home appliances stop working, causing confusion, fright, and economic hardship to citizens. Transmission system damage as high as $500,000 has resulted from a single operating error. From a management standpoint, BPA is therefore not an ordinary Government agency. Its management problems, and methods of solving them, are much more akin to those of large privately and publicly owned electric utilities. We found that many utilities, investor owned and public, have used, and are using, psychological tests along with other types of tests as aids in selecting employees. As a matter of fact, I first learned of psychological testing in conversations with executives of privately owned utilities, and with others who had experience with it in private industry. Among such utilities are Duquesne Light & Power, Connecticut Valley Electric Exchange, Ontario (Canada) Hydroelectric, Chelan County (Wash.) Public Utility District, Northern Indiana Public Service Co., Philadelphia Electric, and Washington Public Power Supply System. Attached is a recent article from Electrical World (Mar. 22, 1965) which discusses use of psychological testing by the electric utility industry. The authority for BPA to use tests is contained in the Federal Personnel Manual, chapter 335, subchapter 3, sections 3-5B and 3-6; and chapter 337, subchapter 1-4 and subchapter 3-3 A and B. Excerpts from these references are also attached. Within the past few days, these regulations have been amended. We will, of course, comply with the new regulations. After BPA concluded, for reasons I will discuss shortly, that psychological testing would be a valuable adjunct to the testing provided by the Civil Service Commission, we employed two professional consulting firms-Aptitude Testing for Industry of Los Angeles, and Psychological Service of Pittsburgh. Both organizations are highly reputable, as attested by the list of their clients, including Aluminum Co. of America, Jones & Laughlin Steel Corp., Mellon National Bank & Trust Co., Westinghouse Electric Corp., Western Hydraulics, Ltd. (Borg-Warner subsidiary) and the Garrett Corp. BPA has employed these independent consultants primarily to evaluate present employees who are candidates for certain vacant positions or for special training opportunities. Positions for which we have asked the consultants to conduct tests include trainee power dispatcher, senior power dispatcher, head-system operations section, substation operations superintendent, chief substation operator, and certain key managerial positions. For entry-type craft applicants and prospective management trainees, BPA uses standard tests that we ourselves administer, such as the Kuder preference record-vocational, manual dexterity tests, and the Civil Service Commission's general aptitude test. For each position in the psychological testing program, BPA provides a job definition and qualifications statement. The consultant selected to conduct the testing for the position then determines the appropriate tests to make up the "test battery," including achievement, interest, aptitude, and personality tests. The tests which are being used are limited in distribution by the publisher and are under the control of the contractors. Thus far, BPA has spent a total of about $15,000 with the two firms testing for a total of 29 vacant positions. Aptitude Testing for Industry has tested 58 employees at a cost of $150 each. Psychological Service of Pittsburgh has tested 47 employees on a basis of $25 per hour for professional time, $10 for technical service, and $6 for clerical service, if any is required. The importance of psychological testing, we believe, should not be overemphasized. The appraisal based on such testing is not the primary factor in management decisions as to promotion or transfer. It is one of many elements considered by management. Others are confidential appraisals from supervisors and fellow employees, educational background, experience, seniority, past performance, and interviews. A combination of three factors led Bonneville to try psychological testing as an aid in selecting key managerial and operational employees. First, we are constantly looking for ways to improve our efficiency. Government agencies are sometimes criticized for alleged unwillingness to try new ideas, to streamline their organizations, to give better service to the public at minimum cost. The management of any bureaucracy, public or private, must constantly fight a tendency to preserve the status quo, to do things today in the same way as yesterday without asking whether there may be a better way. There's an old joke in bureaucratic circles that if you never do anything, you won't be accused of making a mistake. At Bonneville we reject such a philosophy. We are ready to try new ideas that seem to have merit. If we make mistakes, we regard them as the price of progress. A second, and more specific, circumstance that led us to explore better ways of testing for certain positions was that we discovered from an attrition study conducted in 1962, that some 300 employees would be eligible for retirement or retired by the end of 1967. Over 50 of these were in positions of leadership at the middle management level and above. Further study indicated that well qualified replacements for the 50 officials were not clearly identifiable in the BPA staff. The third circumstance was that during the very same period many key employees would be retiring, the Bonneville program would be greatly expanding. In the 4 years that I have been Administrator, our construction program has increased from less than $20 million to more than $100 million annually. Incidentally, we have only increased the number of employees during this period by about 340, or less than 15 percent. With this background we chose the two reputable and well qualified consulting firms mentioned earlier. We then tested a group of 10 top BPA employees either for the positions they were then occupying, or for other top management positions. This trial run showed that, to a remarkable degree, the appraisals resulting from the tests corresponded with our knowledge of the abilities of the employees in their jobs. Based upon these preliminary results, we entered into a limited test program. The consultants, incidentally, cautioned that the appraisals derived from the testing program were not 100-percent reliable. They advised that we not make personnel selections solely on the basis of these tests. We have followed their advice. We began to use the tests in July of 1963, and have continued to use them to date. In February of this year, however, we did not renew the contract of one of the testing services, Aptitude Testing for Industry. By then we were satisfied that one firm could better serve our needs than two. When we instituted the testing program, we specifically instructed our staff that the results were to be cautiously used. In a memorandum to division directors and area managers, the following criteria were established: "Appraisal and development of employees for key positions. "Expanding programs and the increased number of employees eligible for retirement point up the need for a program to select and develop employees for key positions. Greater use will be made of various appraisal techniques in identifying employees with potential for filling these positions. "The Administration and its employees will mutually benefit from this program as maximum use will be made of each employee's skills and abilities and maximum opportunity will be provided each employee in developing his talents. Areas of weakness that need to be strengthened, such as lack of certain knowledge, can be pointed out to the employee. Outside study, detail to other positions, and similar training can be provided which will offer greater opportunity for employee advancement. Also, strengths of employees, which had not been previously recognized, will be identified. "Appraisal techniques which will be used include analyses of experience and training, performance appraisals, interviews, and a test battery designed to measure aptitude, interest, and achievement. All of these sources will be used in obtaining more knowledge about the capabilities of employees. This information will assist the employees in choosing career goals, will identify the kinds of training and experience needed, and will permit us to do a better job of matching the abilities of employees with career opportunities in the Bonneville Power Administration. "Initially, the program will be limited to developing replacement potential and selecting employees for key positions, expected to become vacant through retirement during the next few years. Results derived by use of these appraisal techniques will be discussed with employees. The information will continue to be confidential and will be available only to authorized personnel and employees involved. "All of these methods of appraisal are now used. We are, however, endeavoring to expand and improve them. For this reason professional consulting firms will assist in developing the program. Employee groups will be consulted before any final program is adopted. "In order that there be full awareness on the part of employees or supervisors, division directors and area managers are requested to review the content of this memorandum with them at staff meetings, or in some other appropriate manner. "(Signed) CHARLES W. KINNEY, "Deputy Administrator." Next, I wish to advise the committee of the steps we have taken to guarantee the privacy, and individual dignity, that our employees are entitled to have respected: 1. Our decision to use independent consultants was based, in part, upon our belief there would be no chance of test answers falling into unauthorized hands. No one in Government, except the person taking the test, ever sees the test answers. If we had retained a staff psychologist to administer the tests and appraise the results, it would have been harder to guarantee this privacy. 2. The consultant furnishes us only with an appraisal of the employee based on the results of the tests. It is based upon the test and does not show answers to specific questions. It is seen only by the BPA staff members with authority to select the man or woman to fill the job, and, in a few cases, by the immediate supervisor of the candidate for promotion. The appraisal is kept under lock in the office of the Deputy Administrator. 3. We do not test on a mass-production basis. Of 263 positions filled since we started this particular program, we have tested for only 29 positions. Of 125 categories of positions in our entire organization, we have tested in only 9 categories that we regard as critical to the successful operation of BPA. The consultant "tailor makes" the tests for each position, and interviews the applicants both before and after the examination. This costs more money, but it assures that each of our employees is treated as an individual and that, whether or not he is selected for the job he is competing for, he gets the benefit of friendly and helpful advice from the consultant as to areas in which he can improve himself. 4. We have advised our selecting officers that the appraisal should be considered along with all other pertinent information. It is not to be used as the sole selection factor. With these safeguards, we believe it cannot fairly be said that our testing program infringes upon our employees' right of privacy in an unjustified way. No one has a vested right to Federal employment, nor for that matter, to employment with a private firm. When a man or woman seeks new employment (or, as in our testing program, a promotion), he necessarily consents to divulging certain information which the employer otherwise would have no right to ask. For example, an applicant for Federal employment must take a physical examination. For some individuals, this can be very embarrassing. Such an applicant, further, must consent to be fingerprinted; he must reveal whether he has received treatment for a mental disorder; he must divulge past arrests and convictions; he must tell whether he ever belonged to a subversive organization. He will be investigated by the FBI or Civil Service Commission. If he is the head of an agency, he may be required to disclose his property holdings and debts, as well as his wife's; and he may be required to dispose of certain properties involving a possible conflict of interest. The Government, as a government, could not thus invade an ordinary citizen's privacy and individual liberty. To do so would be the grossest violation of constitutional rights. But the Government, as an employer, has not only the right but the duty to obtain this information, and thereby assure that Federal employees will be competent and trustworthy, as well as mentally and physically qualified to perform on the job. The real question, then, is not whether our testing invades privacy. Any test, even a physical examination, does that. The question is whether the tests, as we administer them, produce relevant information that enables us to make more intelligent decisions in filling certain key jobs. We sincerely believe that they do enable us to make fairer and wiser decisions. We believe, too, that Bonneville employees also benefit from psychological testing. We reduce the chance of putting a man or woman in a position where he or she would be unqualified and unhappy. We point out possible areas of strength and weakness so that the employees can better improve their skills and obtain advancement. In essence, the objectives of our psychological testing program are to assist in identifying talents of employees, to place them in jobs where their best talents will be utilized, and to avoid placing them in jobs which require talents they do not possess. Psychological testing thus helps to minimize the "square peg in round hole" situations that probably exist in every large organization. A brilliant engineer is not necessarily a good executive. An expert accountant may not be able to fill a job that requires dealings with the public. An outstanding electrician may not have the temperament to be supervisor. A man or woman in the wrong job is neither happy nor efficient. He may develop anxieties and tensions that adversely affect his health, even shorten his life. Employees who work under his direction may also feel frustrated. The relevancy of a test cannot, we believe, be determined by selecting individual questions from the test and considering them separate and apart from the rest of the test. We have chosen competent and reputable consultants to do the testing. We have sought, and received, assurances from them that they ask only questions which in their professional opinion are relevant to their making an intelligent appraisal of the applicant's qualifications for the position involved. We have not attempted to overrule their judgment, any more than a patient who has selected a good doctor, or a client who has retained a competent lawyer, attempts to interfere with their professional judgment. We have considered, also, whether, despite the prerogative of an employer to obtain confidential information from his employees, there is something morally wrong in testing to appraise an individual's mental and emotional qualifications to fill an important job. We are convinced that, as we administer such tests, they are perfectly proper and moral. For many years I was a vestryman, and for several years senior warden of an Episcopal parish. The canons of our church required both physical and mental examination of candidates for the clergy. Other churches, I understand, test the mental qualifications of all persons entering the mission field. Surely, if there were a moral question involved in psychiatric or phychological testing, our churches would not require it for any positions. One reason that some denominations have employed testing is that clergymen and missionaries must have certain emotional and mental qualities to survive nervous strains inherent in their work. The churches have not abjured the teachings of modern psychology; some, at least, have attempted to use this teaching to make more intelligent selections of men and women to carry on their work. Finally, let me say that I do not think the Bonneville Power Administration would collapse if we discontinued our present testing program. But I think it would be a step backward, and a disservice to the cause of good public administration, if we were compelled to abandon the program because of misunderstanding, or because of the mistakes of others who have used testing programs carelessly or thoughtlessly. We are proud of the forward-looking personnel policies of Bonneville Power Administration. We are proud, too, of Bonneville employeesas able and dedicated a team as ever planned, built, and operated a great electrical enterprise. We will continue to do our best to stay in the vanguard of efficient, considerate, and conscientious public administration. (Attachments to statement follows:) ATTACHMENT NO. 1 [Electrical World, Mar. 22, 1965] MANAGEMENT NEWSLETTER Psychological testing has woven its way into the fabric of American industry. What's more, it has shifted its sights from selection of first level workers to higher level management. Why the psych test? One management association says simply: "To keep bad apples out of the barrel." Another source says it's because companies are more concerned with waste elimination and sustaining creativity. In addition, they are taking on larger commitments due to fringe benefits and payments for unemployment compensation payments. Another reason is the attention psychology has been getting in industrial management graduate schools. How do people feel about psych tests? Testing is in a curious position. It's held with too much contempt, or viewed with too much monistic reverence. The latter group considers testing a panacea for hiring, firing, promotion, transfer, and virtually every other personnel problem in industry. There is also a third group, which says the psych test can be of great help to management. But this group's rationale seems faint beneath all the shouting. It maintains that, like everything else, the psych test is innocent in itself. It's only when the idea of the "person" is lost that these tests become corrosive. Such a thing can easily happen, since the values of the testers and testmakers, who create a market for all this, are imbedded deeply into the validity of the tests. How should they be used? What's their value? That's the subject of this newsletter. WHAT PSYCH TESTS MEAN TO MANAGEMENT "I've been with the company for 15 years. I've been promoted three times and received a number of raises. On top of this I've worked hard and I think I've done a darn good job. You know me, you know my family, and you know what I can do. Why, all of a sudden, do I have to take one of those psychological tests? What's happened to your good judgment?" So, another manager, in line for an executive position, readies himself for what has been dubbed "P" Day-probably the most critical time in the manager's corporate life-the day of the psychic probe. Perhaps this manager is convinced his superiors have lost confidence in their decisionmaking abilities and have collectively sold out to scientism, which, among other less-than-brilliant achievements, has eroded empathy and many an |