Tag Archives: Learning

Australian CAT for Kids

The Australian State of Victoria’s standard educational assessments include computer-adaptive tests (CATs), reports their new, free manual on report interpretation.  I was pleased to discover that the Victorian Curriculum and Assessment Authority uses the most modern form of human assessment to help children of all ages learn.

In particular, it is noteworthy that their easy-to-read manual includes an understanding of Rasch Measurement.  It notes the specific locations where there are items that are out of scope for a given assessment.  In these places, the child is mismatched with the test – the questions are either too hard or too easy to produce a trustworthy metric.

I’m hopeful that Australia’s educational leadership rubs off on more schools around the world.

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Utah Leadership Supports Computer-Adaptive Testing In Spite of “No Bureaucrat Left Behind” Act

Nine schools in Utah have found the benefits of Computer-Adaptive Testing to trump older methods.  Adaptive tests change to match a student’s skill level, avoiding wasted time and effort on questions that are far below or above their proficiency level.  They’re also at least 20% shorter.  This allows for periodic reassessment, and personalized focus on the specific curricular areas a learner needs to work on.  Each student is treated as a special, unique person.

But the US Federal Government’s Department of Education is behind the times, and making it difficult for Utah to use the modern psychometric methods, according to Utah’s Daily Herald.  The “No Child Left Behind Act” requires outdated, non-adaptive methods to be used in addition to the modern approaches.  While on the surface, the DoE’s request for peer review is something that is good, in applied settings, it’s rarely used.  The instruments I’ve developed would certainly pass the scrutiny of my peers, and the feedback they give is useful.  But these extra steps are typically unnecessary to ensure that instrumentation is useful, as long as professionals develop the Computer-Adaptive Tests.  It’s downright destructive to children for the federal government to force Utah to use outdated, longer, and less precise measures of learning.  While I presume those favored by Washington are “peer reviewed”, I suspect that the review committee is selected by those who are friends of politicians, and are likely unskilled in the recent developments in computer-adaptive measurement.

Fortunately, Utah appears to have visionary, contemporary leadership about steadfastly supporting good measurement to help children learn.  The Utah Legislature, the State School Board and Governor all approved the plan to continue to use it – and the Feds require the outdated assessments to be used as well.  This is both a hassle, unnecessary cost, and an opportunity cost – the children could have been spending the time they’ll take on the DoE tests on learning something new.  Are you a visionary leader like the folks in Utah?  More by The Scientific Leader on Computer-Adaptive Measurement, applied to organizations and business is free here.

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American and European Human Capital Options

A derivative is a financial instrument that gets it’s value from something else.  One special type is an “option” that gives the owner a right, but not the obligation, to buy or sell an asset.  Human resource, or personnel, employment is a special case of Real Options applied to people. In our case, though, we own ourselves and our labor, but for the right price we’re willing to lease it out to employers and clients for a period of time. 

In the case of employment, hiring an employee amounts to buying (call option) the right to utilize labor for 8 hours a day.  In some cases, the terms of an employment contract are extremely limited, such as contracts for professional athletes and union members.  These amount to a European option, such as the case where the owner of a baseball team has the right to release an athlete, on but not before a certain date.  The more flexible type of employment arrangement is the American option variety.  With an American option, the owner can exercise their right (e.g. liquidate the asset, or fire the employee) without respect to a specific date.  In option terms, letting a person go, or not hiring a consultant for another project is called a “put option”.

But with human assets, there are numerous other options employers can choose to take – including redeploying people to work on new projects, in new departments and in different jobs.  The more flexible a person in having skills and motivation to work in areas that are profitable to the firm, the more valuable the person. 

When mixed with psychometrics such as The Scientific Leader’s Computer-Adaptive Measurement(TM) approach, human capital can be valued the same way as other uncertain financial assets – using Managerial Real Options.  Have you valued your human capital the same way as professional financiers?  Do you know where your human capital is best deployed in the portfolio of job tasks and projects in your firm?  How flexible and adaptable is your workforce – to be able to redeploy them to new work as customers, markets, and economic crises unfold?  Have you considered the option of investing in growing the skills of your employees to increase their value and reduce your risk, through training and development?

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$7.7 Trillion Increases Probability of Inflation: Skills Required for Enterprise Risk Management

In a move suggesting the U.S. Government is role modeling Zimbabwe, Bloomberg reports Fed Chairman Bernanke and Treasury Secretary Paulson are prepared to provide more than $7.76 trillion US Dollars – amounting to half the value of everything produced in the nation last year – to try to rescue the US financial system.  This includes the recent guaranteeing of $306B of Citigroup debt this week and $3.18 trillion already tapped by financial institutions.  The commitment eclipses the earlier $700 billion “Troubled Asset Relief Program”.  This inflation of the money supply – printing dollars out of thin air, and in large volumes – will likely devalue the currency and suggests future runaway inflation.

Human Capital & Risk Management
What skills are required by businesses and individuals to mitigate these risks?  While no one can know the future with certainty, The Scientific Leader speculates that for organizations, as part of Financial Risk Management, the management of money in different currencies becomes a crucial skill.  Financial Risk Management is a subset of the larger Enterprise Risk Management.  For larger firms, Financial Risk Management happens in the Treasury department.    As firms liquidate their dollars and switch to other currencies, and hard assets like gold, they will be more reliant on financial professionals with treasury expertise.  Similarly, the treasury department will likely be every more focused on hedging currency risk with financial futures and derivatives.  All of this sort of work could increase the demand for financiers with treasury expertise, and in the short run increase their salaries significantly if the demand outstrips the supply.  Firms that do not yet select financial professions with objective measures of prudence and conscientousness may also increase their use of pre-hire selection processes, such as our computer-adaptive Work Personality Inventory(TM).

What will be the consequence of this sort of runaway inflation on employees?  The lowest paid employees are likely to suffer the most.  An inflated dollar will purchase fewer goods and services, and the least skilled employees will likely suffer the most.  Employers that are still in business can attract and retain these sorts of employees by providing different sorts of benefits that help them survive the crisis, such as firm-subsidized food and housing. 

How severe do you expect the current recession to get?  What human capital risk mitigation practices are you employing now personally to weather a potential sequel to the great depression?  Confession – I’m moving my assets to Peter Schiff’s Euro Pacific Capital.  What are you doing?

Full Employment Act for Financial Risk Managers

CFO.com reports that the one small silver lining in the recent financial crisis is that financial professionals, especially the top job, are more important than ever.  Some have called it a “full employment act” for financial risk managers, who seek to mitigate the downside, and exploit the upside, to “get paid” for taking appropriate risks.

The Institute for Financial Analysts provide a certification program for those seeking Financial Risk Management Skills (FRM), and for $2,500 include instruction in the following areas:

Basel II that involve current banking laws and regulations to create international standards.
Quantitative Analysis, including measurement and modeling of risk
Enterprise Risk Management to manage risk (Avoid, Reduce, Share/Insure, Accept).

Recommended books include The Professional Risk Manager’s Handbook and the Financial Risk Manager Handbook

These address the technical knowledge requirements to be an effective Risk Manager, however, according to the Open Source O*Net online job analysis information include other critical job tasks and skills including personality traits such as integrity, and stress tolerance (Low Neuroticism).  I wonder if pre-employment risk management assessments are used to manage Risk Manager risks?

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Transformational CEOs Win in the Market

Who wouldn’t want to work for an inspirational, considerate, stimulating and charismatic CEO?  A recent study in the top journal in applied psychology looked at exactly this issue, with fascinating results.  The authors looked at 121 CEO’s attributes and correlated them with business performance – both objective sales growth and subjective ratings of their performance compared with competitors.

It didn’t surprise me that transformational leadership significantly predicted performance.  30 years of research, and many meta-analyses that summarize the findings of research support the fact that people high in the attributes that define transformational leaders produce better results.  What fascinated me was that this effect was that transformational founders who stayed a long time with their firm outperformed everyone else; especially if they were in a small firm.  Their CEO performance model was able to account for 29% of the variability in objective sales growth; and 27% of the variability in their own view of their firm performance versus competitors.

The authors suspected this beforehand – that you can see more clearly the impact of transformational leadership on outcomes in smaller firms where there aren’t other factors that will account for business performance.  It was nice to see that longevity, tenacity and commitment, at least in this study, appears to trump the “revolving CEO” approach.  It is also consistent with Google’s success – Co-founders Serge Brin and Larry Page still lead the firm in a “triumvirate” with CEO Eric Schmidt.  The three were ranked #1 most important person on the web by PC world. Amazon.com’s founder Jeff Bezos is also still CEO.

I introduced these methods to Sutter Health, when I was previously their Chief Learning Officer, and they were very well received both in selection and learning & devleopment.

Moodle on my Noodle

Ever since I launched the Scientific Leader, I was pleased that my Internet Service Provider had an easy-to-install, open source Learning Management System for me to include, along with this blog.  Moodle has turned out to be a goldmine of usefulness.  First, I was able to upload an introductory class on Rasch Measurement that I created using Udutu, for free.  Moodle has a very robust user base and frequent upgrades.  I was especially pleased to learn that it also has a testing/quiz function, and curiously has a separate survey function