Tag Archives: Training

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  The “No Child Left Behind Act” requires outdated, non-adaptive methods to be used in addition to the modern approaches.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  It’s downright destructive to children for the federal government to force Utah to use outdated, longer, and less precise measures of learning.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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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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Pirates as Risks & Employee Real Options

The New York Times reports on a fascinating sort of Operational Risk – Pirates.  The self-described Somali “Coast Guard” have seized a massive freighter owned by a firm transporting military equipment for the Belize-flagged Ukrainian vessel.  Former Somali fishermen took it upon themselves to extort a “tax” on ships in their territorial waters.  In this case, they claim they simply thought the ship looked big, and wanted to extort a levy.  They claim that they didn’t realize that major weapons were on the ship.

The US and Russian governments are subsidizing the recovery of the military equipment, for an indeterminate customer in Kenya or Sudan.  The USS Howard is reported to be circling the “Pirates”, and Russian Naval vessels are en route to support the recovery of the detailed ship.

I wonder if the Risk managers in Kenya or Sudan or the Ship’s owners in Belize or Ukraine had considered the subsidy from taxpayers in other countries to mitigate the risk of Pirates in their risk forecasting.  Calculating the probability of hijackings on the high seas, although infrequent (like hurricanes, bank robbers and bankruptcies) can be estimated with some degree of uncertainty.  The Times reports that in the past, companies and countries have simply payed off the Pirates, and this as fueled a cottage industry in ocean robbery, thereby increasing the probability of future lucrative attacks.

It appears that in the absence of taxpayer subsidies, Real Options analysts looking to hedge risk would look at several alternatives to mitigate pirate risks.  First they could opt for contracts with Blackwater or some other international private police force.  Or perhaps they would take a less expensive option and staff or train personnel with self defense techniques, or weaponry.  It’s a high-stakes example of managerial Real Options applied to human resource investments.  It reminds me of my first students in the late 1970’s.  I taught Tae Kwon Do, which has specific techniques for thwartin gun-toting thugs.  Because these skills take years to master, it might very well be cheaper to buy high-grade guns and cross-train employees who have other freighter roles to adapt and take defensive roles against the Somali hoards as needed.  Or, perhaps there’s sufficient risk and skill required to add a surcharge for a security detail to protect ships whose courses require journeying close to pirate-filled waters such as Indonesia and Somalia.  Managerial Real Options, such as those I teach and use with my friend and colleague, Johnathan Mun, with his software Real Options Valuation can calculate these uncertainties and value which choices might be useful “insurance policies” against these sorts of risks.

As of September 30, 8pm PST, the US Navy and Russia hadn’t successfully resolved the issue and the Somali “Coast Guard” were demanding $20 Million US dollars ($14M Euros).  Some have speculated that they would settle for $2M.  Clearly there’s some value to preventative defense measures, and only Real Options analysis can quantify and determine which options are “in the money”

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Government Risk & Executive Skill

The announcement of Sergey Brin’s new blog, highlighting the value and challenges of his wife’s new genetic testing firm highlights one sort of risk in Enterprise Risk Management.

The California Department of Public Health caused feelings of terror in genetic testing services when they announced that they would shut them down if they didn’t first pay the government tribute. Brin’s wife is a cofounder of 23andMe, a genetic testing service.

This made me wonder – if 23andMe’s leaders were sufficiently savvy with influence skill, and relationship management with regulators, would they have a higher probability of surviving an encounter with the CDPH?  Robert Cialdini‘s research suggests they would; and it suggests that a portion of managing business risk includes ensuring relationships and the skills that create them are sufficiently high as to weather these types of unforeseen government threats.

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Useful, Free eLearning Creation

I’m fond of the free online tool Udutu to design and develop eLearning. It has great tutorials, based on good educational psychological science, and can be exported in standard formats for deployment either on your own Learning Management System, or in theirs.  I’ve successfully created a Rasch Measurement course, exporting it in SCORM 2004 format, and uploading into a Learning Management System