Employment tests are essential elements of candidate selection -- without assessing a potential employee's knowledge, skills, interpersonal abilities, and core values, you're essentially gambling blind on which employees will give you a good RoI and which will turn into money sinks and frustration machines. There are five general categories of pre-employment testing: Knowledge tests, Personality tests, Cognitive Ability Tests, Integrity Tests, and Skills Tests.
Knowledge testing usually involves questions designed to test for specific pieces of factual knowledge relevant to the job a candidate will be expected to perform. They are generally multiple-choice or simple one-to-five word answer questions -- for example, a knowledge test for a retail manager might ask "In terms of marketing practices, what does the term LBM stand for?"
Generally speaking, personality tests are geared toward measuring three things: the ability to work in a team, the ability to handle stress, and optimism. Almost always, these traits are measured by asking questions, either verbal or essay, about the applicant's past work histories.
Cognitive Ability Tests
These tests measure someone's ability to reason, comprehend instructions, learn under stressful conditions, and solve problems. Cognitive ability tests can be widely variable, from SAT-style multiple-choice paperwork to live-action tests in which the testers create a fictitious emergency and observe how the applicant reacts in what he believes to be genuinely stressful circumstances.
Integrity tests serve to verify that an applicant is honest, dependable, responsible, and socially active. Most often this happens by asking direct, ethics-related questions about events in a person's past, and noting responses that seem to indicate specific antisocial indicators that might disqualify an applicant.
Generally, a skills test is different from a knowledge test in that it seeks to establish the presence (or absence) of skills that are generally considered "innate" or "unteachable" -- skills like leadership, observational acuteness, and work ethic. These tests normally ask questions about interests, work experiences, and 'extracurricular activities' to look for signs of these skills.
By combining these five categories of pre-employment testing, employers can get a solid picture of an applicant before they risk any money on them.