Scores, Percentiles and Their Significance
On the traditional test, all questions were worth equal points. On the GMAT CAT each question is assigned points based on the level of difficulty. There are three factors that determine your final score. The first two factors have the most bearing on your score.
We discussed the third factor in our previous edition. In effect, this is measuring how well rounded you are in all areas. An individual who scores well in only a few areas will have a lower score than another individual who scored well in all areas. The way that your performance in the various tested topics is quantified is by standard deviation. The deviation between different areas is calculated and the more you deviate [i.e. higher standard deviation] between each section, the lower your GMAT score. This third factor doesn’t have as much weight on the final score as the number and difficulty of questions.
The initial (raw) score from the GMAT CAT is the ability level that corresponds to the response pattern on the administered questions. The two raw scores are combined (not the scaled scores) to form a total scaled score from 200-800. The raw score is also transformed to the Quantitative or Verbal scaled scores. For Verbal and Quantitative sections the scaled score ranges from 0 to 60.
In your score report you are also given a percentile score. This percentile means that you scored better than that percent of the testers. Percentile rankings are based on the entire GMAT test-taking population during the three most recent years. So if you got a score in the 85th percentile that means that you did better than 85% of all the people who took the test in the past three years. While GMAT scores are only a part of your overall application, a high percentile rank demonstrates that you are better than most people in the Verbal and/or Quantitative areas.
For Verbal, you will be in the 99th percentile if your scaled score is at or above 46. In comparison, it is much more competitive in Quantitative. The 99th percentile requires a scaled score of 51. This means fewer people score on Verbal than Quantitative. So make sure you don’t drag your total score down because of a mediocre performance on Verbal.
There is a degree of error with the GMAT as with all standardized tests. The standard error of difference for the total GMAT score is about 41, according to Graduate Management Admissions Council. This means that the difference between the total GMAT scores actually received by two test takers could be within 41 points above or below the difference between the test takers’ scores of true ability. The standard error of difference for the Verbal scaled score is 3.9, and for the Quantitative scaled score 4.3. Research also indicates that a test-taker will most likely earn a Total score within about 30 points of a score of true ability. Your Verbal and Quantitative scaled scores are probably within about 2.9 points of your true scores.
GMAT scores are a relatively reliable predictor of academic performance in the first year of a business school program. Studies have shown that the median correlation between GMAT scores and first-year grades was 0.41 (perfect correlation is 1.0). Comparing 0.41 to the median correlation of 0.28 between undergraduate grade point average and first-year grades, you can conclude that business schools do have a strong incentive to see good GMAT scores from applicants. Because there is a degree of error, we all should exercise caution in comparing two scores. That is why other parts of your business school application are also as crucial to your admission.
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