Presented at the American Association for Public Opinion Research, May, 1996, Salt Lake City, UT

1

USING COGNITIVE TESTING IN THE DESIGN OF A BUSINESS SURVEY QUESTIONNAIRE

Karen L. Goldenberg, Bureau of Labor Statistics

Bureau of Labor Statistics, 2 Massachusetts Avenue, N.E., Room 4985, Washington, DC 20212

KEY WORDS: Establishment survey, cognitive

testing, business births, questionnaire design

1. Introduction

This paper reports on the use of cognitive testing to

develop the Business Births Pilot Study (BBPS) questionnaire. One objective of the BBPS is to test the

feasibility of identifying new businesses by means of a

telephone interview with recent recipients of new

unemployment insurance (UI) accounts. The task of the

BBPS questionnaire is to differentiate between newlyestablished businesses, called business births, and businesses that obtained new accounts for other reasons—

in a telephone interview lasting 5 minutes or less.

The context for the BBPS is the Current Employment Statistics (CES) Survey. CES is the source of

current monthly data on U.S. nonfarm payroll employment. The Bureau of Labor Statistics (BLS) conducts

this survey each month with a sample of approximately

400,000 business establishments. While the sample is

large, it does not currently include new businesses, or

business births, in the early months of their business

lives. The BBPS is testing one approach to bringing

these new businesses into the CES sample much more

quickly than has been possible in the past.

A business birth is a business establishment, with

employees, which formerly had no chance of being

selected in the survey (Grzesiak and Lent, 1988).

Business births contribute from 1 to 4 percent of the

payroll jobs in the United States (Subcommittee, 1994),

on a base of approximately 115 million payroll jobs.

One reason for conducting the BBPS is to obtain a

more precise measure of birth employment.

CES is a Federal/State cooperative statistical program that is related to State UI programs. States

require most employers to pay quarterly UI taxes for

their employees. Participants in a State's Unemployment Insurance (UI) program comprise the CES sampling frame. Each State selects a sample of employers

in the State, following guidelines from BLS. The UI

account number is the basic unit by which employers

fall into the CES sample.

Employers open UI accounts in each State where

they have business establishments. Most States require

employers to register for an account within 90 or 180

days of becoming liable for UI taxes in that State. In

addition to new businesses, reasons for new UI

accounts include changes in ownership, mergers or

acquisitions, name changes, and incorporations. In

general, an account assigned to a continuing economic

venture (such as an ownership change) had a prior

probability of selection into CES and is not a birth.

However, an established business may become a birth

by opening a business unit in a State where it does not

currently have a UI account. Similarly, an organization

that moves from one State into another becomes a birth

in the new Stateand a death in the old one.1

The BBPS is a telephone survey of employers who

received new UI accounts in the preceding month. Data

collection for the BBPS began in July 1996. The study

will be conducted in up to ten States, using a sample

drawn monthly from those States' Employer Master

Files. Interviewers will contact the establishments in

the sample, administer a series of questions to determine the birth or non-birth status of those units, and

obtain initial and current employment for the birth

units.

2. Cognitive Research for Establishment Surveys

The theories and methods of cognitive psychology

have given survey researchers tools with which to look

at the response process from the perspective of the

respondent. A growing literature describes the application of focus groups, think-aloud interviewing, respondent debriefings, retrospective probing, and response

analysis surveys, among others, to establishment

survey questionnaire design. (Phipps, Butani, and

Chun, 1995 summarize relevant research.) Most of the

establishment surveys in this literature involve

personal interviews to test self-administered (mail)

questionnaires.

In any survey, the questionnaire must reach a

designated respondent. In an establishment survey, a

major issue is what the respondent's organizational role

should be. While information on the characteristics of

these organizations is supplied by individuals, they do

so as spokespersons for the organization rather than for

themselves (Cox and Chinnappa, 1995). We usually

seek a spokesperson who is the "most knowledgeable"

respondent, described by Tomaskovic-Devey, Leiter,

and Thompson (1994) in terms of the authority to

respond, the capacity to respond, and the motive to

respond. These authors suggest that authority may be

limited by the respondent's position, the

establishment's rules or policies governing surveys, and

relationships with parent organizations. Capacity to

respond refers to an organization's practices and

division of labor as it affects relevant knowledge for

the survey questions, while motive involves both

organizational and individual willingness to

participate. Put another way, capacity refers to both the

respondent's ability to understand the request for

information and the organizational constraints that

affect the respondent's ability to supply the data. For

 

1Research on business deaths will parallel that of births. The net

difference between births and deaths is estimated at 0.5 to 1.0

percent of payroll employment (Subcommittee, 1994).
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example, establishment survey requests for information

from records may not match the way information is

stored in those records (e.g., Phipps, 1990;

Goldenberg, Butani, and Phipps, 1993), a factor which

contributes to measurement error.

Tomaskovic-Devey et al. (1994) maintain that

organizational complexity influences both the authority

and capacity to respond. Consequently, the owner of a

small single establishment firm is likely to have both

the knowledge and the authority to answer survey

questions, while the owner of a large single

establishment firm has the authority but not necessarily

the knowledge. They liken the role of small-business

owner to that of a head of household in a household

survey. In this case, the respondent is a spokesperson

for the organization, but is reporting information

related to his or her own personal situation as owner.

The organizational spokesperson, however, is a

human being and responds as an individual. Therefore,

the processes that take place when an individual is confronted with a question apply to establishment contexts

as well as surveys of individuals or households. Models

posed by Cannell, Miller, and Oksenberg (1981),

Tourangeau (1984), and Willis, Royston, and Bercini

(1991) all suggest that a respondent must comprehend

a question, perform some type of mental processing in

which to determine whether and how to find the

answer, find the answer or choose not to, and produce

a response that incorporates some element of

judgement as to what the respondent wants to reveal

and what the question was seeking.

Edwards and Cantor (1991) extend the individual

response model to the case of establishment surveys

requiring the retrieval of record-based data. Their

approach begins with the encoding of information,

which they call record formation, continues with comprehension and a decision as to the source of information, turns to record look-up instead of retrieval, and

continues with judgement and communication of a

response. These models of individual question-answering processes can be placed within the context of the

Tomaskovic-Devey et al. model, given that a respondent has the authority and capacity to answer questions

and is motivated to do so.

Motivation to respond is both an individual

attribute and an organizational one. The individual

respondent makes a decision about the feasibility or

value of attempting to retrieve information before

doing so. Part of this decision could be a determination

of whether the question can be answered from memory

or whether it is necessary to obtain it from an external

source (Willis et al., 1991). At the organizational level,

Tomaskovic-Devey et al. (1994) view motive in terms

of the organization's best interest, which may result in

nonresponse if the potential respondent sees providing

information as counter to that best interest.

3. Questionnaire Development

The Business Births Pilot Study seeks to obtain a

small amount of information from the sampled businesses, but has a vested interest in obtaining information that is highly accurate and that conforms completely to CES definitions. We will obtain the reason

for a new UI account, the birth status (determined primarily by whether the new UI account is replacing

another one), and if a birth, when the business began,

number of employees at birth, and current

employment.

As the questionnaire evolved, the need for cognitive

testing became increasingly apparent, with uncertainty

about how respondents would react to and answer certain questions. Issues centered around:

• The choice of respondent. Who should we speak

to, and how would we find them? Would the Stateprovided contact be able to answer the questions?

• Respondent understanding of basic concepts.

Would respondents be familiar with UI accounts? If

not, would it affect our ability to conduct the

survey? How would respondents describe their

business start dates? How would they interpret the

number of employees?

• Content. Does a forced-choice question cover the

entire range of reasons for new UI accounts, or do

we have to ask an open-ended question? Do the

questions provide the information necessary to

determine birth status and birth employment?

• Questionnaire mechanics and question wording.

How should we phrase questions for different

respondents? Would wording that was appropriate

for one group be awkward for another?

• Response strategies. Would respondents use records or answer from or memory? Would respondent characteristics or organization attributes affect

the response process and response accuracy?

3.1 Cognitive pretesting procedures

We conducted a total of 18 interviews, all at the

respondents’ workplace. The interviewing approach

was one of asking a question, followed by structured

probes while the initial question was still in short-term

memory. Willis et al. (1991) describe several advantages of structured probing over think-aloud interviewing, including giving the interviewer the flexibility to

direct the interview and to focus on emerging themes.

The planned probes also allowed us to obtain comparable information about the questions from each respondent. Interviews averaged 25 to 30 minutes and were

audio-taped and transcribed. Most interviews took

place between January and March, 1996.

3.2 Cognitive Interview Schedule

The cognitive interview schedule consisted of the

most recent version of the proposed telephone interview schedule, supplemented with follow-up questions

about specific items. Response probes included requests

for paraphrasing, time period, meaning of terms, and

who was included in quantitative responses. We also

asked whether respondents would be able to find
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employee counts in their records, although we did not

ask them to do so.

We modified the interview schedule incrementally

as problems arose, ultimately making two major sets of

revisions. The second version received no further cognitive testing, but was incorporated into the telephone

questionnaire for pretesting.

3.3 Respondents

We obtained names of employers who had received

new UI accounts during the preceding month from UI

program offices in two states. We called the designated

contact person and read a prepared script that introduced BLS, explained that we were developing a business telephone survey, and asked for about 30 minutes

to test the questionnaire. A total of 183 calls with 55

establishments ultimately resulted in 18 completed

interviews (33 percent of establishments, 10 percent of

contacts). Direct and indirect refusals (e.g. cancelled

appointments) accounted for another 27 percent of the

contacted establishments. We were unable to locate or

speak to a respondent at the rest of the establishments.

While the number of interviews is small, respondents came from most of the major industry categories,

and a variety of business sizes. Eleven of the 18 businesses were in trade, services, and finance, which is

indicative of the locus of business formation in the

1990s. Nearly three-fourths of the completed

interviews were with business owners, and these were

distributed across the size classes. Of course, the small

number of interviews means that any conclusions

drawn from them are tentative and suggestive at best.

4. Findings from the Cognitive Interviews

4.1 Who is the respondent?

As noted above, an important element of an establishment survey is identifying the correct respondent.

In most cases we expected this person to be the owner

of a small business, and our experience is consistent

with this expectation. Thirteen of the interviews were

with owners, and all but one was present at the time

the transition took place. Nearly all of the non-owners

were also present at the start. Because of the respondents' personal involvement with the business, many of

our questions appear to tap autobiographical memory.

4.2 Understanding Basic Concepts

Unemployment Insurance Account. The BBPS centers around the concept of a UI account, and we were

concerned that respondents might not be familiar with

these accounts. We assessed their knowledge by asking

the respondent to tell us what "unemployment insurance account" meant. Two-thirds had at least some

sense of UI as a fund into which they paid taxes for the

benefit of their employees. Equally important, knowledge of UI was not necessary to answer the BBPS questions. Even respondents who did not understand UI

were able to provide a reason for getting a new

account, and were able to answer the other questions.

To ensure uniformity of understanding, however, we

now introduce the questions about a new UI account

with a phrase describing UI.

Business start date. If the business is a birth, we

want to know when it started. Business start date is a

concept whose meaning evolved along with the BBPS

questionnaire. Originally, we thought in terms of the

date the owners took control of the business and/or the

date the business began operations. However, there was

some ambiguity as to whether “begin operations”

meant the date the business opened or the date that the

owners first began to perform business functions.

Respondents, as it turned out, had no such ambiguity in mind. New business owners considered

assumption of ownership and start of operations as the

same thing, using phrases such as “we signed our

contract in...”, “we opened in...”, “the first month that

we had employees,” and “opened our doors.”

As a clarification, we asked respondents:

If I'd asked "when did your company first open its

doors", instead of "when did you begin

operations," would you give me the same answer

or a different answer?

Everyone who answered this question said "same

answer." However, we discovered that the date the

business began operations did not necessarily coincide

with the date the business first hired employees. In

response to a question about whether the business had

employees on its books prior to starting operations,

several said they did.

After considerable discussion, we decided that what

we really wanted to know was when the business

became a payroll employer eligible for CES, which

means when the business first hired employees. The

telephone version of the questionnaire now asks if the

business has employees other than the owners, and if

so, asks for the month and year the first paid

employees reported to work.2

Cognitive issues: Most respondents seemed to comprehend the question of business start date in terms of

opening their doors. Judging by the speed and the precision with which most answered the question, the date

the business began is highly salient to owners and

original employees alike and is subject to immediate

recall.

Number of employees at start; number of employees

at current pay period . We wanted to know how many

employees the business had when it first had

employees, and we posed this question in terms of the

first payroll. All respondents reported from memory

the month and year that the business issued its first

payroll. Two-thirds gave a precise answer about the

number of employees, while the rest estimated answers.

 

2 Start date retains some ambiguity for businesses whose only

employees are the owners. A business is not an employer for CES

purposes unless it has paid employees. New business owners may

not pay themselves in the beginning, and may not take pay

consistently. Therefore we consider the start date for businesses

with no paid employees as the date the business began operations.
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How did these respondents arrive at their answers?

Respondents from small businesses with only a few

employees were able to retrieve the information directly from memory, or by mentally counting individual

employees. One respondent looked at the first payroll

on the computer (i.e., checked records). Another said

"I write the checks. I know." Respondents from larger

firms generally used some form of estimation strategy,

but the strategy was still memory-based. For example:

(“Probably about 20”) “I hired the opening staff,

and I remember how many people I had. And I just

added myself and the manager.”

When asked about the number of employees for the

current pay period, most respondents used a similar

approach to answering the questions. An exception was

respondents at the larger firms. For example:

“I just got the report about five minutes ago and I

haven't looked it at. I probably would say...147.

When asked how she arrived at this number:

“Because the last payroll we'd had 143 and I know

we've only hired a few people since that time. And

because we're getting really concerned about how

many people we have I'm watching it closely.”

Another respondent based his estimate on the physical

size of the business:

“It's about 10. I mean, regarding number of

employees in this kind of business, the number of

employees stays pretty flat. I know how many people

I need on my register and unless I expand, and add

registers or add space, it's never going to change.”

We did not ask respondents to check their records to

answer these questions. However, all respondents said

they would be able to find the number of employees

from the first and the current payrolls in their records.

An important comprehension issue is who is

included in the count of employees. To avoid ambiguity, we used several cues to describe the individuals

that should be counted, matching the CES definition.

A company's employees include full and part time

workers, temporary workers, managers, executives,

office and clerical workers, and all other paid

employees who are covered by unemployment

insurance. How many employees did [COMPANY

NAME] have on its first payroll?

About half of the respondents did not include

owners of the business in the count of employees, even

after we modified the question to include the phrase

"owners of incorporated businesses." When asked why,

respondents said it was because the owners were not

getting paid.

Current Employment/Pay period including the

12th. The final piece of information that we seek from

business births is current employment. More precisely,

we want to know the total number of employees who

worked or received pay during the pay period that

included the 12th of the month. The pay period including the 12th is a standard BLS concept that provides a

uniform reference period for payroll employment

statistics. By obtaining business birth employment for

the pay period including the 12th, BLS can estimate

the effect of new businesses on overall payroll

employment.

The pay period of the 12th may be a standard BLS

concept, but these interviews suggest that it is not well

understood in the business community. Respondents

confronted with it for the first time seemed confused.

Although they were willing to answer a question about

the number of employees, they made quite a few errors

in deciding what the pay period was.

We addressed the problem by adding questions to

the telephone questionnaire. We first ask how often the

employer pays its employees, so as to focus attention on

specific pay periods. Next, we ask for the first and last

days of the current pay period, and use a computer

algorithm to determine whether the current pay period

ends before the one with the 12th of this month. If the

pay period with the 12th has been completed, we ask

for employment for that pay period. Otherwise we ask

for the number of employees during the current pay

period, so as to get employment in the current month.

If an employer pays employees on more than one pay

cycle, we ask about the total number of employees in

the current pay period.

Cognitive issues: The pay period of the 12th is

largely a comprehension problem. We hope that the

cues provided by payroll frequency and references to

the dates of the current pay period will help respondents to think about correct reference point. Of course,

in order to report employment for that pay period, they

also have to keep in mind all of the types of employees

who should be counted. It is a difficult cognitive task,

and the difficulty may be exacerbated by telephone

administration of the question.

If respondents do not find the retrieval task worth

the effort, they may resort to satisficing behaviors. We

have already seen this with the respondent who says

"about 10" employees. Telephone interviewers have

been trained to obtain an exact count where possible.

4.3 Questionnaire content

One of the issues explored through the cognitive

interviewing was questionnaire content. Did the questionnaire cover everything it needed to? Did it include

the right questions?

Reason for New UI Account. The focus of the

BBPS is whether or not a business with a new UI

account is a birth. Therefore, a critical element of this

study is whether respondents can provide the reason for

obtaining a new UI account. A related issue is whether

the research team has anticipated all of the reasons that

might result in a birth, so that we can ask the appropriate follow-up questions. We learned from the early

interviews that we had missed some possibilities.
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In order to give respondents maximum flexibility,

we initially posed an open-ended question that asked

why the company requested a new UI account. The

intent was to have the interviewer field-code the

response and select the correct path based on the

respondent's answer. If the answer did not fit into our

categories, we asked a follow-up question which

included “starting a business” and “buying a business”

as examples.

The top half of Table 1 shows the answers we expected when we began interviewing. The bottom half

shows some of the answers we received, and the reason

that eventually emerged. It's fairly clear from the table

that the open-ended question wasn't working very well.

Only 4 of 9 respondents gave us answers that could be

field-coded into appropriate categories, because we had

missed several paths. The most obvious was that of an

employer obtaining a new UI account because he or she

had hired employees for the first time. After expanding

the number of reasons, it was possible to field-code all

9 of the next respondents, and to retrospectively do so

for the rest of the first 9. 

Table 1. Reasons for Obtaining New UI Accounts:

Initial Categories and Sample Responses

Initial Response Categories

• Opened new business

• Incorporated

• Changed name

• Purchased business/changed ownership

• Moved business from another state

• Merger or new branch

• Reopened a closed business

Sample Responses

• "I hired employees." (new business)

• "Because we will be having part time employees, and

in order to have workman's compensation you have to

have it." (new business)

• "Because we are expanding. We started out with contract workers and we have diversified." (hired

employees)

• "To pay my taxes." (ownership change)

Another finding concerning reasons for new UI accounts is that the order in which we present the

possible reasons is critical. In one case a respondent

gave an answer that did not fit our categories. We

asked the follow-up question, with its “started” and

“purchased” cues. The respondent heard "started a new

business," and immediately said "yes." It wasn't until

several questions later that the interviewer discovered

that the new business was really a purchase of an

existing firm. The lesson here is important. We have

established a priority order for presenting reasons so

that items that encompass others are presented first.

For example, "incorporation" precedes name change.3

Business births. We defined a birth as an employer

with a new UI account which had no prior probability

of selection into the CES sample. In many situations, a

birth depends on whether the new account is replacing

another one. Therefore, after learning the reason for a

new account, we determine whether the business already had a UI account in the State of interest. If not,

the new account represents a birth. If so, and the new

account is replacing another one, it is a continuing economic venture and not a birth; otherwise, it is a birth.

Only a handful of respondents were asked questions

about replacing an existing account. In general,

respondents appeared to know whether or not their new

account replaced another one.

4.4 Questionnaire Mechanics and Question Wording

Owners versus nonowners. An important aspect of

question wording involves phrasing questions that

might be asked of either business owners or nonowners. This issue seemed to be more troublesome in

the questions asked about a purchase or ownership

change, but occurs throughout the questionnaire. The

proposed solution was to use "you" when speaking to

an owner, and "the owners" or a third-person pronoun

otherwise. For example:

At the time you/the owners bought [COMPANY

NAME], did you/they already have an Unemployment Insurance account in [STATE] in the name of

another business?

This approach appeared to be satisfactory as long as we

were talking to an owner or an employee of a business

which had an owner. The reference did not work as

well, however, when there were no individual owners,

because the respondent did not personally have a UI

account and there were no owners who might hold one.

Our solution was to substitute [COMPANY NAME]

for “you/the owners” if the respondent volunteers that

the business has no owners.

In a few cases, the respondent was an employee

rather than an owner. Most of the non-owner respondents had a strong identification with the business and

had been present from the start. These non-owners

seemed comfortable with the pronoun "your" even

and perhaps becausethe reference was clearly to the

business and not to them personally.

Separate Questions for Individual Paths. From the

beginning of this project, we planned to ascertain the

date that the business began. This simple idea raised

myriad conceptual problems (see section 4.2) but we

also discovered "mechanical" problems. First, each

reason required a different cue to the respondent in the

 

3The telephone pretests pointed to other problems with this question. As a

result, we revised the entire question strategy. We now ask two questions,

whether the owners opened a new business or franchise and whether they

purchased a business from someone else. If the answer to both of these

questions is “no,” we present a list of other reasons as yes/no questions, and

move to the next topic once we get a “yes” response.
6

follow-up question. The content of several questions is

essentially the same, but the wording is specific to the

situation. For example:

At the time you opened the new branch, did [COMPANY NAME] have any other locations in [STATE]?

At the time the business started operating in

[STATE], did [COMPANY NAME] have any other

locations in [STATE]?

By the end of the cognitive research, we had identified six different sets of reasons for new UI accounts

that were, in fact, business births. When we attempted

to determine the start date for the business, again, the

question needed a cue that related to the reason for the

new account. Although it sounds simple and obvious, it

was only by asking inappropriate question that the

need for multiple question wordings become clear. One

question did not fit all situations.

Order of response options. As noted earlier, by

presenting reasons for a new UI account in one order,

the respondent misunderstood the reason and selected

the wrong one. We subsequently put considerable

thought into the sequence for presenting those options

so as to avoid sending the respondent to the wrong set

of follow-up questions. Even so, there were cases in the

telephone pretest where respondents agreed to two (to

us) mutually exclusive situations, requiring us to

rethink the critical sequence of questions about reasons

for a new UI account.

5. Discussion

One objective of the BBPS is to test the feasibility

of using a telephone interview to identify business

births and obtain employment data from them. Cognitive testing of the proposed questionnaire revealed

shortcomings in question content, language, and question order. The process of addressing these shortcomings led to a reassessment of some survey concepts.

The cognitive interviews did reveal several useful

pieces of information. First, respondents do not need a

clear understanding of a UI account in order to answer

questions about it. Second, many respondents appear to

be tapping autobiographical memory to answer questions about business start date, timing of first payroll,

and number of employees. Both of these outcomes are

encouraging for the BBPS.

On the less optimistic side, respondents had some

difficulty with the pay period including the 12th. The

telephone questionnaire incorporated probes to help

focus the respondent on the correct pay period.

The questions in this interview were not subjected

to rigorous evaluation through a split ballot or other

systematic study. The questionnaire was too complex to

ask many of the questions more than a handful of

times, and few questions remained the same. The

number of completed interviews was small.

Nevertheless, the results were helpful in developing the

telephone questionnaire, and suggest that respondents

will be able to answer questions about reasons for new

UI accounts, business start date, and number of

employees.

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