In the simplest way personality is defined as a particular combination of emotional, attitudinal & behavioral response pattern of an individual. (Wikipedia)
Personality profiling is a management tool, used by employers to know / evaluate the employee's attributes, values, motivational key points, leadership qualities etc. Profiling helps to connect or match the apt job to the individual, and also helps one work better.

For example an employee who has taken a personality profiling can be matched with the definite kind of job depending on his leadership qualities, emotional quotient, handling stressful situations, behavioral patterns etc. And after the right combination of Job and individual the same attributes can help him work better & show good results. If an individual has leadership qualities, can perform very well with a team and will be motivated if there are more members added to his team after completion of certain tasks. For some others it may be money, fame, opportunity, research, or any other form of perks which motivate them to perform. A personality profiling helps the employers to locate all this and in turn they design tasks for employees to help them achieve and grow, indirectly boosting the companies turnover or profit.

Personality profiling is done with the help of Personality tests. There are many of them, in different forms either fill in the blanks, multiple choice, story completion, simple question and answer etc. The most important point one has to keep in mind is that there is no right or wrong answer in any of these tests, as each situation is perceived in a very subjective manner by each individual. These tests have so many systematic questions that it helps to find out the actual person that one is. These tests also have some questions or situations repeatedly asked in different forms or ways, these are some kind of lie detectors. One may not give out his true feeling as the answer once but invariably will give in his most strong and apt feeling about that situation in the repeated situations.
Scoring a high or a low does not implict a pass or a fail in these tests. As mentioned earlier the profiling helps only locate and match. So an individual may not match a particular requirement or a position in a company, but may be an asset to the company for some other position or job.

There are five major hits assessed in these tests are as follows, (Wikipedia)

-Openness (inventive / curious vs. consistent / cautious)
-Ccientiousness (efficient / organized vs. easy-going / careless)
-Extroversion (outgoing / energetic vs. voluntary / reserved)
-Agreeableness (friendly / compassionate vs. cold / unkind)
-Neuroticism (sensitive / nervous vs. secure / confident)

It is very essential not only for the employer to know about his employees, but also equally important for the employee to understand himself and his personality type for better performance.

Saying all this I certainly would also like to add that only a personality test does not help one select a perfect job. Ones education, his expertise and aptitude and other external factors like situation, availability of similar profiles for the job, ones frame of mind at that point of time etc all play a major role in helping him get a job.

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