The subject of temperament testing is a pretty controversial one. These days there are the folks who think it is a bunch of nonsense and those who think that it is a very important part of raising a litter. I am one who thinks that it is important but I definitely do not think that the results are not cast in stone. I tend look at things as movable, able to bend and turn corners.
When I test a litter the breeder typically has an idea of each puppies personality already. After all they have raised these pups from birth and know the litter as a whole. Temperament testing is about pulling each puppy alone, putting them into a strange environment with a stranger (thats me). This enables me to see how the puppy will deal alone, away from the rest of the pack which is usually very different from being with the pack.
The breeder brings out each puppy and places it in the room or area that I am testing and then leaves completely. Each test usually takes me about 15 min. as I like to run through the test and give the puppy time to get comfortable to the new area and the new person. Recovery time is very important, some recover quickly, some do not recover and continue to be very intimidated by the whole situation.
Temperament testing is probably one of my favorite jobs, who wouldn't like spending a couple of hours with seven week old pups? It makes no difference to me what breed I'm testing I love them all. Although the results do matter in testing different breeds. What might be normal for a litter of Cavaliers is going to be very different from say a litter of Australian Cattle Dogs or Rottweillers.
Along with the temperament test; I also read a puppy and jot down extra notes. Things like "big cry baby" "bit really hard" "would stop jumping on me" are things that help to place a puppy into the correct home. Often people want to do something very specific with their dog; maybe therapy, agility or search and rescue. You can pick certain traits that are there at 7 weeks that will lend themselves to proper placement. All puppies are different just like all dogs are different.
Once each puppy is tested and then given a number score. For the average family you would like a number 3 or 4. This number is a rating on how the puppy is dealing with different situations right now and gives the breeder an idea of which type of environment to place them into. Once placed into their new home, a dog can change alot depending on their environment. Good pups can turn into amazing dogs, timid puppies can turn into very social dogs and great puppies can turn into fearful dogs. That's why choosing the right family is as important as choosing the right puppy.
Research and educate.