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Part 5Staffing Activities: Employment
Chapter 11: Decision Making
Chapter 12: Final Match
McGraw-Hill/Irwin
Part 5Staffing Activities: Employment
Chapter 11:
Decision Making
Organization StrategyOrganization Strategy HR and Staffing StrategyHR and Staffing Strategy
Staffing Policies and Programs
Staffing System and Retention Management
Support Activities
Legal compliance
Planning
Job analysis
Core Staffing Activities
Recruitment: External, internal
Selection:Measurement, external, internal
Employment:Decision making, final match
OrganizationMission
Goals and Objectives
Staffing Organizations Model
11-3
11-4
Chapter Outline
Choice of Assessment Method Validity Coefficient Face Validity Correlation with Other
Predictors Adverse Impact Utility
Determining Assessment Scores Single Predictor Multiple Predictors
Hiring Standards and Cut Scores Description of Process Consequences of Cut Scores Methods to Determine Cut
Scores Professional Guidelines
Methods of Final Choice Random Selection Ranking Grouping Ongoing Hiring
Decision Makers HR Professionals Managers Employees
Legal Issues Uniform Guidelines on
Employee Selection Procedures
Diversity and Hiring Decisions
11-5
Learning Objectives for This Chapter
Be able to interpret validity coefficients Estimate adverse impact and utility of
selection systems Learn about methods for combining multiple
predictors Establish hiring standards and cut scores Evaluate various methods of making a final
selection choice Understand the roles of various decision
makers in the staffing process Recognize the importance of diversity
concerns in the staffing process
11-6
Discussion Questions for This Chapter
Your boss is considering using a new predictor. The base rate is high, the selection ratio is low, and the validity coefficient is high for the current predictor. What would you advise your boss and why?
What are the positive consequences associated with a high predictor cut score? What are the negative consequences?
Under what circumstances should a compensatory model be used? When should a multiple hurdles model be used?
What are the advantages of ranking as a method of final choice over random selection?
What roles should HR professionals play in staffing decisions? Why?
What guidelines do the UGESP offer to organizations when it comes to setting cut scores?
11-7
Choice of Assessment Method
Validity Coefficient
Face Validity
Correlation With Other Predictors
Adverse Impact
Utility
11-8
Validity Coefficient
Practical significance Extent to which predictor adds value to prediction of
job success Assessed by examining
Sign Magnitude
Validities above .15 are of moderate usefulness Validities above .30 are of high usefulness
Statistical significance Assessed by probability or p values Reasonable level of significance is p < .05
Face validity
11-9
Correlation With Other Predictors
To add value, a predictor must add to prediction of success above and beyond forecasting powers of current predictors
A predictor is more useful the Smaller its correlation with other predictors and Higher its correlation with the criterion
Predictors are likely to be highly correlated with one another when their content domain is similar
11-10
Adverse Impact
Role of predictor Discriminates between people in terms of the
likelihood of their job success When it discriminates by screening out a
disproportionate number of minorities and women, Adverse impact exists which may result in legal problems
Issues What if one predictor has high validity and high
adverse impact? And another predictor has low validity and low
adverse impact?
11-11
Utility Analysis
Taylor-Russell Tables Focuses on proportion
of new hires who turn out to be successful
Requires information on:
Selection ratio: Number hired / number of applicants
Base rate: proportion of employees who are successful
Validity coefficient of current and “new” predictors
11-12
Utility Analysis
Economic Gain Formula Focuses on the monetary impact of using a predictor Requires a wide range of information on current employees,
validity, number of applicants, cost of testing, etc.
11-13
Limitations of Utility Analysis
Determining the dollar value of performance is extremely subjective and variable for many jobs, and requires making many assumptions about how performance leads to economic success
Important variables are missing from model EEO / AA concerns Applicant reactions
Utility formula based on simplistic assumptions Validity does not vary over time Non-performance criteria are irrelevant Applicants are selected in a top-down manner
and all job offers are accepted
11-14
Discussion Questions
Your boss is considering using a new predictor. The base rate is high, the selection ratio is low, and the validity coefficient is high for the current predictor. What would you advise your boss and why?
11-15
Determining Assessment Scores
Single predictor Multiple predictors
Three models shown
Multiple hurdles model
11-16
Relevant Factors: Selectingthe Best Weighting Scheme
Do decision makers have considerable experience and insight into selection decisions?
Is managerial acceptance of the selection process important?
Is there reason to believe each predictor contributes relatively equally to job success?
Are there adequate resources to use involved weighting schemes?
Are conditions under which multiple regression is superior satisfied?
11-17
Ex. 11.4: Combined Modelfor Recruitment Manager
11-18
Hiring Standards and Cut Scores
Issue -- What is a passing score?Score may be a
Single score from a single predictor orTotal score from multiple predictors
Description of processCut score - Separates applicants who
advance from those who are rejected
11-19
Exh. 11.5: Consequences of Cut Scores
11-20
Hiring Standards and Cut Scores(continued)
Methods to determine cut scoresMinimum competencyTop-downBanding
Professional guidelines
Ex. 11.6: Use of Cut Scores in Selection Decisions
11-21
11-22
Discussion Questions
What are the positive consequences associated with a high predictor cut score? What are the negative consequences?
Under what circumstances should a compensatory model be used? When should a multiple hurdles model be used?
Methods of Final Choice
Random selection Each finalist has equal chance of being selected
Ranking Finalists are ordered from most to least desirable
based on results of discretionary assessments Grouping
Finalists are banded together into rank-ordered categories
Ongoing hiring Hiring all acceptable candidates as they become
available for open positions
11-23
11-24
Ex. 11.8: Methods of Final Choice
11-25
Decision Makers
Role of human resource professionals Determine process used to design and manage
selection system Contribute to outcomes based on initial assessment
methods Provide input regarding who receives job offers
Role of managers Determine who is selected for employment Provide input regarding process issues
Role of employees Provide input regarding selection procedures
and who gets hired, especially in team approaches
11-26
Discussion Questions
What are the advantages of ranking as a method of final choice over random selection?
What roles should HR professionals play in staffing decisions? Why?
11-27
Legal Issues
Legal issue of importance in decision making Cut scores or hiring standards
Uniform Guidelines on EmployeeSelection Procedures (UGESP) If no adverse impact, guidelines are silent on cut
scores
If adverse impact occurs, guidelines become applicable
Choices among finalists
11-28
Discussion Questions
What guidelines do the UGESP offer to organizations when it comes to setting cut scores?
11-29
Ethical Issues
Issue 1 Do you think companies should use banding in
selection decisions? Defend your position.
Issue 2 Is clinical prediction the fairest way to combine
assessment information about job applicants, or are the other methods (unit weighting, rational weighting, multiple regression) more fair? Why?