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Predictors and Hiring Decisions

Executives at an electronics company want to ensure the validity of their "selection batteries" (predictors and or tests used to make hiring decisions). They also want to ensure that their selection batteries are useful and cost-efficient.

The utility of predictors and or tests used to make hiring decisions is determined by a number of factors, including:
?Decision accuracy
?The base rate of successful employees
?Selection ratio
?Cost

I need help in determining the impact of high unemployment on each factor.
What are the effects of having a large applicant pool for a small number of available jobs on each factor?
Which is the most important ? validity or utility? Do organizations value validity and utility equally?

Solution Preview

Hi,

Interesting assignment! Let's look at each question from various sources. I also attached one supporting resource, some of which this response is drawn.

RESPONSE:

1. I need help in determining the impact of high unemployment on each factor e.g. Decision Accuracy, the base rate of successful employees, selection ratio, and cost.

Decision accuracy is imperative regardless of the whether the unemployment rate is high or low. As assessment tools continue to become a more central part of the modern hiring process, the interpretation and use of their results are becoming an important issue to those who are making hiring decisions. The overall issue is that people making hiring decisions have difficulty clearly understanding how they should make use of assessment results in their decision-making process. This is completely understandable, as assessments represent a relatively new area for most folks, and the interpretation of their results takes experience and training. This approach means that hiring should be viewed as a set of steps designed to foster a two-way dialogue with candidates, for the purpose of making informed predictions about the mutual fit between the candidate and the organization. A process approach is built on the premise that there are successive layers of information to be gathered via a dialogue between job seeker and hiring personnel. It is important to understand that assessments are but one part of this dialogue, and that, while assessments can provide a good deal of information about a candidate at different stages of the process, they are not designed to show the whole picture. Rather, assessment results should be but one of many pieces of information that are used by expert decision makers to help collect the data they need to make good, accurate ...

Solution Summary

Several factors related to the validity of 'selection batteries' are highlighted e.g. the impact of high unemployment, the effects of having a large applicant pool for a small number of available jobs on each factor (e.g. decision accuracy, the base rate of successful employees, selection ratio, and cost) and whether the organizations values validity and utility equally. Supplemented with one highly informative article on evaluating selection techniques and decision tools.

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