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Regression Effect

A human resources director, on learning about the regression effect, decides to hire people who have been fired by their previous employer for poor performance. He argues that the regression effect says people who perform very poorly in their previous job tend to perform well in their next job.

Is this what the regression effect says? Explain.

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The regression effect says that when any group of subjects with low values on some measurement (i.e. job performance) is later remeasured, their mean value will increase without the use of any treatment or intervention. It does not say that the mean value will increase so much that below-average workers will become above-average workers.

Therefore, if you look at a group of people with low job performance, then measure their job performance later, the average level of job performance should be higher. [However, note that the regression effect will also predict that if you look at high-performing workers, then measure their job performance later, their average level of performance will be lower than it first was.]

The human resources director in this scenario does not ...

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