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Strategic Staffing Third Edition

Chapter 9

Assessing

External

Candidates

Learning Objectives

After studying this chapter, you should be able to:

• Identify different external assessment goals.

• Describe what is meant by an assessment plan.

• Describe different assessment methods and how each

is best used.

• Discuss how to evaluate external assessment methods.

• Identify ways to reduce the adverse impact of an

assessment method.

External Assessment Goals

• Maximize fit

• Accurate assessment

• Maximize return on investment

• Generate positive stakeholder reactions

• Support talent philosophy and HR strategy

• Establish and reinforce employer image

• Identify new hires’ development needs

• Assess ethically

• Ensure legal compliance

Complementary and Supplementary

Fit (1 of 2) Table 9-1 Dimensions of Fit

Type of Fit Possible Dimensions of Fit

Person-Job Fit: the potential of

an individual to meet the needs of a particular

job and the potential of the job to meet the

needs of the individual

Intelligence

Job-related skills and competencies

Job knowledge

Previous experience

Personality related to performing job tasks

Person-Group Fit: the match between

individuals and their work groups, including

their supervisors

Teamwork skills

Expertise relative to other team members

Conflict management style

Preference for team-based work

Communication skills

Personality related to working well with others

Person-Organization Fit: the fit

between an individual’s values, beliefs, and

personality and the values, norms, and

culture of the organization

Alignment between one’s personal

motivations and the organization’s purpose

Values

Goals

Person-Vocation Fit: the fit between an

individual’s interests, abilities, values, and

personality and his or her occupation

Aptitudes

Interests

Personal values

Long-term goals

Complementary and Supplementary

Fit (2 of 2)

• Complementary fit: when a person adds something

that is missing in the organization or work group by

being different from the others

• Supplementary fit: when a person has characteristics

that are similar to those that already exist in the

organization

Possible Assessment Outcomes

Dollar Return on Investment Table 9-2 Return on Investment Formulas

Economic value of improved performance = (Nh × T × rxy × Zy) – (Na × Ca × SR)

Savings from avoiding bad hires = (Nh × HA × CBH) – (Na × Ca)

ROI = Economic value of improved performance + Savings from avoiding bad hires

Where:

Nh = Number of people hired

T = Average number of years employees stay in the position

rxy = Correlation between assessment method and job performance (the amount of

improvement in job performance from using the assessment method)

Zy = Dollar value of improved job performance using the new assessment method

(default value = 40 percent of average base salary)

Na = Number of job candidates assessed

Ca = Cost per assessment

SR = Selection ratio (the number of candidates assessed before making a hiring decision)

HA = Percentage of bad hires avoided (default value 5 percent)

CBH = Average cost of a bad hire (default value $7,500)

ROI = Dollar return on the assessment method investment

Return on Investment

• The savings from avoiding bad hires reflect the fact that

bad hires can actually cost the organization money.

• The return on investment from a new assessment method

is the sum of the economic value of improved performance

and the savings from avoiding bad hires.

• Although staffing should be seen as an investment rather

than a cost, cost is still important for many companies that

simply don’t have the money to invest in more expensive

systems even if they are more accurate at identifying the

best new hires.

• The formula provides a way to estimate the return on

investment of any new assessment method.

Identify Development Needs

Assessment tests can also identify new hires’

developmental needs.

• If a top candidate’s assessment scores show that his or her

organization and time management skills are good but their

customer service skills need further development, post-hire

training can improve these skills.

Some assessment methods even identify applicants’

preferred learning styles, which can decrease training time,

improve training effectiveness, and increase retention.

Legal Compliance (from the UGESP) A test of knowledge and abilities must measure a representative sample of

knowledge, skills, or abilities necessary to perform the job and be operationally

defined.

Knowledge

• Must be defined in terms of behavior.

• Each knowledge must be part of a body of learned information that is used in and

necessary for required and observable job behaviors.

Abilities

• Must be defined in terms of observable aspects of job behavior.

• Each ability should be necessary for the performance of important work behaviors.

• Any selection procedure measuring an ability should closely approximate an

observable work behavior.

To the extent that the setting and manner of the administration of the selection

procedure fail to resemble the work situation, it is less likely that the selection

procedure is content valid, and the need for other validity evidence is greater.

Hiring Stages When people first apply for a job, they are considered job

applicants and are evaluated against the minimum acceptable

criteria for the job, such as relevant education and skills.

Those applicants passing the initial screen are considered job

candidates and are assessed in more depth to evaluate their

characteristics and qualifications as defined by the job specification

as well as on dimensions relevant to person-organization and even

person-group and person-supervisor fit.

• A series of evaluative assessments are often performed, with the lowest

performing candidates being screened out after each phase.

The organization then makes its hiring decision from the group of

finalists that remains after all assessment methods have been

completed.

Some External Assessment

Methods (1 of 2)

Screening Methods

• Resumes and cover letters

• Job applications and weighted application blanks

• Biographical information

• Telephone screens

Some External Assessment

Methods (2 of 2)

Evaluative Methods • Cognitive and noncognitive ability tests

• Values assessments

• Personality assessments

• Integrity tests

• Polygraph tests

• Job knowledge tests

• Behavioral, situational, and case interviews

• Situational judgment tests

• Graphology

• Job simulations

• Work samples

• Reference checks

Contingent Methods • Medical and drug tests, and background checks

Comparison of Commonly Used

Assessment Methods Table 9-3 A Comparison of Some Commonly Used External Assessment Methods

Assessment Method Average

Validity

Applicant

Reactions

Relative Costs

(Development/Administration)

Adverse

Impact

Usability

Assessment centers .37 Good High/High Low Difficult

Cognitive ability tests .51 Good Low/Low High Easy

Integrity tests .41 Low Low/Low Low Easy

Job knowledge tests .48 Good High/Low Low Easy

Reference checks .26 Good Low/Low Low Easy

Situational judgment tests .34 Good High/Low Low Moderate

Structured interviews .51–.63 Good High/High Mixed Moderate

Unstructured interviews .20–.38 OK Low/High Mixed Easy

Personality testing –.13–.33 Good High/Low Low Easy

Biodata .35 Good High/Low Low Easy

Graphology .02 Low High/High Low Low

Weighted application forms .50 Good High/Low Low Easy

Simulations .54 Good High/High Low Difficult

Work samples .54 Good High/High Low Difficult

*Validity values range from –1 to 1, with numbers closer to –1 or +1 reflecting better prediction of job performance.

Weighted Application Blank

Biodata Table 9-5 Sample Biodata Items

Choose the best response to each question.

1. How many different paying jobs have you held for more than two weeks in the

past year?

a. 5–6

b. 3–4

c. 1–2

d. None

2. In my leisure time, the activities I most enjoy doing are:

b. Team sports

c. Individual sports

d. Reading

e. Social activities

f. None of the above

3. Have any of your family ever worked in this industry?_____ Yes_____ No

4. Have you ever repaired small motors at home?_____ Yes_____ No

Cognitive Ability Tests Table 9-6 Cognitive Ability Test Items

The following questions are like those found on the Wonderlic Personnel Test

measuring cognitive ability. The answers are at the bottom of the table. 1. Assume the first two statements are true. Is the final one (1) True, (2) False, (3) Not

certain? • The girl plays basketball.

• All basketball players wear hats.

• The girl wears a hat.

2. Pencils sell for $0.17 each. What will four pencils cost?

3. How many of the five pairs of items listed below are exact duplicates? Smith, T. J. Smith, J. T.

Liao, G. K. Liao, G. K.

Barry, P. P. Barry, J. P.

Kovich, L. E. Kovich, E. E.

Garcia, T. S. Garcia, T. S.

4. DEMAND DEFILE—Do these words 1. Have similar meanings?

2. Have contradictory meanings?

3. Mean neither the same nor opposite?

Answers: (1) True, (2) 68 cents, (3) 2, (4) 3

Steps in Crafting a Structured

Interview Table 9-7 Steps to Crafting a Structured Interview

1. For the job requirements to be measured by a structured interview, identify the

actions and behaviors that illustrate each qualification. For example, what does

leadership skills mean in the context of the job being filled? What do people with

good and bad leadership skills do? What is the impact of different leadership

strategies? Are different leadership approaches equally effective?

2. Write questions that will generate relevant information about the degree to which

candidates possess each job requirement.

3. Create an answer key with benchmark responses for at least the high, middle, and

low scores on the scale.

4. Weight the benchmark responses based on the importance of each question relative

to the others. Give more important questions greater weight relative to the other

questions.

5. Select and train interviewers to increase the interview’s standardization, reliability,

and validity.

6. Evaluate the effectiveness of the structured interview in terms of its validity and the

reactions of stakeholders, including how fair and job related they perceive it to be.

Types of Structured Interviews

• Behavioral interviews: using information about what the

applicant has done in the past to predict future behaviors

• Situational interviews: asking people how they might

react to hypothetical situations

• Case interviews: give the candidate a situation,

problem, or challenge and ask him or her to address and

resolve it.

• All three outperform unstructured interviews and result in

scores that can be used to compare candidates

Behavioral Interview Question Table 9-8 A Behavioral Interview Question Assessing a

Candidate’s Persistence

Question: Tell me about a time when you were working on a project that

you felt was important but that others thought was a waste of time. What

did you do, and what was the result?

5—Excellent: I pursued the project despite the obstacles because I

really believed in it. I wanted the project to succeed and I tried to find

ways around problems.

3—Marginal: I continued working on the project but shifted my focus to

other projects that had higher probabilities of success.

1—Poor: Once I felt that the project had low support, I stopped working

on it.

Situational Interview Question Table 9-9 A Situational Interview Question Assessing a

Candidate’s Communication Skills

Question: Imagine that you are currently very busy working on several

important projects with firm deadlines, but your supervisor brings you a

stack of unrelated paperwork to complete that you feel is unrelated to any of

your projects. In addition, you are certain that attending to this new

paperwork will cause you to miss several project deadlines. What would you

do?

5—Excellent: Explain the conflict to my supervisor and try to identify and

discuss alternatives. It would be important to me to ensure that any changes

were acceptable to both my manager and myself.

3—Marginal: Tell my supervisor about the conflict.

1—Poor: Accept the conflict as part of the job and do the best I can.

STAR Technique

• A technique for answering behavioral interview questions:

• Situation or Task: describe in enough detail for the

interviewer to understand the situation and what you

needed to accomplish

• Action that you took

• Results that you achieved

Evaluating an Assessment Method’s

Effectiveness (1 of 2)

Validity—whether the assessment method predicts

relevant components of job performance

Return on investment—whether the assessment method

generates a financial return that exceeds the cost

associated with using it

Applicant reactions—including the perceived job

relatedness and fairness of the assessment method;

perceiving sufficient opportunity to perform, or believing

that one had an adequate opportunity to demonstrate

one’s ability to do the job, influences perceptions of the

fairness of the selection process, particularly if the person

is rejected for the job

Evaluating an Assessment Method’s

Effectiveness (2 of 2)

Selection ratio—having a low selection ratio means hiring

only a few applicants, which allows an assessment method

to have maximum impact in improving the performance of

the people hired

Usability—people in the organization must be willing and

able to use the method consistently and correctly

Adverse impact—an assessment method is more effective

if it predicts job performance and other important hiring

outcomes without discriminating against members of a

protected class

Reducing Adverse Impact (1 of 2) • Using targeted recruitment to increase the numbers of qualified

minority applicants

• Expanding the definition of job performance to include areas of

contextual performance such as commitment and reliability in

addition to task performance

• Combining predictors can reduce adverse impact – if a cognitive

ability test predicts job performance but discriminates against

women, using it in conjunction with another valid assessment

method that either does not have any adverse impact based on

sex or that discriminates against men, can reduce or eliminate

the adverse impact of the cognitive ability test

• Using well-developed simulations rather than cognitive ability

tests

Reducing Adverse Impact (2 of 2) If only a few applicants are ultimately hired (low selection ratio),

using assessment methods with less adverse impact early in the

selection process and those with greater adverse impact later in

the process

Using banding and assigning the same score to applicants who

score in a range on the assessment

• Think of grades – students scoring from 93 to 100% are placed in the

“A” band, from 85 to 95% are placed into the “B” band, etc.

• Only the banded score (A, B, C, etc.) is used to compare applicants

• This technique can reduce an assessment’s adverse impact but will

also reduce the validity of the test

Assessment Plan (1 of 2) After creating a job requirements matrix, the next step is to identify

the best way of assessing each important job qualification.

The assessment plan describes:

• Which assessment method(s) will be used to assess each of the

characteristics on which applicants will be evaluated

• In what sequence the assessments will take place

• What weight each assessment will receive in determining an overall

score for that characteristic based on the importance of each

characteristic to job performance.

Characteristics that will be trained after hire are not assigned to

any assessment method, but any existing qualifications required

to qualify for the training program should be listed.

Assessment Plan (2 of 2) Table 9-10 An Example of an Assessment Plan for an Accountant

Assessment Method and Its Sequence in the Assessment Process

Characteristic

Importance of

Characteristic

to Job

Performance

(1 = most

important)

Select (S)

Train (T) Résumé

Phone

Screen

Accounting

and

Budgeting

Test

Recruiter

Interview Simulation

Hiring

Manager

Interview

Customer focus 1 S 1 (.15) 2 (.15) blank 3 (.20) 4 (.25) 5 (.25)

Accounting skills 1 S 1 (.15) 2 (.15) 3 (.40) blank 4 (.30) blank

Budgeting skills 1 S 1 (.20) 2 (.20) 3 (.25) blank 4 (.35) blank

Time management

skills

2 S blank blank blank 1 (.30) 2 (.40) 3 (.30)

Delegating skills 2 S blank 1 (.20) blank 2 (.40) 3 (.40) blank

Ability to use

company’s

accounting software

3 T blank blank blank blank blank blank

Attention to detail 3 S blank 1 (.25) blank 2 (.25) 3 (.50) blank

Choosing Assessment Methods • The choice should be based on which methods best assess the

applicant characteristics or competencies identified as important

during the job analysis as well as the ability of the assessment

method to meet other important goals of the external

assessment process.

• Because different methods are good at assessing different

things, and differ in their cost, validity, applicant reactions, and

adverse impact, it is often necessary to use more than one

assessment method.

• Just because an assessment method results in adverse impact,

if it does a good job predicting job performance it may be

worthwhile to investigate the usefulness of various strategies to

reduce its adverse impact so that it can continue to be used.

Discussion Questions (1 of 2)

1. When should employers reassess the assessment

methods they use in hiring?

2. Discuss the advantages and disadvantages of both

structured and unstructured interviews. Which would

you prefer to use? Why?

3. Why go to all the trouble of sometimes costly and time-

consuming assessments when there are no guarantees

they will result in a successful hire?

Discussion Questions (2 of 2)

4. What do you feel are the least effective external

assessment methods? Why?

5. Do you think that it is appropriate for employers to

research applicants’ backgrounds? What about credit

histories? Why or why not?

Opening Vignette Exercise To execute its innovation strategy, Facebook seeks technical talent with strong

skills, previous accomplishments, and both curiosity and motivation. A good fit

with the company’s culture, good understanding of online social media, and

the ability to work well with others are also important. This chapter’s opening

vignette provided some information about how the company currently

assesses job candidates on these dimensions. Reread the opening vignette

and its conclusion, and answer the following questions in a group of three to

five students. Be prepared to share your answers.

1) Do you think it’s appropriate for Facebook to require candidates to write code on

a whiteboard during its assessment process? Why or why not?

2) What are the advantages and disadvantages to Facebook of asking software

engineering applicants to do so much coding during the initial assessment

process?

3) Identify two other assessment methods you think Facebook could use to assess

applicants’ fit with the company’s culture of innovation and smart risk taking.

Develop Your Skills Exercise Develop a scoring key for each structured interview question below and create

a formula to combine the scores into an overall structured interview score for a

retail sales position at a high-end retailer focused on customer service.

1. A disgruntled customer is returning a damaged suit jacket he bought the

previous week that he needed for an event that night. He is extremely upset.

What do you do?

2. A person walks into your store and mentions that she has just moved into the

area and that this is the first time she has visited your store. What would you do

to make her a customer now and a loyal customer in the future?

3. You’re working alone because two people called in sick. Suddenly, five

customers walk into your department at once. What do you do?

Then view the structured interviews available on the book’s companion Web

site for Parvathi, Chris, and Julia. Use your structured interview scoring key to

evaluate each candidate. Then combine each candidate’s interview scores

and choose one to whom to extend a job offer.

Chern’s Case Assignment

a) Develop an assessment and selection plan that does not

exceed the remaining $4,000 budget.

b) Justify your proposed selection system in your report.

c) Submit your assessment plan to your instructor. Receive

scores from your instructor.

d) Use the scoring key you developed for the structured

interviews to view and score the eight structured

interviews. Also view the eight unstructured interviews and

score them if you included them in your assessment plan.

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