Week 7 Discussion HRM634

Chapter 11 Choosing

and Hiring Candidates

Combining Assessment Scores

When using more than one assessment method, as

is usually the case because the validity of the

candidate’s assessment is more valid when using

multiple predictors, a candidate’s scores must be

meaningfully combined to calculate an overall score

that can be compared across candidates or to a

minimum hiring standard. The assessment plan

should specify how this is to be done.

There are two ways of combining assessment

scores: multiple hurdles and compensatory

approaches.

Multiple Hurdles

· Multiple hurdles: candidates must receive a

· passing score on an assessment before being

· allowed to continue in the selection process

· Costly and take more time due to the need for

· candidates to make repeated visits for the

· different assessments

· Used when the cost of poor performance on that

· characteristic is high

· For example, when safety is at risk

Compensatory Approaches

· Compensatory approach: high scores on some

· assessments can compensate for low scores on

· other assessments.

· This approach is less useful for jobs in which

· specific talents must exist at a minimum level.

Executing the Compensatory Approach

· Unit weighting: giving multiple assessments equal

· weight in computing an overall score

· Rational weighting: experts assign a different

· subjective weight to each assessment score

· Statistical weighting: using a statistical technique,

· such as multiple regression, to assign a different

· weight to each assessment score

· Multiple regression: the most scientific approach

· to determining how to weight each assessment in

· computing a candidate’s overall score

Unit-Weighted Approach

Statistical Weighting Approach

· The output of a multiple regression includes a

· formula like:

· Overall score = c + (b1 * a1) + (b2 * a2) + (b3 *

· a3)…

· In this formula, c is a constant, the b’s are the

· statistical weights applied to each assessment

· method to maximize the validity of the group of

· assessment methods, and the a’s are a candidate’s

· scores on each of the assessment methods. Any

· number of assessment methods can be used.

· For example, if the regression equation looked like

· this:

· Overall score = 24 + (.20 * Cognitive Ability) +

· (.25 * Interview) + (.15 * Personality)

· And the candidate’s cognitive ability score was 70,

· interview score was 75, and personality score was

· 50, then the candidate’s overall score would be

· 64.25:

· 64.25 = 24 + (.2*70) + (.25*75) + (.15*50)

· To be most accurate, the statistical approach

· requires:

· A sample of several hundred or more hires

· A low inter-correlation among assessment

· methods

· A relatively small number of assessment

· methods.

· Because the weights can differ when derived from

· different groups of people, it is best to check the

· stability of the multiple regression equation in

· different groups to assess its actual effectiveness.

· If estimating the regression equation on a large

· sample size is not possible, unit weighting or even

· rational weighting may be a better choice.

· Validity can sometimes be enhanced by

· combining the multiple regression approach with

· global expert judgment.

Combining Multiple Hurdles and Compensatory

Approaches

· Often, some job requirements are essential to job

· performance but others can compensate for each

· other.

· A data entry hire may need to type a certain

· number of words per minute with a minimum

· number of errors, which would be a minimum

· hurdle, but cognitive ability and personality may

· be compensatory factors.

· A typing test can be used at the beginning of

· the assessment process as a hurdle to weed out

· candidates who do not meet the minimum

· typing requirements, then a compensatory

· approach balancing cognitive ability and

· personality used at the end. Scores on cognitive

· ability and personality would be weighted and

· combined in a compensatory manner and the

· highest scoring candidates offered jobs.

Final Choice

· Cut score: a minimum assessment score that must

· be met or exceeded to advance to the next

· assessment phase or to be eligible to receive a job

· offer.

· Rank ordering: ranking candidates from highest to

· lowest scoring.

· Banding: Everyone who scores within a certain

· range of scores is considered to have performed

· equivalently and assigned the same grade.

· Hiring within the band is done randomly or

· based on other factors (EEO or affirmative

· action goals, etc.).

· Banding allows for the consideration of other

· factors in making a final choice, including

· whether an internal candidate is at risk of

· leaving the company if passed up for a

· promotion.

· Band widths are generally calculated on the

· basis of the standard error of measurement.

Banding

Final Choice

· When using cut scores or rank ordering, an

· additional decision needs to be made about

· whether to hire from the top of the list down, or to

· create a pool of finalists from which to make a

· final choice.

· This pool of finalists can then be rank ordered

· based on global or specific assessments, selected

· from randomly, or banded. There is no one best

· method of choosing the candidates to whom to

· extend job offers.

· Whenever possible, the ability of the assessment

· scores to predict job success should be carefully

· evaluated, and cutoff scores should be set high

· enough to ensure that new hires are likely to meet

· or exceed minimum standards of success.

Legal Issues

· The Fair Labor Standards Act: covers working

· hours and the payment of overtime or

· compensatory time off to nonexempt employees.

· If an applicant is not hired because the applicant

· has previously exercised his or her rights under

· the FLSA, a court may conclude that the

· applicant’s rights have been violated.

· The Family and Medical Leave Act (FMLA): entitles

· qualified applicants up to 12 weeks of unpaid

· leave for certain reasons.

· If an applicant is not hired because he or she

· had previously exercised his or her rights under

· the FMLA, a court may conclude that the

· applicant’s rights have been violated. For

· example, a federal appellate court held that an

· employer who failed to hire an applicant

· because she “took a lot of FMLA” violated this

· statute.

Uniform Guidelines on Employee Selection

Procedures

· The UGESP require the elimination of adverse

· impact or its justification through validation

· studies.

· The Guidelines generally state that cut scores

· should be set no higher than necessary to achieve

· acceptable proficiency among those hired.

· The determination of this minimum proficiency

· level is up to the firm.

· Even if an assessment method or battery is

· highly valid, it is not advisable to set a cut score

· that generates adverse impact and that screens

· out minority applicants whose scores are

· consistent with normal expectations of

· acceptable proficiency.

· The UGESP also state that “the way in which

· normal expectations of proficiency within the

· workforce were determined and the way in

· which the cutoff score was determined” should

· be described.

· To deal with adverse impact problems, the UGESP

· also discuss the use of “alternative procedures”

· that cause less adverse impact but that have

· similar validity to the problematic procedure.

Preference for Diversity

During Final Choice

· Affirmative action and diversity programs need to

· be carefully implemented to avoid the potential

· for legal trouble.

· Pursuing diverse hires should not begin during

· the assessment stage of the hiring process.

· If qualified diverse candidates do not become

· part of the applicant pool, no selection system

· can identify them.

· If sourcing and recruiting activities identify and

· attract qualified diverse applicants, then

· applying a valid assessment system that has

· little to no adverse impact should generate

· quality, diverse hires.

· Successfully attracting qualified diverse

· applicants eliminates the need to consider any

· protected characteristic as a “plus factor” in the

· final candidate choice.

Job Offer Strategies

· Particularly for firms with a talent philosophy of

· viewing employees as investors rather than

· assets, the job offer should maximize the

· employee value proposition offered to the finalist.

· Before extending a job offer, or deciding on the

· content of the job offer, it is always a good idea to

· verify the truthfulness of any statements made by

· the applicant that were relied on in assessing the

· candidate or deciding on the offer’s contents

· Grade point average, prior work experience,

· prior salary, etc.

· It is also a good idea to identify a backup hire in

· case your first choice does not take the job.

Compensation Decisions

· Low job offer: below-market rewards package

· Competitive job offer: total rewards package is

· competitive with the market

· High job offer: total rewards package is above the

· market

· Maximum job offer: the company’s best and final

· offer

Employment Contract

· Implicit employment contract: an understanding

· that is not part of a written or verbal contract.

· Because binding contracts for employment or for

· future compensation can be created verbally, great

· care should be taken during discussions with

· prospective new hires.

· To be legally binding and enforceable, any

· contract must consist of an offer outlining the

· terms and conditions of employment (and

· possibly a deadline for accepting the contract) that

· is accepted on the terms offered. Something of

· value (consideration), usually promises of pay in

· exchange for promises for labor, must also be

· exchanged.

· An agent authorized by the receiver can negotiate

· on the finalist’s behalf, and agents authorized by

· the organization such as executive recruiters and

· search consultants can negotiate on behalf of the

· company.

· Offer letter: written letter describing in clear and

· precise terms exactly what the compensation

· structure and terms of employment will be.

Contract Content

· Golden parachutes

· Restrictive covenants that require one party to do,

· or to refrain from doing, certain things

· First rights to their inventions and patents

· Trade secrets

· Nondisclosure agreements

· Noncompete clauses

· Nonsolicitation agreements

· It is a good idea to consult legal counsel before

· preparing any contract forms or statements on

· application forms

· States’ laws differ, so consult employment law

· counsel to determine whether your state’s law

· enforces non-compete covenants and, if so,

· under what circumstances

Trade Secret Litigation

· Trade secrets can be any type of information,

· process, idea, or “know how” that is not generally

· known and gives the possessor an advantage in

· the marketplace.

· Includes a wide range of confidential business

· or proprietary information, such as chemical

· formulas, industrial processes, business

· strategies, and even customer lists.

· Almost all organizations have trade secrets to

· protect.

· Trade secret litigation can take place after an

· employee is hired by a competitor, or during the

· interview process.

· Companies must take reasonable precautions

· including requiring employees to sign

· confidentiality, noncompete, and nondisclosure

· agreements.

· Interviewers must know what information is

· protected, and how to question job candidates.

· Warn candidates at the beginning of an interview

· not to share a previous employer’s proprietary

· information.

Employment Contracts

· Statements on a job application blank (e.g., a

· statement that providing false information is

· grounds for termination), statements in employee

· handbooks, and statements in other documents

· may become interpreted as enforceable contracts.

· For executives they often focus more on

· termination than employment issues

· Mandatory arbitration clauses: require parties to

· use arbitration rather than litigation to resolve

· disputes

Presenting a Job Offer

· In writing via an offer letter

· Verbally, often to facilitate negotiation before

· finalizing the terms in a formal offer letter

· Showing your company as a unique or exciting

· place to work can help close the deal

· Emphasizing the selling points of the job itself and

· the career development opportunities that exist,

· as well as selling the company’s image and brand,

· can increase the appeal of the opportunity to the

· candidate

· The job rewards analysis should help identify

· some of a job’s most attractive features

· Should reinforce the company image and the

· positive impression formed by the candidate

· during the hiring process

· While the candidate is considering the offer, it is a

· good idea to stay in contact with him or her to

· reinforce your enthusiasm

Negotiable Job Offer Elements

Salary Negotiating Zone

Job Offer Negotiation Tips

· Do not look at a negotiation as an either/or

· proposition

· Identify what you can and cannot part with and be

· realistic

· Try to identify and use sources of leverage, or

· anything that can help or hinder a party in the

· bargaining situation (e.g., the employer wants you

· to start immediately or to work in a certain

· location)

· Suppress your emotions

· Know your BATNA

· Take time to evaluate the offer

· Be realistic

· Practice your negotiation skills

· Document and be prepared to discuss your skills

· and accomplishments

· Be appreciative and respectful; remember that

· employment is an ongoing relationship

Negotiating

· “Human Resources: How to

· Negotiate Salary During Job

· Offer" (2:51)

· “Negotiating a Raise: Advice from a

· Pro” (5:20)

Closing the Deal

· For job offer acceptances:

· Ensure that the finalist followed the proper

· procedures, accepted the job offer as written,

· and responded before the deadline.

· Congratulate the new hire and express your

· enthusiasm about having him or her onboard.

· It can also be helpful to ask what persuaded

· the person to say yes, and what he or she

· thought of each company contact and the

· hiring process.

· To begin the new hire’s transition into the

· company, stay in contact with the new hire and

· encourage his or her supervisor and coworkers

· to do the same.

· Once a job offer has been accepted, the

· recruiter’s role is to begin building the new

· hire’s commitment to the company and

· enhancing his or her ability to succeed on the

· job.

· Form I-9 must be completed to verify the new

· hire’s identity and employment eligibility

Renegotiating Contracts

· Often done when job responsibilities change or

· when an outside job offer is received

· If a written or verbal explicit employment contract

· does not exist, an implicit contract can still exist

· so be careful what is discussed with prospective

· new hires and do not make promises not intended

· to be contractually binding

Fairness Perceptions

· Distributive fairness: the perceived fairness of the

· outcomes received

· Because most applicants don’t get a job offer,

· distributive fairness perceptions are often low

· Procedural fairness: the perceived fairness of the

· policies and procedures used to determine the

· hiring outcome

· Interactional fairness: perceptions of the degree of

· respect and the quality of the interpersonal

· treatment received

· Attending to procedural and interactional fairness

· perceptions can increase finalists’ willingness to

· accept job offers and can help reduce the negative

· spillover effects among those applicants turned

· down for the job who perceive low distributive

· fairness

Rejecting a Candidate

· When the company rejects a candidate:

· Do so respectfully.

· Distributive fairness will be perceived as low,

· and to reduce negative spillover effects, efforts

· should be made to enhance the procedural and

· interactional fairness perceptions of rejected

· applicants.

· Negative reactions of rejected internal

· candidates may be reduced by explaining why

· they were not chosen, and what they can do to

· be more competitive for the position in the

· future.

· Development plans can be created to help the

· rejected employees enhance their experience

· and qualifications.

When a Finalist Rejects an Offer

· When a finalist rejects a job offer:

· Try to find out why and whether an enhanced

· offer might be acceptable if the firm is willing to

· negotiate.

· Promptly and respectfully acknowledge the

· rejection.

· Be sure to keep appropriate records of all

· applicants for EEO/AA computations, such as

· applicant flow.

· If a rejected applicant is qualified for a different

· position or if they might be hirable in the future

· for the job to which he or she applied,

· requesting permission to retain the applicant’s

· information for a period of time can help to

· build a talent pipeline and facilitate the future

· sourcing and recruiting of pre-qualified

· applicants.

Reneging

· Reneging is backing out of a contract after it is

· accepted.

· Job seekers should never accept an offer unless

· willing to commit

· Employers should never pressure candidates to

· renege on other employers

· If an employer must renege on a job offer or new

· hire, perhaps because business conditions have

· changed, the individual often receives

· compensation for breaking the contract

· Honesty and respect can reduce subsequent

· feelings of unfairness and inequity and maintain

· the individuals’ willingness to work for the firm

· in the future

Legal Recourse After Reneging

· Promissory estoppel: legal doctrine that supports

· a harmed party in enforcing promises that were

· made; the most likely claim for damages a

· reneged candidate is likely to make

· Misrepresentation if the employer knew about the

· reason for the offer withdrawal before the

· withdrawal was made (e.g., corporate

· restructuring)

· Discrimination

· Breach of contract

Most Common Ethical Issues

· Often concern:

· What information is communicated to the

· candidate

· How the job offer is constructed

· What is the right thing to do if circumstances

· change and an extended offer needs to be

· retracted

Analytics

· The most important metrics at this stage include:

· Time to fill: days a job goes unfilled

· Offer acceptance rate

· First offer acceptance rate

· Quality of hire

· Cost per hire

· Diversity of new hires

Technology

· The final hiring decision is one area in which

· technology is unlikely to outperform human

· judgment and human interaction

· Hiring managers usually make the final hiring

· decision

· Technology can help in collecting the data needed

· to validate the assessment procedures and

· automate the application of the statistical tools

· used to optimize the weights assigned to the

· different assessments used to make hiring

· decisions

· Applicant tracking systems and HRIS

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