Career Development Plan Part I - Job Analysis and Selection

1. In what ways do business strategy and organizational culture affect staffing decisions?

2. What screening and selection methods are available, and which ones are most accurate?

3. What should be done to improve pre-employment interviews?

4. Can work-sample tests improve staffing decisions?

5. What are some advantages and potential problems to consider in using assessment centers to select managers?

Is there a common denominator among the most admired companies? According to one study, the answer is yes. It's organizational culture—shared values, expectations, and behavior—that set the context of everything a company does. In the most admired companies, such as General Electric, Johnson & Johnson, Starbucks, Intel, FedEx, Toyota, and Southwest Airlines, the key priorities were teamwork, customer focus, fair treatment of employees, initiative, and innovation. In average companies, the top priorities were minimizing risk, respecting the chain of command, supporting the boss, and making budget. In addition, the most admired companies all have consensus at the top regarding cultural priorities. Rather than giving culture a few lines in the company handbook, the most admired companies live their cultures every day, and they go out of their way to communicate it both to current employees as well as to prospective new hires. Thus Intel works hard to retain the egalitarianism and cooperative spirit among employees that it started with. In practice that means that there are no reserved parking places, no executive dining rooms, no corner offices—and everyone gets stock options.

By contrast it is all too common for average companies to say they value teamwork but then to award bonuses only on the basis of individual achievement. According to the Hay Group, the Philadelphia-based management consulting firm that conducted the study, the single best predictor of overall excellence was a company's ability to attract, retain, and motivate talented people. Organizational culture can either facilitate those activities or else inhibit them. It is a key to “fit” between employees and their organizations. New hires consider it in their decisions to accept or not to accept jobs. Not surprisingly, therefore, more and more companies are taking stock of what they stand for, what they are trying to achieve, and how they operate every day to achieve their goals. In the conclusion to this case, we will see what some of these companies are doing in this area.

Challenges

1. What can a company do to communicate its culture to prospective new hires?

2. What might be the role of organizational culture in staffing decisions?

3. How might organizational culture affect the ways that employees deal with coworkers and customers?

Clearly, there should be a fit between the intended strategy of an enterprise and the characteristics of the people who are expected to implement it. Unfortunately, very few firms actually link strategy and staffing decisions in a structured, logical way. Nevertheless, we can learn how to effect such a fit by considering a two-dimensional model that relates an organization's strategy during the stages of its development to the style of its managers during each stage.1

For strategic reasons, it is important to consider the stage of development of a business because many characteristics of a business—such as its growth rate, product lines, market share, entry opportunity, and technology—change as the organization changes. One possible set of relationships between the development stage and the management selection strategies is shown in Figure 7-1. While a model such as this is useful conceptually, in practice the stages might not be so clearly defined, and there are many exceptions.

Organizations that are just starting out are in the embryonic stage. They are characterized by high growth rates, basic product lines, heavy emphasis on product engineering, and little or no customer loyalty.

Mature organizations emphasize the maintenance of market share, cost reductions through economies of scale, more rigid management controls over workers' actions, and the generation of cash to develop new product lines. In contrast to the “freewheeling” style of an embryonic organization, there is much less flexibility and variability in a mature organization.

Finally, an aging organization struggles to hold market share in a declining market, and it demands extreme cost control obtained through consistency and centralized procedures. Economic survival becomes the primary motivation.

Different management styles seem to fit each of these development stages best. In the embryonic stage there is a need for enterprising managers who can thrive in high-risk environments. These are known as entrepreneurs (Figure 7-1). They are decisive individuals who can respond rapidly to changing conditions.

During the high-growth stage there is still a need for entrepreneurs, but it is also important to select the kinds of managers who can develop stable management systems to preserve the gains achieved during the embryonic stage. We might call these managers “growth directors.”

As an organization matures, there is a need to select the kind of manager who does not need lots of variety in her or his work, who can oversee repetitive daily operations, and who can search continually for economies of scale. Individuals who fit best into mature organizations have a “bureaucratic” style of management.

Finally, an aging organization needs “movers and shakers” to invigorate it. Strategically, it becomes important to select (again) entrepreneurs capable of doing whatever is necessary to ensure the economic survival of the firm. This may involve divesting unprofitable operations, firing unproductive workers, or eliminating practices that are considered extravagant.

Admittedly, these characterizations are coarse, but they provide a starting point in the construction of an important link between the development stage of an organization and its staffing strategy. Such strategic concerns may be used to supplement job analyses as bases for staffing. This also suggests that job descriptions, which standardize and formalize behavior, should be broadened into role descriptions that reflect the broader and more changeable strategic requirements of an organization.

A logical extension of the mating theory of recruitment (i.e., concurrent search efforts for a match by organizations and individuals) is the mating theory of selection. That is, just as organizations choose people, people choose jobs and organizations that fit their personalities and career objectives and in which they can satisfy needs that are important to them.2

1. Formal statements of organizational philosophy and materials used for recruitment, selection, and socialization of new employees.

2. Promotion criteria.

3. Stories, legends, and myths about key people and events.

4. What leaders pay attention to, measure, and control.

5. Implicit and possibly unconscious criteria that leaders use to determine who fits key slots in the organization.

Organizational culture has two implications for staffing decisions. First, cultures vary across organizations; individuals will consider this information if it is available to them in their job search process.5 Companies such as IBM and Procter & Gamble have a strong marketing orientation, and their staffing decisions tend to reflect this value. Other companies, such as Sun Microsystems and Hewlett-Packard, are oriented toward research and development and engineering, while still others, such as McDonald's, concentrate on consistency and efficiency. Recruiters assess person/job fit by focusing on specific knowledge, skills, and abilities. They assess person/organization fit by focusing more on values and personality characteristics.6 By linking staffing decisions to cultural factors, companies try to ensure that their employees have internalized the strategic intent and core values of the enterprise. In this way they will be more likely to act in the interest of the company and as dedicated team members, regardless of their formal job duties.7

Second, other things being equal, individuals who choose jobs and organizations that are consistent with their own values, beliefs, and attitudes are more likely to be productive, satisfied employees. This was demonstrated in a study of 904 college graduates hired by six public accounting firms over a seven-year period. Those hired by firms that emphasized interpersonal relationship values (team orientation, respect for people) stayed an average of 45 months. Those hired by firms that emphasized work-task values (detail, stability, innovation) stayed with their firms an average of 31 months. This 14-month difference in survival rates translated into an opportunity loss of at least $6 million for each firm that emphasized work-task values.

While the firms that emphasized interpersonal relationship values were uniformly more attractive to both strong and weak performers, strong performers stayed an average of 13 months longer in firms that emphasized work-task values (39 months versus 26 months for weak performers). The lesson for managers? Promote cultural values that are attractive to most new employees; don't just select individuals who fit a specific profile of cultural values.8

Because practical considerations (safety, time, cost) make job tryouts for all candidates infeasible in most selection situations, it is necessary to predict the relative level of job performance of each candidate on the basis of available information. As we shall see, some methods for doing this are more accurate than others. However, before considering them, we need to focus on the fundamental technical requirements of all such methods—reliability and validity.

The goal of any selection program is to identify applicants who score high on measures that purport to assess knowledge, skills, abilities, or other characteristics that are critical for job performance. Yet we always run the risk of making errors in employee selection decisions. Selection errors are of two types: selecting someone who should be rejected (erroneous acceptance) and rejecting someone who should be accepted (erroneous rejection). These kinds of errors can be avoided by using measurement procedures that are reliable and valid.

A measurement is considered to be reliable if it is consistent or stable, for example,

· Over time—such as on a hearing test administered first on Monday morning and then again on Friday night.

· Across different samples of items—say, on form A and form B of a test of mathematical aptitude, or on a measure of vocational interests administered at the beginning of a student's sophomore year in college and then again at the end of her or his senior year.

· Across different raters or judges working independently—as in a gymnastics competition.

As you might suspect, inconsistency is present to some degree in all measurement situations. In employment settings, people generally are assessed only once. That is, organizations give them, for example, one test of their knowledge of a job or one application form or one interview. The procedures through which these assessments are made must be standardized in terms of content, administration, and scoring. Only then can the results of the assessments be compared meaningfully with one another. Those who desire more specific information about how reliability is actually estimated in quantitative terms should consult the technical appendix at the end of this chapter.

Although evidence of validity may be accumulated in many ways, validity always refers to the degree to which the evidence supports inferences that are drawn from scores or ratings on a selection procedure. It is the inferences regarding the specific use of a selection procedure that are validated, not the procedure itself.11 Hence a user must first specify exactly why he or she intends to use a particular selection procedure (i.e., what inferences he or she intends to draw from it). Then the user can make an informed judgment about the adequacy of the available evidence of validity in support of that particular selection procedure when used for a particular purpose.

Scientific standards for validation are described in greater detail in Principles for the Validation and Use of Personnel Selection Procedures12 and Standards for Educational and Psychological Testing.13 Legal standards for validation are contained in the Uniform Guidelines on Employee Selection Procedures.14 For those who desire an overview of the various strategies used to validate employee selection procedures, see the technical appendix at the end of the chapter.

Quantitative evidence of validity is often expressed in terms of a correlation coefficient (that may assume values between-1 and +1) between scores on a predictor of later job performance (e.g., a test or an interview) and a criterion that reflects actual job performance (e.g., supervisory ratings, dollar volume of sales). In employment contexts, predictor validities typically vary between about 0.20 and 0.50. In the following sections we will consider some of the most commonly used methods for screening and selection decisions, together with validity evidence for each one.

Particularly when unemployment is high, organizations find themselves deluged with applications for employment for only a small number of available jobs. Many large companies receive more than 1 million applications per year, especially those with solid reputations and strong company cultures. Of course when applications are submitted electronically, it is possible to screen them for obvious mismatches by considering answers to questions such as “Are you willing to move?” and “When are you prepared to start work?” As we noted in Chapter 6, hiring management systems using advanced software can help screen candidates on items such as background and experience, thereby streamlining the selection process considerably.

· Any question that might lead to an adverse impact on the employment of members of groups protected under civil rights law.

· Any question that cannot be demonstrated to be job related or that does not concern a bona fide occupational qualification.

· Any question that could possibly constitute an invasion of privacy.

ETHICAL DILEMMA Are Work History Omissions Unethical?

Consider the following situation. A job applicant knowingly omits some previous work history on a company's application form, even though the form asks applicants to provide a complete list of previous jobs. However, the applicant is truthful about the dates of previous jobs he does report. He leaves it to the interviewer to discover and ask about the gaps in his work history. The interviewer fails to ask about the gaps. Is the job applicant's behavior unethical?

Some organizations have sought to identify statistically significant relationships between responses to questions on application forms and later measures of job performance (e.g., tenure, absenteeism, theft). Such weighted application blanks (WABs) are often highly predictive, yielding validities in the range of 0.25 to 0.50.16 In one study, for example, researchers examined 28 objective questions for a random sample of the employment applications representing 243 current and former circulation-route managers at a metropolitan daily newspaper.17 A statistical procedure (multiple regression analysis) was used to identify which people were most likely to stay on the job for more than one year (the break-even point for employee orientation and training costs). Several interesting findings resulted from the study:

1. Questions on the WAB that best predicted time on the job at the beginning of the study did not predict time on the job several years later. Hence, it is necessary to recheck WAB questions periodically.

2. The statistical analysis showed that items that “conventional wisdom” might suggest or those used by interviewers did not predict employee turnover accurately.

4. The length of the time employees stayed on previous jobs was unrelated to their length of stay on their current job.

5. The best predictors were “experience as a sales representative,” “business school education,” and “never previously worked for this company.”

VIDEO RÉSUMÉS?

Recommendations and reference checks are commonly used to screen outside job applicants. They can provide four kinds of information about a job applicant: (1) education and employment history, (2) character and interpersonal competence, (3) ability to perform the job, and (4) the willingness of the past or current employer to rehire the applicant.

A recommendation or reference check will be meaningful, however, only if the person providing it (1) has had an adequate opportunity to observe the applicant in job-relevant situations, (2) is competent to evaluate the applicant's job performance, (3) can express such an evaluation in a way that is meaningful to the prospective employer, and (4) is completely candid.20

Research suggests that if letters of recommendation are to be meaningful, they should contain the following information:21

1. Degree of writer familiarity with the candidate. That is, time known, and time observed per week.

2. Degree of writer familiarity with the job in question. To help the writer make this judgment, the reader should supply to the writer a description of the job in question.

3. Specific examples of performance. That is, goals, task difficulty, work environment, and extent of cooperation from co-workers.

4. Individuals or groups to whom the candidate is compared.

When seeking information about a candidate from references, consider the following guidelines:22

· Request job-related information only; put it in written form to prove that your hire or no-hire decision was based on relevant information.

· The Fair Credit Reporting Act requires third-party investigators to secure the applicant's written consent prior to doing a background check. If a decision not to hire an applicant results from negative information found through a background check, an employer is obligated to provide the applicant with the results and an opportunity to dispute them.

· Stay away from subjective areas, such as the candidate's personality.

· Evaluate the credibility of the source of the reference material. Under most circumstances, an evaluation by a past immediate supervisor will be more credible than an evaluation by an HR representative.

· Wherever possible, use public records to evaluate on-the-job behavior or personal conduct (e.g., records regarding criminal and civil litigation, driving, or bankruptcy).23

What should you do if you are asked to provide reference information? Here are some useful guidelines:

· Obtain written consent from the employee prior to providing reference data. Fully 89 percent of respondents do this now.24

· Do not blacklist former employees.

· Keep a written record of all released information.

· Make no subjective statements, such as “He's got a bad attitude.” Be specific, such as “He was formally disciplined three times last year for fighting at work.”

· If you are contacted by phone, use a telephone “call back” procedure to verify information provided on a job application by a former employee. Ask the caller to give her or his name, title, company name, and the nature and purpose of the request. Next, obtain the written consent of the employee to release the information. Finally, call back the company by phone. Do not volunteer any information; confirm only whether or not the information the caller already has is correct.

· Release only the following general types of information (subject to written consent of the employee): dates of employment, job titles during employment and time in each position, promotions, demotions, attendance record, salary, and reason for termination (no details, just the reason).

Sweetening of résumés and previous work history is common. How common? One study of 2.6 million résumés found that 44 percent contained exaggerations or outright fabrications about work experience, 23 percent listed bogus credentials, and 41 percent boasted fictional degrees.26 The lesson: Always verify key aspects of previous history.

What is the current status of reference checking in practice? Fully two-thirds of companies now say that it has become harder to check applicants' references. At a cost of between $25 and $100, about 80 percent of big companies in the United States now do such checks, up from 56 percent in 1996. Firms such as Wal-Mart, Citigroup, and IBM now check the backgrounds of all job applicants for criminal records.27

On the other hand, employers can be held liable for negligent hiring if they fail to check closely enough on a prospective employee who then commits a crime in the course of performing his or her job duties. The employer becomes liable if it knew, or should have known, about the applicant's unfitness to perform the job in question.28 When courts receive negligent hiring claims they consider the following: (1) Would the risk have been discovered through a thorough background check? (2) Did the nature of the job cause greater risk? (3) Did the employer have a greater responsibility to conduct a thorough background investigation because of the nature of the job? (4) Was the action intentional?29

Currently, an employer has no legal duty or obligation to provide information to prospective employers. However, if an employer's policy is to disclose reference information, providing false or speculative information could be grounds for a lawsuit.30 Reference checking is not an infringement on privacy when fair reference checking practices are used. It is a sound evaluative tool that can provide objectivity for employers and fairness for job applicants. Figure 7-2 shows some current facts about reference checks.

Source: Reference-checking practices. CCH Inc. Riverwoods, IL, 2004.

Drug screening tests, which began in the military and spread to the sports world, are now becoming more common in employment. Ninety-five percent of Fortune 500 companies now make pre-employment drug testing a regular part of their pre-hire procedures.32 While the number of job applicants and workers that test positive remains consistently about 4.5 percent, the number testing positive for methamphetamine use surged 68 percent in 2003, according to Quest Diagnostics, the largest testing company in the United States.33

Critics charge that such screening may not be cost effective, that it violates an individual's right to privacy, and that frequently the tests are inaccurate.34 Employers counter that the widespread abuse of drugs is reason enough for wider testing.

Is such drug screening legal? The Supreme Court has upheld (1) the constitutionality of the government regulations that require railroad crews involved in accidents to submit to prompt urinalysis and blood tests and (2) urine tests for U.S. Customs Service employees seeking drug enforcement posts. The extent to which such rulings will be limited to safety-sensitive positions has yet to be clarified by the Court. Nevertheless, an employer has a legal right to ensure that employees perform their jobs competently and that no employee endangers the safety of other workers. So if illegal drug use either on or off the job may reduce job performance and endanger co-workers, the employer has adequate legal grounds for conducting drug tests.

To avoid legal challenge, consider instituting the following commonsense procedures:37

1. Inform all employees and job applicants, in writing, of the company's policy regarding drug use.

2. Include the policy, and the possibility of testing, in all employment contracts.

3. Present the program in a medical and safety context. That is, state that drug screening will help improve the health of employees and will also help ensure a safer workplace.

4. Check the testing laboratory's experience, its analytical methods, and the way it protects the security and identity of each sample. Use only federally certified laboratories.

5. If drug testing will be used with employees as well as job applicants, tell employees in advance that it will be a routine part of their employment. Employees who are more sensitive to job-safety issues are more likely to perceive drug screening as fair.38

6. If drug testing is done, it should be uniform—that is, it should apply to managers as well as nonmanagers.

COMPANY EXAMPLE: PERFORMANCE FACTORS INC.39

Assessing Fitness for Work

Performance Factors Inc. (PFI) has designed an innovative, computer-based assessment program to determine an employee's fitness for work. PFI's Factor 1000 software, which tests a worker's hand-eye coordination, could provide an effective alternative to blood tests and urinalysis, which many regard as an invasion of personal privacy. The test, which demands considerable concentration and skill, requires the employee to center a moving object between two posts on the computer screen; employees are able to manipulate the object by turning a small knob while the computer monitors and records their performance. Results of each employee's performance are compared with a companywide baseline average.

One company that uses Factor 1000 is Silicon Valley's Ion Implant Services Inc. Each day before work, delivery drivers line up to stand in front of a computer to play the short video game. But it's not a game. Unless the machine prints a receipt confirming that the drivers have passed the video test, they can't climb behind the wheel.

Handwriting analysis (graphology) is reportedly used as a hiring tool by 85 percent of French companies.40 In Israel, graphology is more widespread than any other personality measurement. Its use is clearly not as widespread in the United States, although sources estimate that more than 3,000 U.S. firms retain handwriting analysts as employment consultants. Such firms generally require job applicants to provide a one-page writing sample. Experts then examine it (at a cost of $60 to $500) for 3 to 10 hours. They assess more than 300 personality traits, including enthusiasm, imagination, and ambition.41 Are the analysts' predictions valid? In one study involving the prediction of sales success, 103 writers supplied two samples of their handwriting—one “neutral” in content, the second autobiographical. The data were then analyzed by 20 professional graphologists to predict supervisors' ratings of each salesperson's job performance, each salesperson's own ratings of his or her job performance, and sales productivity. The results indicated that the type of script sample did not make any difference. There was some evidence of interrater agreement, but there was no evidence for the validity of the graphologists' predictions.42 Similar findings have been reported in other well-controlled studies and in meta-analyses (statistical cumulations) of such studies.43 In short, there is little to recommend the use of handwriting analysis as a predictor of job performance.

Advocates claim that polygraph (literally, “many pens”) examinations are accurate in more than 90 percent of criminal and employment cases if interpreted by a competent examiner. Critics claim that the tests are accurate only two-thirds of the time and are far more likely to be unreliable for a subject who is telling the truth.44 A recent quantitative analysis of 57 independent studies investigating the accuracy of the polygraph by the National Research Council concluded the following:45

· Polygraph accuracy for screening purposes is almost certainly lower than what can be achieved by specific-incident polygraph tests.

· The physiological indicators measured by the polygraph can be altered by conscious efforts through cognitive or physical means.

· Using the polygraph for security screening yields an unacceptable choice between too many loyal employees falsely judged deceptive and too many major security threats left undetected.

Shrinkage—an industry term for losses due to bookkeeping errors and employee, customer, and vendor theft—is estimated to make up almost 2 percent of annual sales.47 Employee theft alone is estimated to cause up to 30 percent of all business failures.48 In 2000 the average value of goods taken per shoplifting incident was $128, and it was $1,023 per incident of employee theft. In the aggregate, the cost of theft to the nation's retailers was $29 billion.49 With statistics like these, it should come as no surprise that written integrity tests are being used by an estimated 25 percent of employers.50 They are of two types.51 Overt integrity tests (clear purpose tests) are designed to assess directly attitudes toward dishonest behaviors. The second type, personality-based measures (disguised purpose tests) aim to predict a broad range of counterproductive behaviors at work (disciplinary problems, violence on the job, excessive absenteeism, and drug abuse, in addition to theft).

Do they work? Yes—as a meta-analysis (a statistical cumulation of research results across studies) of 665 validity coefficients that used 576,460 test takers demonstrated. The average validity of the tests, when used to predict supervisory ratings of performance, was 0.41. The results for overt integrity and personality-based tests were similar. However, the average validity of overt tests for predicting theft per se was much lower, 0.13. For personality-based tests, there were no validity estimates available for the prediction of theft alone. Thus, theft appears to be less predictable than broadly counterproductive behaviors, at least by overt integrity tests.52 The validity of integrity tests for predicting drug and alcohol abuse per se is about 0.30.53 Finally, since there is no correlation between race and integrity test scores, such tests might well be used in combination with general mental ability test scores to comprise a broader selection procedure.54

Despite these encouraging findings, a least three key issues have yet to be resolved:55 (1) There are almost no data regarding the types of classification errors made by these measures; (2) while fakeability or impression management has been observed on honesty tests,56 many such tests do not contain lie scales to detect response distortion; and (3) many writers in the field apply the same language and logic to integrity testing as to ability testing. Yet there is an important difference: While it is possible for an individual with poor moral behavior to “go straight,” it is certainly less likely that an individual who has demonstrated a lack of intelligence will “go smart.” If they are honest about their past, therefore, reformed individuals with a criminal past may be “locked into” low scores on integrity tests (and therefore be subject to classification error). Thus, the broad validation evidence that is often acceptable for cognitive ability tests may not hold up in the public policy domain for integrity tests.

(Source: 2001 AMA Survey on workplace testing, American Management Association, New York, 2001, p. 2.)

*Validity is based on cumulative findings that have been summarized using meta-analysis. Validity is expressed as a correlation coefficient that varies from-1 to +1.

Source: Adapted from Schmidt, F. L., & Hunter, J. E. (1998). The validity and utility of selection methods in personnel psychology: Practical and theoretical implications of 85 years of research findings. Psychological Bulletin, 124, 265.

With respect to the selection of managers, 70 years of research indicate that successful managers are forecast most accurately by tests of their cognitive ability, by their ability to draw conclusions from verbal or numerical information, and by their interests.61 Cognitive ability is particularly effective in forecasting success in jobs with inconsistent tasks and unforeseen changes—as is often the case with managerial jobs.62 Further research has found two other types of mental abilities that are related to successful performance as a manager: fluency with words and spatial relations ability.63

Two decades of research have cast serious doubt on this assumption.64 In fact, it has been shown that the major reason for the variation in validity coefficients across settings is the size of the samples—they were too small. When the effect of sampling error is removed, the validities observed for similar test—job combinations across settings do not differ significantly. In short, the results of a validity study conducted in one situation can be generalized to other situations as long as it can be shown that jobs in the two situations are similar.

Because thousands of studies have been done on the prediction of job performance, validity generalization allows us to use this database to establish definite values for the average validity of most predictors. The average validities for predictors commonly in use are shown in Table 7-1.

At this point you are probably asking yourself about the relationship of the Big Five to integrity tests. Integrity tests have been found to measure mostly conscientiousness but also some components of agreeableness and emotional stability.67 That is why their validities tend to be higher than those of individual Big Five characteristics alone.

The Issue of Faking.

Can't applicants distort their responses in ways they believe will make a positive impression on the employer? The answer is yes.68 While moderate distortion may reduce predictive-related validities slightly, compared with validities obtained with job incumbents,69 response distortion can have a dramatic effect on who is hired, even though it has no detectable effect on predictive validity.70 On top of that, coaching can improve scores.71 To control the effects of faking, one strategy is to perform statistical corrections, but there is disagreement among experts about the best approach for doing that.72 A more practical strategy is to warn job applicants in advance that distortion can and will be detected, that verification procedures exist, and that there will be a consequence for such distortion. Possible consequences might vary from elimination from the selection process to verification in a background check or oral interview. A review of eight studies that investigated the effects of such warnings found that in all eight warnings reduced the amount of intentional distortion in self-report instruments, relative to situations where no such warnings were given.73

Sample projective stimulus. Candidates are told to look at the picture briefly and then to write the story it suggests. Stories are scored in terms of the key themes expressed.

Basically, the difference between an objective and a projective test is this: In an objective test, the test taker tries to guess what the examiner is thinking; in a projective test, the examiner tries to guess what the test taker is thinking.74

Although early research showed projective measures not to be accurate predictors of management success,75 they can provide useful results when the examinee's responses are related to motivation to manage (e.g., achievement motivation, willingness to accept a leadership role).76 Moreover, measures of intelligence are unrelated to scores on projective tests. So a combination of both types of instruments can provide a fuller picture of individual “can-do” (intelligence) and “will-do” (motivational) factors than can either one used alone.

At first glance, we might suspect that measures of leadership ability are highly predictive of managerial success since they appear to tap a critical management job requirement directly. Scales designed to measure two key aspects of leadership behavior, consideration and initiating structure, have been developed and used in many situations. Consideration reflects management actions oriented toward developing mutual trust, respect for subordinates' ideas, and consideration of their feelings. Initiating structure, on the other hand, reflects the extent to which an individual defines and structures her or his role and those of her or his subordinates toward accomplishing tasks.

Based on the assumption that one of the best predictors of what a person will do in the future is what he or she has done in the past, biographical information has been used widely and successfully as one basis for staffing decisions. Table 7-1 shows its average validity to be a very respectable 0.35. As with any other method, careful, competent research is necessary if “biodata” are to prove genuinely useful as predictors of job success.78 For example, items that are more objective and verifiable are less likely to be faked,79 although faking can be reduced by asking applicants to describe incidents to illustrate and support their answers.80 The payoff is that biodata can add significant explanatory power over and above Big Five personality dimensions and also general mental ability.81 Here is another example of this kind of effort.

Many professionals resist taking pre-employment tests, arguing “My record speaks for itself.” The accomplishment record inventory, a biodata instrument, lets those records speak systematically.82 Job candidates describe their accomplishments, in writing, in each job dimension that job analysis shows to be essential (e.g., for attorneys, technical knowledge, research/investigating, assertive advocacy). Raters then use scales developed (by incumbents) for each dimension to evaluate the accomplishments. Research with five types of jobs (attorneys, librarians, economists, research analysts, and supervisors) yielded validities ranging from 0.22 to 0.45 and no adverse impact against protected groups.83 The approach is legally defensible, results oriented, and highly job related, and it elicits unique, job-relevant information from each person. Not surprisingly, therefore, it is getting lots of attention.

1. Base interview questions on a job analysis.

2. Ask the same general questions of each candidate. That is, use a structured interview.

3. Use detailed rating scales, with behavioral descriptions to illustrate scale points.

4. Take detailed notes that focus on behavioral information about candidates.90

5. Use multiple interviewers.

6. Provide extensive training on interviewing.

7. Do not discuss candidates or answers between interviews.

8. Use statistical weights for each dimension, as well as an overall judgment of suitability, to combine information.91

The validity of the pre-employment interview will be reduced to the extent that interviewers' decisions are overly influenced by such factors as first impressions, personal feelings about the kinds of characteristics that lead to success on the job, and contrast effects, among other nonobjective factors. Contrast effects describe a tendency among interviewers to evaluate a current candidate's interview performance relative to those that immediately preceded it. If a first candidate received a very positive evaluation and a second candidate is just “average,” interviewers tend to evaluate the second candidate more negatively than is deserved. The second candidate's performance is “contrasted” with that of the first.

Employers are likely to achieve nonbiased hiring decisions if they concentrate on shaping interviewer behavior.92 One way to do that is to establish a specific system for conducting the employment interview. Building on the suggestions made earlier, here are some things to consider in setting up such a system:93

· To know what to look for in applicants, focus only on the competencies necessary for the job. Be sure to distinguish between entry-level and full-performance competencies.94

· Screen résumés and application forms by focusing on (1) key words that match job requirements, (2) quantifiers and qualifiers that show whether applicants have these requirements, and (3) skills that might transfer from previous jobs to the new job.

· Develop interview questions that are strictly based on the job analysis results; use open-ended questions (those that cannot be answered with a simple yes or no response); and use questions relevant to the individual's ability to perform, motivation to do a good job, and overall “fit” with the firm.

· Conduct the interview in a relaxed physical setting. Begin by putting the applicant at ease with simple questions and general information about the organization and the position being filled. Throughout, note all nonverbal cues, such as lack of eye contact and facial expressions, as possible indicators of the candidate's interest in and ability to do the job.

· To evaluate applicants, develop a form containing a list of competencies weighted for overall importance to the job, and evaluate each applicant relative to each competency.

A systematic interview developed along these lines will minimize the uncertainty so inherent in decision making that is based predominantly on “gut feeling.” It also will contribute additional explanatory power over and above cognitive ability and measures of conscientiousness,97 and it will reduce differences in evaluation scores among minorities and nonminorities.98Table 7-2 shows some examples of proper and improper interview questions, along with several examples of situational-type questions.

In the typical peer assessment procedure, raters are asked to predict how well a peer will do if placed in a leadership or managerial role. Such information can be enlightening, because peers evaluate managerial behavior from a different perspective than do managers themselves. Actually, the term peer assessment is a general term denoting three basic methods that members of a well-defined group use in judging each other's performance: Peer nomination requires each group member to designate a certain number of group members as highest or lowest on a performance dimension. Peer rating requires each group member to rate the performance of every group member. Peer ranking requires each group member to rank the performance of all other members from best to worst.

Reviews of more than 50 studies found all three methods of peer assessment to be reliable, valid, and free from bias.99 Peer assessments do predict job advancement.100 However, because implicitly they require people to consider privileged information about their co-workers, it is essential that peers be thoroughly involved in the planning and design of the peer assessment method to be used.

The leaderless group discussion (LGD) is simple and has been used for decades. A group of participants is given a job-related topic and is asked simply to carry on a discussion about it for a period of time. No one is appointed leader, nor is anyone told where to sit. Instead of using a rectangular table (with a “head” at each end), a circular table is often used so that each position carries equal weight. Observers rate the performance of each participant.

For example, IBM uses an LGD in which each participant is required to make a five-minute oral presentation of a candidate for promotion and then subsequently defend her or his candidate in a group discussion with five other participants. All roles are well defined and structured. Seven characteristics are rated, each on a five-point scale of effectiveness: aggressiveness, persuasiveness or selling ability, oral communication, self-confidence, resistance to stress, energy level, and interpersonal contact.105

LGD ratings have forecast managerial performance accurately in virtually all the functional areas of business.106 Previous LGD experience appears to have little effect on present LGD performance, although prior training clearly does.107 Individuals in one study who received a 15-minute briefing on the history, development, rating instruments, and research relative to the LGD were rated significantly higher than untrained individuals. To control for this, all those with prior training in LGD should be put into the same groups.

A situational test designed to simulate important aspects of a position, the inbasket test assesses an individual's ability to work independently. In general, it takes the following form:

It consists of the letters, memoranda, notes of incoming telephone calls, and other materials that have supposedly collected in the in-basket of an administrative officer. The subject who takes the test is given appropriate background information concerning the school, business, military unit, or whatever institution is involved. He is told that he is the new incumbent of the administrative position and that he is to deal with the material in the in-basket. The background information is sufficiently detailed that the subject can reasonably be expected to take action on many of the problems presented by the in-basket documents. The subject is instructed that he is not to play a role, he is not to pretend to be someone else. He is to bring to the new job his own background of knowledge and experience, his own personality, and he is to deal with the problems as though he were really the incumbent of the administrative position. He is not to say what he would do; he is actually to write letters and memoranda, prepare agenda for meetings, make notes and reminders for himself, as though he were actually on the job.108

Some sample in-basket items are shown in Figure 7-4.

Decades of research on the in-basket indicate that it validly forecasts subsequent job behavior and promotion.110 Moreover, because performance on the LGD is not strongly related to performance on the in-basket, in combination they are potentially powerful predictors of managerial success.

Situational judgment tests (SJTs) consist of a series of job-related situations presented in written, verbal, or visual form. In many SJTs, job applicants are asked to choose best and worst options among several choices available. Consider the following item from a SJT used for selecting retail associates:111

A customer asks for a specific brand of merchandise the store doesn't carry. How would you respond to the customer?

1. Tell the customer which stores carry that brand, but point out that your brand is similar.

2. Ask the customer more questions so you can suggest something else.

3. Tell the customer that the store carries the highest quality merchandise available.

4. Ask another associate to help.

5. Tell the customer which stores carry that brand.

Questions for job applicants:

· Which of the options above do you believe is the best under the circumstances?

· Which of the options above do you believe is the worst under the circumstances?

This illustration should remind you of the earlier discussion regarding the situational interview. In fact, situational interviews can be considered a special case of SJTs in which interviewers present the scenarios verbally and job applicants also respond verbally.

The assessment center approach was first used by German military psychologists during World War II to select officers. They felt that paper-and-pencil tests took too narrow a view of human nature; therefore, they chose to observe each candidate's behavior in a complex situation to develop a broader appraisal of his reactions. Borrowing from this work and that of the War Office Selection Board of the British army during the early 1940s, the U.S. Office of Strategic Services used the method to select spies during World War II. Each candidate had to develop a cover story that would hide her or his identity during the assessment. Testing for the ability to maintain cover was crucial, and ingenious situational tests were designed to seduce candidates into breaking cover.116

After World War II, many military psychologists and officers joined private companies, where they started small-scale assessment centers. In 1956, AT&T was the first to use the method as the basis of a large-scale study of managerial progress and career development. As a result of extensive research conducted over 25 years, AT&T found that managerial skills and abilities are best measured by the following procedures:117

1. Administrative skills—performance on the in-basket test.

2. Interpersonal skills—LGD, manufacturing problem.

3. Intellectual ability—paper-and-pencil ability tests.

4. Stability of performance—in-basket, LGD, manufacturing problem.

5. Work-oriented motivation—projective tests, interviews, simulations.

6. Career orientation—projective tests, interviews, personality inventories.

7. Dependency on others—projective tests.

Assessment centers do more than just test people. The assessment center method is a process that evaluates a candidate's potential for management based on three sources: (1) multiple assessment techniques, such as situational tests, tests of mental abilities, and interest inventories; (2) standardized methods of making inferences from such techniques, because assessors are trained to distinguish between effective and ineffective behaviors by the candidates; and (3) pooled judgments from multiple assessors to rate each candidate's behavior. Today assessment centers take many different forms, and they are used in a wide variety of settings and for a variety of purposes. Thousands of organizations in countries around the world are now using the assessment center method, and more are doing so every year. In addition to evaluating and selecting managers, the method is being used to train and upgrade management skills, to encourage creativity among research and engineering professionals, to resolve interpersonal and interdepartmental conflicts, to assist individuals in career planning, to train managers in performance appraisal, and to provide information for workforce planning and organization design.

As a specific example of the flexibility of the assessment center method in using multiple assessment techniques, consider the following six types of exercises used to help select U.S. Army recruiters:118

· Structured interview. Assessors ask a series of questions targeted at the subject's level of achievement motivation, potential for being a “self-starter,” and commitment to the Army.

· Cold calls. The subject has an opportunity to learn a little about three prospects and must phone each of them for the purpose of getting them to come into the office. Assessor role players have well-defined characters (prospects) to portray.

· Interviews. Two of the three cold call prospects agree to come in for an interview. The subject's job is to follow up on what was learned in the cold call conversations and to begin promoting Army enlistment to these people. A third walk-in prospect also appears for an interview with the subject.

· Interview with concerned parent. The subject is asked to prepare for and conduct an interview with the father of one of the prospects that he or she interviewed previously.

· Five-minute speech about the Army. The subject prepares a short talk about an Army career that she or he delivers to the rest of the group and to the assessors.

· In-basket. The subject is given an in-basket filled with notes, phone messages, and letters on which he or she must take some action.

A third feature of the assessment center method is assessor training. Assessors are either line managers two or more levels above the candidates or professional psychologists. They are trained (from two days to several weeks, depending on the complexity of the center) in interviewing techniques, behavior observation, and in developing a common frame of reference with which to assess candidates.119 In addition, assessors usually go through the exercises as participants before rating others.

This experience, plus the development of a consensus by assessors on effective versus ineffective responses by candidates to the situations presented, enables the assessors to standardize their interpretations of each candidate's behavior. Standardization ensures that each candidate will be assessed fairly, that is, in terms of the same “yardstick.”120

Do managers or professional psychologists provide more valid assessments? Cumulative evidence across assessment center studies indicates that professional psychologists who are trained to interpret behaviors in the assessment center relative to the requirements of specific jobs provide more valid assessment center ratings than do managers.121 Assessors seem to first form an overall impression of participants' performance, and these overall impressions then drive more specific dimension ratings.122

These features of the assessment center method—flexibility of form and content, the use of multiple assessment techniques, standardized methods of interpreting behavior, and pooled assessor judgments—account for the successful track record of this approach over the past five decades. It has consistently demonstrated high validity, with correlations between assessment center performance and later job performance as a manager sometimes reaching the 0.50s and 0.60s.123 Assessment center ratings also predict long-term career success (i.e., corrected correlation of 0.39 between such ratings and average salary growth seven years later).124 Both minorities and nonminorities and men and women acknowledge that the method provides them a fair opportunity to demonstrate what they are capable of doing in a management job.125

In terms of its bottom-line impact, two studies have shown that assessment centers are cost effective, even though the per-candidate cost may vary from as little as $50 to more than $2,000. Using the general utility equation (Equation 7-1 in the appendix to this chapter, page 273), both studies have demonstrated that the assessment center method should not be measured against the cost of implementing it, but rather against the cost (in lost sales and declining productivity) of promoting the wrong person into a management job.126 In a first-level management job, the gain in improved job performance as a result of promoting people via the assessment center method is about $4,900 per year (in 2004 dollars). However, if the average tenure of first-level managers is, say, five years, the gain per person is about $25,500 (in 2004 dollars).

Despite its advantages, the method is not without potential problems, including the following:127

· Adoption of the assessment center method without carefully analyzing the need for it and without adequate preparations to use it wisely.

· Blind acceptance of assessment data without considering other information on candidates, such as past and current performance.

· The tendency to rate only general “exercise effectiveness,” rather than performance relative to individual behavioral dimensions (e.g., by using a behavioral checklist), as the number of dimensions exceeds the ability of assessors to evaluate each dimension individually.

· Lack of control over the information generated during assessment; for example, “leaking” assessment ratings to operating managers.

· Failure to evaluate the utility of the program in terms of dollar benefits relative to costs.

· Inadequate feedback to participants.

Each of these problems can be overcome. Doing so will allow even more accurate prediction of each candidate's likely performance as a manager.

Soon after Toyota announced that it would build an auto assembly plant in Kentucky, some 90,000 job applications poured in for the 2,700 production jobs and 300 office jobs available. To narrow the field, Toyota used common tests to an uncommon degree. Even someone applying for the lowest-paying job on the shop floor would go through at least 14 hours of testing, administered on Toyota's behalf by state employment offices and Kentucky State University.

Rigorous testing was also standard procedure for the U.S. auto plants of Mazda Motor Corporation; for a joint venture of Isuzu Motors Ltd. and Fuji Heavy Industries Ltd.; and for Diamond-Star Motors Corporation, a Mitsubishi operation.

Initial tests covered reading and mathematics, manual dexterity, “job fitness,” and, for skilled trades, technical knowledge. “Job fitness” is actually an attitude measure in which applicants are asked whether they agree or disagree with 100 different statements. Here are two examples: “It's important for workers to work past quitting time to get the job done when necessary”; “Management will take advantage of employees whenever possible.”

Next came workplace simulations. Groups of applicants were assigned such problems as ranking the features of a hypothetical auto according to how well the market would accept them. As the job seekers discussed the options, trained assessors recorded their observations and later pooled their findings in order to assess each candidate. Other problems focused on manufacturing and making repairs—though not of autos, since Toyota was interested in aptitude more than experience.

There were also mock production lines, where applicants assembled tubes or circuit boards. The objective was to identify applicants who could keep to a fast pace, endure tedious repetition, and yet stay alert. The tube-assembly procedure was intentionally flawed, and applicants were asked how they would improve it.

Only 1 applicant in 20 made it to an interview, which was conducted by a panel representing various Toyota departments. By then, said an HRM staffer, “We're going to know more about these people than perhaps any company has ever known about people.” The final steps were a physical examination and a drug test.

For all the testing being done by the Japanese auto-makers, some use other methods. Honda, for example, uses few tests at its Marysville, Ohio, plant. Instead it puts every potential hire through three interviews. And Nissan Motor Co., which has been operating in Smyrna, Tennessee, since the early 1980s, prefers to give probable hires at least 40 hours of “pre-employment” training—without pay. The training is intended partly as a final check on whether the company and those in training are really right for each other.128

In this chapter we examined a number of possible predictors that might be used in the staffing process. Determining the right ones to use depends on considerations such as the following:

· The nature of the job.

· The selection ratio, or percentage of applicants selected.

· The cost of the predictor.

To the extent that job performance is multidimensional (as indicated in job analysis results), multiple predictors, each focused on critical competencies, might be used. Other things being equal, use predictors with the highest estimated validities; they will tend to minimize the number of erroneous acceptances and rejections, and they will tend to maximize workforce productivity. Look back at Table 7-1 for a summary of the accumulated validity evidence for a number of potential predictors.

It is important to take into account the selection ratio (the percentage of applicants hired) in evaluating the overall usefulness of any predictor, regardless of its validity. On the one hand, low selection ratios mean that more applicants must be evaluated; on the other hand, low selection ratios also mean that only the “cream” of the applicant crop will be selected. Hence, predictors with lower validity may be used when the selection ratio is low since it is necessary only to distinguish the very best qualified from everyone else.

Finally, the cost of selection is a consideration, but not a major one. Of course, if two predictors are roughly equal in estimated validity, then use the less costly procedure. However, the trade-off between cost and validity should almost always be resolved in favor of validity. Choose the more valid procedure because the major concern is not the cost of the procedure but rather the cost of a mistake if the wrong candidate is selected or promoted. In management jobs, such mistakes are likely to be particularly costly.129

Human Resource Management in Action: Conclusion

There is an old maxim about industry: It's a numbers game and a people business. The fundamental business proposition at Southwest Airlines is that its people come first. As CEO Herb Kelleher commented,

It used to be a business conundrum: Who comes first? The employees, customers, or shareholders? That's never been an issue to me. The employees come first. If they're happy, satisfied, dedicated, and energetic, they'll take real good care of the customers. When the customers are happy, they come back. And that makes the shareholders happy.

Southwest lets its best customers get involved in the pre-employment interviews for flight attendants. The entire process focuses on a positive attitude and teamwork. Peers play active roles in the hiring of peers; for example, pilots hire other pilots, baggage handlers other baggage handlers. In one case, Southwest pilots turned down a top pilot who worked for another major airline and did stunt work for movie studios. Even though he was a great pilot, he made the mistake of being rude to a Southwest receptionist. Teamwork also is critical. If applicants say “I” too much in the interview, they don't get hired. To be sure, Southwest's 28 consecutive years of profitable operations is not all due to the company's culture, but its culture is a major reason outsiders want to join the company and seasoned veterans want to remain.

Meanwhile, at Ford Motor Company, with more than 300,000 employees, CEO Jacques Nasser is trying to change the culture, to remake its basic values in a relatively short time. His objective is to transform an old-economy auto manufacturer into a nimble, Net-savvy, consumer powerhouse. In a bid to shake up the culture, Nasser chose outsiders rather than Ford veterans for powerful management posts. He flattened Ford's bureaucracy, giving more autonomy to regional executives, and shook up senior managers by tying their bonuses to gains in customer service. Gone were the days of automatic promotions and seniority. Employees now have to earn their promotions based on merit.

Not surprisingly, there is a backlash against the pace and intensity of many such initiatives. According to experts, getting the rest of a company to buy into such changes is the hardest challenge. This is why so many efforts to change organizational cultures fail. Blending organizational cultures, such as when companies merge or are acquired, is an even greater challenge. Yet from a staffing perspective, the ability to articulate the culture, to live it every day, and to make it real for applicants and for current employee is a key feature of the decisions of successful applicants to join, and for seasoned veterans to stay and to compete for promotions.

In staffing an organization or an organizational unit, it is important to consider its developmental stage—embryonic, high growth, mature, or aging—in order to align staffing decisions with business strategy. It also is important to communicate an organization's culture, because research shows that applicants will consider this information to choose among jobs if it is available to them. To use selection techniques meaningfully, however, it is necessary to specify the kinds of competencies that are necessary for success.

In the context of managerial selection, numerous techniques are available, but the research literature indicates that the most effective ones have been mental ability tests, personality and interest inventories, peer assessments, personal history data, and situational tests. Projective techniques and leadership ability tests have been less effective. The use of situational tests, such as the leaderless group discussion, the in-basket, and business simulations, lies at the heart of the assessment center method. Key advantages of the method are its high validity, fair evaluation of each candidate's ability, and flexibility of form and content. Other features include the use of multiple assessment techniques, assessor training, and pooled assessor judgments in rating each candidate's behavior.

Recent research indicates, at least for ability tests, that a test that accurately forecasts performance on a particular job in one situation will also forecast performance on the same job in other situations. Hence it may not be necessary to conduct a new validity study each time a predictor is used. Research has also demonstrated that the economic benefits to an organization that uses valid selection procedures may be substantial. In choosing the right predictors for a given situation, pay careful attention to four factors: the nature of the job, the estimated validity of the predictor(s), the selection ratio, and the cost of the predictor(s). Doing so can pay handsome dividends to organizations and employees alike.

IMPACT OF STAFFING DECISIONS ON PRODUCTIVITY, QUALITY OF WORK LIFE, AND THE BOTTOM LINE

Some companies avoid validating their screening and selection procedures because they think validation is too costly—and its benefits too elusive. Alternatively, scare tactics (“validate or else lose in court”) have not encouraged widespread validation efforts either. However, a large body of research has shown that the economic gains in productivity associated with the use of valid selection and promotion procedures far outweigh the cost of those procedures.131 Think about that. If people who score high (low) on selection procedures also do well (poorly) on their jobs, high scores suggest a close “fit” between individual capabilities and organizational needs. Low scores, on the other hand, suggest a poor fit. In both cases, productivity, quality of work life, and the bottom line stand to gain from the use of valid selection procedures. Thus, a study of firms in the service and financial industries reported correlations ranging from 0.71 to 0.86 between the use of progressive staffing practices (e.g., validation studies, use of structured interviews, biodata, and mental ability tests) and measures of organizational performance over a five-year period (annual profit, profit growth, sales growth, and overall performance).132

· reliability

· validity

· weighted application blanks

· negligent hiring

· tests

· inventories

· shrinkage

· integrity tests

· validity generalization

· personality

· neuroticism

· extraversion

· openness to experience

· agreeableness

· conscientiousness

· projective measures

· consideration

· initiating structure

· contrast effects

· peer assessment

· peer nomination

· peer rating

· peer ranking

· work-sample tests

· assessment center method

· selection ratio

IMPLICATIONS FOR MANAGEMENT PRACTICE

The research evidence is clear: Valid selection procedures can produce substantial economic gains for organizations. The implication for policy makers also is clear:

· Select the highest caliber managers and lower-level employees, for they are most likely to profit from development programs.

· Do not assume that a large investment in training can transform marginally competent performers into innovative, motivated top performers.

· A wide variety of screening and selection procedures are available. It is your responsibility to ask “tough” questions of vendors and HR specialists about the reliability, job relatedness, and validity of each one proposed for use.

· Recognize that no one predictor is perfectly valid, and therefore that some mistakes in selection (erroneous acceptances or erroneous rejections) are inevitable. By consciously selecting managers and lower-level employees based on their “fit” with demonstrated job requirements, the strategic direction of a business, and organizational culture, you will minimize mistakes and make optimum choices.

Various kinds of work samples or situational tests can be used to assess what a candidate can do. In this exercise, you will have an opportunity to see how two of the most valid managerial work samples—in-baskets and leaderless group discussions (LGDs)—operate. An attractive feature of this combination of predictors is that while both are valid, the scores on each do not correlate highly with each other. This suggests that inbaskets and LGDs tap a different, but important, subset of the managerial performance domain.

An in-basket exercise is designed to assess a candidate's problem-solving, decisionmaking, and administrative skills. Further, because all responses are written ones, the exercise can also assess written communication ability.

An in-basket consists of a set of letters, notes, memos, and telephone messages to which a candidate must respond. To give you a sense of how an in-basket operates, a sample set of such stimuli is provided here. The set is similar to the one in the text, except that for ease of administration, all items are stated in memorandum form.

You are to assume that you have just been appointed director of human resources at Ace Manufacturing Company and that your name is George Ryan. The president of the firm is Arnold (“Arnie”) Ace. You were to replace the current HR director, John Armstrong, in two weeks, when he was scheduled to be transferred to Hong Kong. However, a family emergency in South Africa has required that John leave the country immediately, and you must fill in for him as best as you can. You have taken an alternate flight on an important business trip to Washington, D.C., and have stopped over in Lompoc, where Ace's headquarters is located. It is Saturday morning, and no one else is available in the office. You must resume your flight to Washington, D.C., within an hour.

Read through the items in your in-basket, decide what to do with each item, and record your decision on a separate sheet of paper. If any decisions require writing a letter or memo, you are to draft the response in the space provided. You are not to role-play how you think someone else might behave in this situation. Rather, you are to behave exactly as you yourself would in each situation.

On a separate sheet of paper, provide your responses to the in-basket items.

Item 1: Speaking engagement next week.

Item 2: Tom Tipster's employment status.

Item 3: EEO report.

Item 4: Time off.

Item 5: Thefts.

Item 6: Thursday's training program.

Item 7: New training program.

Unlike the in-basket exercise, a leaderless group discussion exercise involves groups of managerial candidates working together on a job-related problem. The problem is usually designed to be as realistic as possible, and it is often tackled in groups of five or six candidates. No one in the group is appointed leader, nor is anyone told where to sit or how to act. Candidates are instructed simply to solve the problem to the best of their ability in the time allotted.

The LGD is used to assess such managerial traits and skills as aggressiveness, interpersonal skills, persuasive ability, oral communication skills, self-confidence, energy level, and resistance to stress.

Your organization has recently instituted an incentive bonus in an attempt to stimulate and reward key employee behaviors. The company has budgeted $75,000 for this purpose, to be spent every six months. You have been appointed to a committee charged with the responsibility of determining the allocation of bonus funds to deserving employees over the previous six-month period. A total of 25 employees were recommended by their supervisors. Decisions have already been made on 20 of them, and $60,000 of the original sum has been expended. Your task today is to decide on the size of the bonuses (if any) to be received by the remaining five employees. Summaries of the qualifications for the five employees are presented below:

Head custodian. 15 years with the firm. High school diploma. 22 years of relevant job experience. Manages a flawless custodial staff with low turnover and few union grievances. Present salary below average in most recent salary survey. Supports a family of six. Overlooked for salary increase last year.

Accounting clerk. 3 years with the firm. 2-year college degree. 3 years of relevant work experience. Performs well under pressure of deadlines. Present salary is average in recent salary survey. Is known to be looking for other jobs.

Manager of corporate data analysis. 7 years with the firm. Master's degree in computer science. 14 years of relevant work experience. Has developed the data analysis department into one of the most efficient in the company. Present salary is above average in recent salary survey. Has leadership potential and may be offered jobs from other firms. Difficult to replace good data processing personnel.

Machinist. 11 years with the firm. High school diploma. 11 years relevant job experience. Is the top performer in the milling machine department and exhibits a positive company attitude. Present salary is average in a recent salary survey. Is single and seems to have all the money he needs to support his chosen lifestyle.

Human resources staff. 1 year with the firm. College degree from prestigious Ivy League school. 3 years of relevant work experience. Very knowledgeable in subject matter but has trouble getting along with older co-workers. Present salary is above average in a recent salary survey. His mentor is the firm's vice president for human resources, who is said to be grooming Harvey for the VP position. Has received several offers from other firms recently.

Finally, in situations where it is not practical to use any of the preceding procedures and where a test can be administered only once, use a procedure known as split-half reliability. With this procedure, split a test statistically into two halves (e.g., odd items and even items) after it has been given, thereby generating two scores for each individual. In effect, therefore, two sets of scores (so-called parallel forms) are created from the same test for each individual. Then correlate scores on the two “half tests.” However, since reliability increases as we sample larger and larger portions of a particular area of knowledge, skill, or ability, and since we have cut the length of the original test in half, the correlation between the two half tests underestimates the true reliability of the total test. Fortunately, formulas are available to correct such underestimates.

Although a number of procedures are available for evaluating evidence of validity, three of the best-known strategies are construct oriented, content oriented, and criterion related. The three differ in terms of the conclusions and inferences that may be drawn, but they are interrelated logically and also in terms of the operations used to measure them.

Evaluation of construct-oriented evidence of validity begins by formulating hypotheses about the characteristics of those with high scores on a particular measurement procedure, in contrast to those with low scores. For example, we might hypothesize that sales managers will score significantly higher on the managerial interests scale of the California Psychological Inventory (CPI) than will pharmacy students (in fact, they do) and that they will also be more decisive and apt to take risks as well. The hypotheses form a tentative theory about the nature of the psychological construct, or trait, that the CPI is believed to be measuring. These hypotheses may then be used to predict how people at different score levels on the CPI will behave on other tests or in other situations during their careers. Construct validation is not accomplished in a single study. It requires that evidence be accumulated from different sources to determine the meaning of the test scores in terms of how people actually behave. It is a logical as well as an empirical process.

The term criterion-related evidence of validity calls attention to the fact that the chief concern is with the relationship between predictor [the selection procedure(s) used] and criterion (job performance) scores, not with predictor scores per se. Indeed, the content of the predictor measure is relatively unimportant, because it serves only as a vehicle to predict actual job performance.

There are two strategies of criterion-related validation: concurrent and predictive. A concurrent strategy is used to measure job incumbents. Job performance (criterion) measures for this group are already available, so immediately after administering a selection measure to this group, it is possible to compute a correlation coefficient between predictor scores and criterion scores (over all individuals in the group). A procedure identical to that shown in Table 7-3 is used. If the selection measure is valid, those employees with the highest (or lowest) job performance scores should also score highest (or lowest) on the selection measure. In short, if the selection measure is valid, there should exist a systematic relationship between scores on that measure and job performance. The higher the test score, the better the job performance (and vice versa).

When a predictive strategy is used, the procedure is identical, except that we measure job candidates. We use the same methods that currently are used to select employees and simply add the new selection procedure to the overall process. However, we select candidates without using the results of the new procedure. At a later date (e.g., six months to a year), when it becomes possible to develop a meaningful measure of job performance for each new hire, scores on the new selection procedure are correlated with job performance scores. We then assess the strength of the predictor—criterion relationship in terms of the size of the correlation coefficient.

If we assume that n workers are hired during a given year and that the average job tenure of those workers is t years, the dollar increase in productivity can be determined from Equation 7-1. Admittedly, this is a “cookbook recipe,” but the formula was derived more than 50 years ago and is well established in applied psychology:133

(7-1)

where

134Hunter, J. E., & Schmidt, F. L. (1983). Quantifying the effects of psychological interventions on employee job performance and workforce productivity. American Psychologist, 38, 473-478.

Valid selection and promotion procedures also benefit applicants in several ways. One is that a more accurate matching of applicant knowledge, skills, ability, and other characteristics to job requirements helps enhance the likelihood of successful performance. This, in turn, helps workers feel better about their jobs and adjust to changes in them, as they are doing the kinds of things they do best. Moreover, because we know that there is a positive spillover effect between job satisfaction and life satisfaction, the accurate matching of people and jobs will also foster an improved quality of life, not just an improved quality of work life, for all concerned.

1Bechet, T. P. (2002). Strategic staffing. NY: AMACOM. See also Snow, C. C., & Snell, S. A. (1993). Staffing as strategy. In N. Schmitt & W. C. Borman (eds.), Personnel selection in organizations. San Francisco: Jossey-Bass, pp. 448-478.

2Van Vianen, A. E. M. (2000). Person-organization fit: The match between new-comers' and recruiters' preferences for organizational cultures. Personnel Psychology, 53, 113-149. See also Schneider, B., Smith, D. B., Taylor, S., & Fleenor, J. (1998). Personality and organizations: A test of the homogeneity of personality hypothesis. Journal of Applied Psychology, 83, 462-470. See also Schneider, B. (1987). The people make the place. Personnel Psychology, 40, 437-453.

3Tetenbaum, T. (1999, Autumn). Beating the odds of merger & acquisition failure. Organizational Dynamics, pp. 22-36.

4Martin, J. (2002). Organizational culture: Mapping the terrain. Thousand Oaks, CA: Sage. See also Schein, E. H. (1985). Organizational culture and leadership. San Francisco: Jossey-Bass.

5Van Vianen, op. cit. See also Power, D. J., & Aldag, R. J. (1985). Soelberg's job search and choice model: A clarification, review, and critique. Academy of Management Review, 10, 48-58.

6Kristof-Brown, A. L. (2000). Perceived applicant fit: Distinguishing between recruiters' perceptions of person-job and person-organization fit. Personnel Psychology, 53, 643-671.

7Snow & Snell, op. cit.

8Sheridan, J. E. (1992). Organizational culture and employee retention. Academy of Management Journal, 35, 1036-1056. See also O'Reilly, C. A. III, and Pfeffer, J. (2000). Hidden value: How great companies achieve extraordinary results with ordinary people. Boston: Harvard Business School Press.

9Hunter, J. E., Schmidt, F. L., & Judiesch, M. K. (1990). Individual differences in output variability as a function of job complexity. Journal of Applied Psychology, 75, 28-42.

10Messick, S. (1995). Validity of psychological assessment. American Psychologist, 50, 741-749.

11Schmitt, N., & Landy, F. J. (1993). The concept of validity. In N. Schmitt & W. C. Borman (eds.), Personnel selection in organizations. San Francisco: Jossey-Bass, pp. 275-309.

12Principles for the validation and use of personnel selection procedures (4th ed.). (2003). Bowling Green, OH: Society for Industrial-Organizational Psychology.

13American Educational Research Association, American Psychological Association, National Council on Measurement in Education. (1999). Standards for educational and psychological testing. Washington, DC: American Educational Research Association.

14Uniform guidelines on employee selection procedures (1978). Federal Register, 43, 38290-38315.

15Bahnsen, E. (1996, November). Questions to ask, and not ask, job applicants. HR News, pp. 10, 11. See also Boas, K. M. (1996, Summer). Ask an expert. Business Briefs, 15, pp. 1, 2.

16Klimoski, R. J. (1993). Predictor constructs and their measurement. In N. Schmitt & W. C. Borman (eds.), Personnel selection in organizations. San Francisco: Jossey-Bass, pp. 99-134. See also Hunter, J. E., & Hunter, R. F. (1984). Validity and utility of alternative predictors of job performance. Psychological Bulletin, 96, 72-98.

17Lawrence, D. G., Salsburg, B. L., Dawson, J. G., & Fasman, Z. D. (1982). Design and use of weighted application blanks. Personnel Administrator, 27 (3), 47-53, 101.

18Cappelli, P. (2001, Mar.). Making the most of on-line recruiting. Harvard Business Review, pp. 139-146.

19Carrig, K. (2004). HR in alignment: The link to business results. Alexandria, VA: Society for Human Resource Management Foundation.

20Cascio, W. F., & Aguinis, H. (2005). Applied psychology in human resource management (6th ed.). Upper Saddle River, NJ: Prentice-Hall.

21Knouse, S. B. (1987). An attribution theory approach to the letter of recommendation. International Journal of Management, 4 (1), 5-13.