Reflective Paper

Learning Objectives

After reading this chapter, you should be able to

• Recognize the benefits and risks associated with effective or ineffective employee selection

• Identify a wide range of criteria that employers use to select the right employees

• List, describe, and assess commonly used employee selection tools

• Apply the concepts of validity and reliability to various selection methods

• Describe the laws and regulations governing employee selection

• Identify emerging trends, opportunities, and challenges in selection

Selection, Placement, and Job Fit

5

Radius Images/Getty Images

you66162_05_ch05_p109-138.indd 109 1/31/12 8:41 AM

CHAPTER 5Section 5.1 What Should You Select For?

Selecting the right employees is one of the most crucial HR processes, but it is also one of the most challenging decision-making processes in an organization. An effective selection process should help the organization choose from a group of applicants: those who fit certain jobs and also fit the organizational culture. Failing to hire the right people will negatively impact performance, quality, and productivity while increasing the turnover rate. It can also lead to litigation and compromise the organization’s reputation if the selection process is discriminatory. On the other hand, choosing the right people will enable the organization to compete more effectively and attain its goals and objectives. Selecting the right candidate for the job and the organization is critical to create a human- based competitive advantage because many organizations may have ready access to the same applicant pool and information, especially now that most recruitment efforts are mediated through technology. Figure 5.1 summarizes the selection process as a component of strategic human resource management and outlines the topics discussed in this chapter.

5.1 What Should You Select For?

Many employers have the unrealistic expectation that an ideal candidate can be found to fill the job if the organization uses the right recruitment tools and then offers the candidate a package that he or she cannot refuse. However, this is rarely the case. Instead, an organization first needs to determine the specific factors that are critical for success on the job in question, and then direct its recruitment and selection efforts accordingly. Applicants can then be evaluated based on those factors, and those who rank highest on these fac- tors should be selected. This section describes some of the most important factors that organi- zations consider in employee selection.

1. Individual differences

Individual differences refer to a wide range of personal traits that tend to be stable over time and across situations. These traits can be geneti- cally determined. They can also be “hardwired” in the brain at an early age through the influ- ences of cultural background, upbringing, early childhood and adolescence experiences, or a combination thereof. The following are exam- ples of such stable traits:

• general mental abilities (GMA) or simply raw intelligence as measured by rec- ognized intelligence quotient (IQ) tests (Schmidt, 2009)

• the Big Five personality traits of conscientiousness, extroversion, agreeableness, emotional stability, and openness to experience (Barrick & Mount, 1991)

• the core self-evaluations of self-esteem, generalized confidence, neuroticism (the opposite of emotional stability), and locus of control (Judge & Bono, 2001)

dieKleinert/Superstock

The best candidate for a job should be chosen based on a set of factors specific to the job in question.

you66162_05_ch05_p109-138.indd 110 1/31/12 8:41 AM

CHAPTER 5Section 5.1 What Should You Select For?

Figure 5.1: Selection and job fit

Achieving organizational

& job fit

Choosing selection tools &

procedures

Enhancing employee

motivation, productivity,

and retention

Assessing validity & reliability

Ensuring legal

compliance

Determining selection criteria

Strategic HR planning

Job analysis and job design

Attraction and recruitment of

talent

Selection and job fit

Performance appraisal/

management

Training and development

Compensation

Benefits and benefit

administration

you66162_05_ch05_p109-138.indd 111 1/31/12 8:41 AM

CHAPTER 5Section 5.1 What Should You Select For?

More recently, various character strengths and virtues have also been identified in the emerging field of positive psychology (Peterson & Seligman, 2004).

Individual differences are important for employee selection, because they can contribute to or limit one’s potential for growth and development. Because they are stable in adults, individual differences are extremely difficult if not impossible to change through such HR initiatives as training and motivation. Thus, organizations need to determine the traits that are critical for success in various positions and then ensure that they select employ- ees who possess those traits. For example, extroversion is supported as a critical success factor for sales jobs. However, since extroversion is an individual difference, it is difficult to increase someone’s level of extroversion. Therefore, an organization should hire extro- verted individuals to fill sales jobs, because it cannot effectively turn introverted employ- ees into more extroverted ones through training, rewards, or other approaches.

Job analysis and job design (discussed in chapter 3) can contribute to accurately determin- ing the right traits for each position. To determine the extent to which applicants possess these desired traits, HR uses various individual-differences measurement tools. Most of these tools are based on what is called individual differences psychology or differential psychol- ogy, which mainly focuses on analyzing and interpreting the behavioral tendencies that distinguish one individual from another by recognized traits. Personality tests are the most commonly used individual differences assessments.

Examples of well-researched personality tests are the Big Five personality test and the Core Self Evaluations inventory. Unfortunately, these are not the most commonly used tests. Instead, many organizations design their own tests or purchase commercially available assessments, which may or may not be backed up by sufficient research. For example, many organizations use the Myers-Briggs Type Inventory. This assessment tool has its proper uses; however, its effectiveness, and thus the legality of its use for selection purposes, is questionable. Many assessments are also costly to buy and administer, further highlighting the importance of selecting the most effective selection tools—a topic that will be revisited later in this chapter.

2. Human capital: Knowledge, skills, and abilities

Job applicants also vary in edu- cation, experience, prior train- ing, and physical, mental, and emotional abilities. These fac- tors are not necessarily based on individual differences but can be determined by applicants’ current achievements. Such knowledge, skills, and abilities are collectively referred to as KSAs. Although KSAs are not stable personality traits, devel- oping them can be costly and

Comstock/Thinkstock

Knowledge and skill assessments can include certification exams such as those completed by teachers, medical technicians, and electricians.

you66162_05_ch05_p109-138.indd 112 1/31/12 8:41 AM

CHAPTER 5Section 5.1 What Should You Select For?

time consuming; many organizations therefore require some level of the necessary KSAs as qualifications for each job.

For a particular job, the organization must first determine the KSAs required to perform the job’s tasks and responsibilities. This determination usually takes place at the stages of job analysis and job design. Then the organization needs to employ valid and reliable assessment techniques to accurately measure the extent to which job applicants possess the desired KSAs. The following are examples of assessments for various fields:

• licensure exams assess knowledge for fields such as medicine, engineering, and law • certification exams assess skills such as those often completed by teachers, elec-

tricians, plumbers, and others • physical fitness tests assess physical ability, such as the ability to lift a certain

amount of weight or stand for a given period of time

3. Social capital

Social capital is the value added through interpersonal relationships, interactions, and networking (Adler & Kwon, 2002; Luthans & Youssef, 2004). In an organizational context, social capital emphasizes building a positive organizational culture in order to achieve the organization’s ultimate goals and objectives. HR practices that build social capital include the following:

• selecting qualified employees and placing them in jobs that fit their qualifications • using motivational tools and reward systems • promoting a positive work environment and an organizational culture that

focuses on such collaborative work practices as team-based organizational design, mentoring, coaching, and employee participation and empowerment

Organizations can also select a candidate for the social capital he or she possesses. For example, many contracting jobs favor candidates who have established connections with potential clients. Candidates who possess social capital also find it easier to locate and land job offers than those who lack these connections. Despite its importance, social capi- tal tends to be subjective, vaguely defined, or defined differently from organization to organization. These factors make social capital difficult to measure and therefore difficult to leverage for HR selection purposes.

4. Positive psychological capital

Employees’ psychological states have a direct impact on shaping the organizational cul- ture and environment. Unlike traits, psychological states are cognitive, affective, and social capabilities that are open to growth, development, and change over time and across situations. One psychological state that is recognized as being particularly relevant for the workplace is positive psychological capital, a multidimensional concept that encom- passes four psychological capabilities:

• Confidence (self-efficacy): the ability to take on challenging tasks and make the efforts necessary to accomplish them successfully

• Optimism: attributing positive reasons and causes to present events and future success

you66162_05_ch05_p109-138.indd 113 1/31/12 8:41 AM

CHAPTER 5Section 5.1 What Should You Select For?

• Hope: persevering toward goals and redirecting paths as necessary • Resiliency: bouncing back from adversity (Luthans, Youssef, & Avolio, 2007, p. 3)

Psychological capital has been shown to positively relate to many desirable employee attitudes, behaviors, and performance (Avey, Reichard, Luthans, & Mhatre, 2011), which in turn can translate into human-based competitive advantages. Similar to KSAs, psycho- logical capital can be trained and developed. However, organizations may also want to select applicants based on their psychological capital if there are limited time or resources to develop employees, or if the organization is seeking to make the culture more positive.

For example, Seligman (1998) conducted a fascinating set of studies on the sales force of Metropolitan Life Insurance. At the time, the company was basing selection decisions on the results of an industry-recognized test that measured applicants’ technical knowledge. However, Seligman believed that being a successful salesperson requires high levels of positivity, and he suggested that positivity might be even more important than technical skills. To test this notion, Seligman convinced Metropolitan Life to hire a “special force” of applicants who actually failed the industry test, but who scored highly on a test that he had designed to measure optimism, a recognized dimension of positivity. Interestingly, optimists who failed the industry test outperformed pessimists who passed it, indicating that positivity may be more important to job performance than skills!

5. Attitudes

Employees’ attitudes towards their jobs, their coworkers, and the organization can shape their behavior, performance, and success in their jobs. Employees with positive attitudes have a more constructive influence on the success and fulfillment of organizational goals and objectives than employees who have more education and experience but also have a negative attitude (Sartain, 2003). A positive attitude can manifest through a high energy level and enthusiasm, passion for learning, curiosity to explore and experiment, motiva- tion to succeed, and desire to do what is good for the organization.

Attitudes are difficult to change because they are affected by a myriad of factors that may be beyond the organization’s control, such as satisfaction with other life domains (Judge & Ilies, 2004). Although attitudes are not considered fixed traits or individual differences, many organizations will therefore select an applicant with the “right” attitude that fits the organization’s goals, culture, and job requirements instead of attempting to develop the right attitude in another new hire with other assets. Organizations use many tools to assess such attitudes as job satisfaction, work engagement, and organizational commit- ment in potential and current employees (Harter, Schmidt, & Hayes, 2002). Surveys are the most commonly used attitude assessments. However, many of the available attitude assessments must be administered carefully, with special measures, since applicants can fake attitudes to gain jobs or to profess socially desirable traits (Mueller-Hanson, Hegges- tad, & Thornton, 2003).

For example, many organizations regularly administer “climate surveys,” asking employ- ees to report on their satisfaction with their jobs, supervisors, and coworkers, and their intentions of staying with the organization. However, many employees would be reluc- tant to respond truthfully (or at all) to those surveys unless anonymity is guaranteed. Examples of well-designed attitude assessments are Allen and Meyer’s (1990) Organiza- tional Commitment scale and Gallup’s Q12 scale for measuring work engagement (Harter

you66162_05_ch05_p109-138.indd 114 1/31/12 8:41 AM

CHAPTER 5Section 5.2 Job Fit

et al., 2002). Gallup’s scale has been found to be an effective measure, but its costs should be considered since it is also proprietary.

Prioritizing selection criteria

The goal of the selection process is to identify the best candidates who possess the most influential qualities a job requires and who fit the organizational culture well. These quali- ties include a combination of critical knowledge, skills, and abilities; appropriate experi- ence and education; and personal characteristics, traits, and attitudes. However, assessing too many criteria can be costly and time consuming. It may also result in too few qualified applicants and unfilled positions. On the other hand, assessing too few criteria can yield too many qualified applicants to sift through, which can also be costly and time consum- ing. This sifting can also result in subjective, legally questionable decisions.

Thus, it is wise for an organization to prioritize its selection criteria based on the results of its HR planning, job analysis, and job design. A recruiting team is often assembled to con- tribute to the prioritization, including HR representatives, the hiring manager, successful future coworkers, direct reports, and internal and sometimes even external customers. Employee selection is a balancing act and a process of optimizing across multiple criteria, rather than maximizing one criterion at the expense of others.

5.2 Job Fit

Hiring the best candidates is important, yet compatibility between a candidate, the organization, and the position is critical for the candidate to be successful and for the organization to be able to leverage the candidate’s talent and achieve its goals and objectives. Thus, it is necessary but not sufficient to select a candidate on the above criteria. It also important to focus on the fit between a person and an organization and the fit between a person and a job. Both these focuses optimize the match between the charac- teristics of candidate, the organization, and the job.

Person-organization fit

It is very important for organizations to recruit qualified individuals with the optimum skill sets matching the organizational goals and objectives (Chuang & Sackett, 2005). To attract and retain these qualified individuals, companies must match an applicant’s per- sonality with the organizational environment or culture and then maintain that match during the term of employment.

Person-organization fit can be defined as the extent of resemblance between the per- sonal core values and beliefs of individuals and the norms, rules, regulations, and values of the organizations where they work. Many theories and studies establish as a fact that employees are mentally and physically more sound when they are comfortable with the organizational environment. A strong employee-organization fit has been demonstrated to relate to increased performance, job satisfaction, and organizational commitment as well as decreased strain and intention to quit (Kristof-Brown, Zimmerman, & Johnson, 2005). Person-organization fit is therefore an important selection consideration. For example, an

you66162_05_ch05_p109-138.indd 115 1/31/12 8:41 AM

CHAPTER 5Section 5.3 Selection Methods

individual who is willing to take risks would find an orga- nization that values creativity and innovation to be a good fit, while an individual who prefers stability and structure would find an organizational culture that emphasizes pre- dictability to be a better fit. Sim- ilarly, an extroverted individ- ual will be more likely to fit in an organizational culture that emphasizes teamwork and col- laboration, while an introvert would be a better fit that values individual achievements.

Person-job fit

It is also significant for companies to establish and promote a robust fit between an employee and a job. According to Edwards (2008), person-job fit occurs when the demands of the job are compatible with the capabilities of the incumbent and when the needs and preferences of the incumbent are met by the job. Recruits come to organizations with different combinations of knowledge, skills, and abilities (KSAs). It is the organiza- tion’s responsibility to match those KSAs with the job needs, requirements, and necessary qualifications. This match ensures that all the duties, responsibilities, and tasks associated with the job will be accurately and efficiently accomplished.

From an employee’s perspective, a job is deemed satisfactory when it lives up to his or her expectations and seems to fulfill most of his or her professional needs and desires. Employ- ees are believed to pursue and accept job offers much less in accordance with objective evaluations than with subjective evaluations and personal perceptions of whether or not a job fits them well (Caplan, 1987). Person-job fit, like person-organization fit, has also been shown to relate to a number of desirable work attitudes, behaviors, and performance out- comes. Person-job fit is therefore critical for effective selection (Kristof-Brown et al., 2005)

5.3 Selection Methods

Common selection methods organizations use to gain information about and narrow down potential candidates are resumes and application forms, testing, interviews, reference checks, and honesty tests, medical exams, and drug testing. 1. Resumes and application forms

Job applications and resumes are the organization’s initial method of collecting infor- mation about potential recruits. A major downside of resumes and job applications is

Hemera/ThinkStock

The selection process should take into account a candidate’s ability to fit in with organizational culture, as well as his or her skills and abilities.

you66162_05_ch05_p109-138.indd 116 1/31/12 8:41 AM

CHAPTER 5Section 5.3 Selection Methods

the considerable and unmanageable volume of them that HR departments receive; in most cases, it is extremely challenging to control or carefully consider all these docu- ments. Application forms assist in gathering basic information about applicants that can be grouped into four main categories: contact information, work experience, educational background, as well as the applicant’s signature validating all the information indicated in the application form.

Resumes, on the other hand, are controlled by the applicants rather than the employers, which introduces a source of bias and inaccuracy not present in application forms. How- ever, resumes provide an economical method for collecting initial information, identify- ing potential hires with the basic requirements such as job experience and educational background, as well as selecting applicants for further consideration. Although some- times misleading, resumes provide applicants more freedom in expressing themselves and highlighting personal experiences that structured application forms may not permit.

2. Testing

The next logical step after candidates have been initially screened through resumes and job applications is to test those applicants in order to further screen and narrow down the choice to a few top candidates. This is the main objective of conducting such tests. In broad terms, there are two main types of tests that organizations employ: aptitude tests and achievement tests.

Aptitude tests evaluate the test taker’s level of reception, comprehension, and retention. The most prominent aptitude test is called the General Aptitude Test Battery (GATB). Achievement tests, on the other hand, determine the individual’s current abilities, knowl- edge, and skills. In other words, achievement tests are qualification examinations to ensure that applicants are ready to perform the tasks they are recruited for.

Organizations can use many other forms of tests, depending on the type of job involved. For example, physical ability tests are conducted only for jobs demanding certain physical job performance requirements, for the purpose of mitigating injuries related to certain job activities (Buffardi, Fleishman, Morath, & McCarthy, 2000; Hogan, 1991).

The cognitive ability test, also referred to as the intelligence test, is primarily designed to assess the applicant’s mental abilities. Such tests are particularly relevant for complicated jobs demanding considerable mental capabilities (Salagado, Anderson, Moscoso, Bertuas, & De Fruyt, 2003; Ree, Earles, & Teachout, 1994). Job performance tests are also used by organizations for specialized types of jobs demanding continuously high productivity and performance, such as keyboarding or high-volume machine operation. Job performance tests are mostly conducted through simulations of the actual work setting (Winkler, 2006).

3. Interviews

Many employers prefer to directly interact with their future employees, usually face to face, for a more accurate evaluation of their communication skills, interpersonal skills, and technical experience and knowledge. That is why the job interview is one of the most commonly used selection tools in employment. There are several types of interviews that organization use. These types of interviews are listed and described below. Examples of

you66162_05_ch05_p109-138.indd 117 1/31/12 8:41 AM

CHAPTER 5Section 5.3 Selection Methods

WEB LINKS

Structured, unstructured, and semistructured interviews: http://www.youtube .com/watch?v=nrDONsoVoXE&feature=related

Situational interviews: www.theiia.org/download.cfm?file=81429

Behavioral interviews: http://www.youtube.com/watch?v=rmkfnTaiVj4&feature =related

Panel interviews: http://www.youtube.com/watch?v=eX4ofZoN6Zw

Discussion Questions

1. Which of the above types of interviews have you encountered in the past? Describe the nature of the job, the characteristics of the interviewer(s) and the interviewee, the setting, and the flow of the interview.

2. As an interviewer, which type of interview are you most and least comfortable with? Why?

3. As an interviewee, which type of interview are you most and least comfortable with? Why?

4. Select jobs that may best lend themselves to each type of interview. Explain your opinions.

each type of interview and tips for successfully conducting them (as an interviewer) or doing well at them (as an interviewee) are provided in the links that follow.

• Unstructured interviews mostly involve open-ended questions; the interview- ee’s answer to one question determines the interviewer’s progression to the next question. Most of the questions associated with nondirective interviews are related to personal career objectives and expectations, as well as points of strength and weakness.

• Structured interviews follow a set of pre-established questions that mainly focus on the interviewee’s knowledge, work experience, and technical skills. Structured interviews provide organizations with more valid and reliable results compared to nondirective interviews.

• Situational interviews depict a real work-related scenario that interviewers pres- ent to the interviewees to evaluate their problem-solving capabilities (Clavenger, Perreira, Weichmann, Schmitt, & Harvey, 2001; McDaniel, Morgeson, Finnegan, Campion, & Braverman, 2001).

• Behavior description interviews allow the interviewees to describe how they han- dled a certain past situation to assess their experiences (Campion, Campion, & Hudson, 1994; Pulakos & Schmitt, 1995).

• In panel interviews, two or more representatives from the organization meet in a group setting with the interviewee. This type of interview has the advantage of using multiple raters; hence it is less biased.

you66162_05_ch05_p109-138.indd 118 1/31/12 8:41 AM

CHAPTER 5Section 5.3 Selection Methods

4. Reference checks

Application forms often ask applicants to provide reliable reference sources, such as for- mer employers, so that organizations can verify applicants’ capabilities and past experi- ences. In reality, however, references are not a very reliable source for verifying informa- tion since applicants are careful to choose only references who are most likely to present them in a favorable light.

Providing references for former employees is very risky for employers due to the risk of pos- sible lawsuits. For example, positive references can trigger lawsuits when new employers claim they have been misled if an employee’s conduct has not been as expected after a certain

period of employment (Long, 1997). On the other hand, nega- tive references can cause former employees to claim defamation and loss of reputation, even with limited evidence (Ryan & Lasek, 1991). For that rea- son, organizations should be cautious in providing former employees with references, carefully focusing only on job- related experience and behav- ior rather than treading into personal opinions that might be misinterpreted. However, such references may leave organiza- tions with narrower descrip- tions of applicants’ past perfor- mance, which undermines the purpose of their seeking out ref- erences in the first place.

5. Honesty tests, medical exams, and drug testing

Some jobs involve physically demanding tasks and responsibilities. Accordingly, many organizations conduct medical and fitness examinations to ensure that employees are capable of successfully performing the assigned job requirements. Another purpose of these tests is to determine applicants’ initial physical status, prior to employment, for future evaluation in case of a work-related injury or disability. Organizations must prac- tice extreme caution in applying for physical examinations for potential recruits to avoid any discriminatory claims.

Employees are often also be expected to employ honest and safe behavioral practices inside and outside the organization—for instance, by never using drugs. Although reference checks and interviews can assess honest and safe behavior, some organizations rely on more direct verification methods, such as honesty and drug tests. Honesty tests using the polygraph were banned in 1988 and replaced with written integrity tests that, although not as effective, have some ability to highlight negative behavioral issues (Bernardin & Cooke,

iStockphoto/ThinkStock

Applicant references are not a very good source for verifying information since applicants will always provide references who will give favorable recommendations.

you66162_05_ch05_p109-138.indd 119 1/31/12 8:41 AM

CHAPTER 5Section 5.4 Foundational Concepts in Designing and Evaluating Selection Methods

1993; Ones, Viswesvaran, & Schmidt, 1993). Drug testing, on the other hand, is an accurate and reliable method for exposing substance abuse. However, many individuals see drug testing as a controversial privacy invasion that can lead to false accusations of substance abuse. Some organizations avoid these problems by relying on other types of testing, such as impairment and fitness tests for duty programs, that mainly assess mental abilities in carrying out critical tasks rather than analyzing the root cause of impairment.

5.4 Foundational Concepts in Designing and Evaluating Selection Methods

The goal of the selection process is to accurately and consistently predict future job performance through assessing a predetermined set of factors that are believed to be related to applicants’ ability or motivation to perform the job. For example, organizations often hire applicants with the highest scores on a particular test, or those who received the most favorable ratings on an interview. The underlying assumption and rationale for this common approach is that test scores or interview ratings are accurate and consistent predictors of subsequent job performance.

However, job performance can never be predicted with 100% accuracy or consistency. The only way to reach perfect accuracy would be for employers to hire all the applicants for a particular job, have them perform the job, and then choose those with the highest per- formance. Of course this approach is neither practical nor cost effective. Moreover, even if an organization can afford to hire a large number of applicants and retain those with the highest performance, performance prediction is still not perfectly accurate. For example, many organizations have probationary periods in which the employer and the employee “try each other out” before a more permanent arrangement is established. However, employees may be motivated to perform at a much higher level during the probationary period in order to secure permanent employment. Once the probationary period is over, the employee’s performance level may drop. Moreover, even if overall job performance can be predicted accurately, performance may be influenced over time and across situa- tions by a myriad of factors that cannot be anticipated or managed. This variation renders consistency in performance prediction a serious challenge in candidate selection.

It is impossible to make perfect predictions of job performance. However, there are many recognized selection tools and methods that can make reasonably high-quality predictions possible by accurately and consistently measuring or assessing important predictors that are strongly related to specific job performance criteria. Accurate prediction of perfor- mance criteria is also referred to as high validity. It indicates that a predictor (e.g., test scores or interview ratings) is significantly related to desirable performance outcomes, so that those who measure favorably on the selection tool or method have a higher chance of being high performers than those who do not. For example, if a valid test is used in the selection process, then those who score higher on the test are also likely to perform better on the job.

Consistency, also referred to as high reliability, indicates that a predictor can be replicated over time and across situations. For example, a reliable selection procedure will reflect an applicant’s aptitude, ability, and motivation to do the job. The procedure will not reflect the subjective opinion of the interviewer, the temperature or noise level of the room where

you66162_05_ch05_p109-138.indd 120 1/31/12 8:41 AM

CHAPTER 5Section 5.4 Foundational Concepts in Designing and Evaluating Selection Methods

an employment test took place, or other factors that are not related to the actual job (fac- tors that, if different, could have yielded a different score or decision as to whether or not the organization should select the applicant).

Validity

Validity is the extent to which a selection tool or procedure can accurately predict subse- quent performance. Validity is an extremely important factor to consider when designing or evaluating selection methods; there are several reasons:

1. The more accurate the testing process is, the more likely it is that the best candi- dates will be selected, promoted, or matched with the right jobs.

2. Invalid or unreliable tests can be costly. Many tests need to be purchased or a license of use must be obtained. Moreover, testing is time consuming for both the candidate and for the organization. Tests must be administered and rated, and the results must be reported—processes that require managers’ and HR profes- sionals’ time and energy.

3. The wrong tests carry such opportunity costs as wasted time and the lower pro- ductivity of the employees hired or promoted because of their invalid test results.

4. Finally, invalid testing has legal implications. An invalid test may not be related to performance, but it may still be discriminatory by favoring certain protected classes over others. For example, younger job applicants may consistently score higher than older applicants on a test, and these scores may not be related to job performance. In such a case, that test may be found to be discriminatory. While the organization may have had no intent to discriminate, the use of invalid, discrimi- natory tests can result in what was referred to later in this chapter as disparate impact, which is also illegal. Other legal considerations will be discussed in greater detail later in the chapter.

Furthermore, when designing or evaluating selection methods, several dimensions of validity should be taken into account (Robinson, 1981; Schmitt, Good- ing, Noe, & Kirsch, 1984). Five validity dimensions are mul- tiple facets of the same con- cept and should be considered in conjunction, rather than individually:

1. Criterion-related validity

2. Content-related validity

3. Construct validity 4. Face validity 5. External validity

AP Images/Ric Francis

The more accurate the testing process, the more likely it is that the best candidates will be selected.

you66162_05_ch05_p109-138.indd 121 1/31/12 8:41 AM

CHAPTER 5Section 5.4 Foundational Concepts in Designing and Evaluating Selection Methods

First, criterion-related validity is the predictive, empirical (number-based) link between a predictor and an actual measure of job performance. Statistically, it is the correlation between applicants’ scores on the predictor and their subsequent job performance scores. This correlation ranges from 0 to ±1.00. Tests that yield validity coefficients ranging from ±.35 to ±.45 are considered useful for employment decisions, while tests with validity coefficients of less than ±.10 probably have little relationship with job performance.

For example, there are numerous valid measures of individual differences; of human, social, and psychological capital; and of the job attitudes discussed earlier. Organizations should make sure only valid measures are used for selection purposes. For the reasons listed above, “interesting” personal or interpersonal characteristics should not be consid- ered if they cannot be validly related to job performance. They are costly, time consuming, and distracting, and they can be found discriminatory.

Criterion-related validity is established through building a track record for a selection tool. For example, current employees can be assessed using the selection tool in question, and their current performance can then be correlated to their scores on the selection tool. If the correlations are sufficiently high and statistically significant, then the tool can be used for selection. This correlation is referred to as concurrent validity. Alternatively, a new or experimental selection tool can initially be administered to applicants but not be consid- ered for selection. Selected applicants’ performance can then subsequently be measured and correlated to their initial scores on the selection tool. If the correlation is sufficiently high and statistically significant, then the selection tool can become incorporated into the selection process and scores can be taken into consideration for selection decisions. This correlation is referred to as predictive validity.

Second, content-related validity is the logical connection between the selection procedure and the actual job. For example, interview or test questions should be directly related to the important requirements for and qualifications of a job—the rationale being that if an interview or test samples actual job behaviors, then individuals who perform well on the interview or test will also be able to perform well on the job. Content-related valida- tion studies rely heavily upon information gathered in job analysis. If test questions are directly related to the specific skills needed to perform a job, then the test will have high content-related validity.

Third, construct validity is the extent to which a selection tool accurately reflects the abstract personal attributes, or constructs, that a tool intends to measure. For example, while there are valid measures of many personality traits, numerous invalid measures of the same traits can be found in magazines or on the Web. Invalid measures are sometimes even sold to organiza- tions by consultants. Creators of those measures claim that they are beneficial, and the mea- sures seem to make sense on the surface and to ask the right questions, but they should not be used for employment selection purposes because their predictive power is questionable.

Face validity is related to content and construct validity. Face validity is not a form of validity in a technical sense; it refers to applicants’, organizations’, or observers’ subjec- tive impressions of how relevant a predictor is to a job. For example, a bank teller would find nothing strange about taking an employment test that dealt with numerical ability or money-counting skills because these skills are obviously related to job performance. On

you66162_05_ch05_p109-138.indd 122 1/31/12 8:41 AM

CHAPTER 5Section 5.4 Foundational Concepts in Designing and Evaluating Selection Methods

the other hand, the teller applicant may not see the job relevance of a personality test. This test would thus have low face validity for this job. While it can be irrelevant in a scientific sense, organizations should still pay close attention to the face validity of their selection procedures, since low face validity can result in poor perceptions of the organization. If an organization has a choice between multiple tools that are otherwise equally valid, the tool with higher face validity should be used.

Finally, external validity refers to the generalizability of a selection tool or procedure. For example, an interview protocol or employment test may be more valid in some job positions, departments, organizations, industries, regions, or countries than it is in oth- ers. Thus, predictors of performance need to be “revalidated” if the context in which they will be used is sufficiently different. On the other hand, if there are significant situational similarities, then the predictive capacity of a selection process can be gener- alized. For example, many industries rely on having passed recognized licensing exams or obtained certifications to deem their applicants qualified for technical jobs within those industries.

Reliability

Reliability is the extent to which it is possible to replicate the results from a predictor such as a selection tool, method, or procedure. For example, a reliable interview protocol should yield the same conclusion about the same applicant, regardless of such irrelevant factors as these:

• Which interviewer was the applicant assigned to? If some interviewers are more lenient, or if the interview protocol allows for subjective evaluations, then the interview protocol is unreliable.

• In which room did the interview take place? If some rooms are known to be more comfortable or conducive to higher-quality interactions than others, then all interviews should be scheduled in the same (or in a comparable) room to increase reliability.

• What time of the day did the interview take place? If interviewers get more tired toward the end of the day, this time may bias their evaluations of the applicants interviewed at that time.

• What was the sequence of applicants? Interviewers may become more lenient or more stringent over time. For example, an average applicant may be at a signifi- cant advantage if interviewed after a number of mediocre applicants, but may be at a significant advantage if interviewed immediately after an exceptionally good applicant.

• Was the applicant in his or her normal state of being? If an applicant is inter- viewed while he or she is ill, exhausted, agitated, anxious, or frightened, the results are likely to be unreliable.

In other words, reliability is a reflection of the degree of error in a measurement, which also conveys the stability of that measurement’s outcomes (Nunnally, 1994). Typically, assessing reliability involves gathering scores for a particular predictor twice, then cal- culating the correlation between the two sets of scores. This correlation is referred to as

you66162_05_ch05_p109-138.indd 123 1/31/12 8:41 AM

CHAPTER 5Section 5.5 Increasing the Validity and Reliability of the Selection Process

WEB LINK

Valid and Reliable Psychological Assessments: www.mindgarden.com This website provides validity and reliability information on a number of assess- ments suited for evaluating various personality traits and developmental charac- teristics, many of which are well suited to the workplace. The site also provides contact information to obtain permission to use various tools and measures, many of which are free of charge.

the reliability coefficient, and it ranges from 0 to +1.00. The closer the score sets approach a perfect +1.00 correlation, the more reliable the predictor is said to be. For selection pur- poses, the two sets of scores can come from scoring the same group of applicants or current employees twice on the same procedure, while varying certain factors. For example, a test can be administered at two different times, or an interview can be conducted twice using different interviewers, and the scores can then be corre- lated to assess reliability. These approaches are respectively referred to as test-retest reliabil- ity and inter-rater reliability.

5.5 Increasing the Validity and Reliability of the Selection Process

Selecting candidates for employment entails the use of valid and reliable methodologies for the selection process, ensuring that selected applicants fit the jobs they have been selected for and fit the general organizational culture. Many organizations continually look for ways to improve their methodologies, including creating and using more valid and reliable methods, instituting better training, and linking selection to the HRM process.

1. Better by design: Creating and using more valid and reliable methods

Selection tools vary in their validity and reliability. For example, resumes may be more valid than application forms because resumes allow applicants to expand on their job- relevant qualifications, which may be more predictive of job performance than the many unrelated pieces of information on generic job applications. On the other hand, application

iStockphoto/ThinkStock

A reliable interview protocol should yield the same conclusion about an applicant regardless of the interviewer, the interview room, time of day, or the sequence of applicant interviews.

you66162_05_ch05_p109-138.indd 124 1/31/12 8:41 AM

CHAPTER 5Section 5.5 Increasing the Validity and Reliability of the Selection Process

forms may be more reliable because their structured for- mat makes it harder for appli- cants or employers to overlook or intentionally omit relevant information. This reliability is one reason many organizations require applicants to submit a resume and also complete an application form.

Similarly, unstructured inter- views may be valid since they allow the interviewee to elabo- rate on their unique capabili- ties and experiences. However, unstructured interviews are less reliable than structured interviews, especially in inter- rater reliability, since each interview may vary on the topics covered, the questions addressed, and thus the conclu- sions that interviewers may reach about each applicant. It is crucial to investigate the validity and reliability of various selection tools and procedures before using them. Using a variety of selection tools and procedures is also one of the best ways to increase the over- all validity and reliability of the selection process.

2. Better by implementation: Training those who select and overcoming personal biases

Selecting the right candidates usually involves some subjectivity, which may compro- mise the validity and reliability of the selection process. Since unstructured interviews are commonly used in selection, it is logical for organizations to prepare a well-equipped team of interviewers. It is also essential that interviewers are trained to determine the most relevant questions to ask based on their evaluation of the background and experi- ence of the applicant in question. Interviewers must exercise extreme caution in select- ing questions. Each question must have a clear and insightful job-related, rather than personal, purpose.

Although extensive training of interviewers might be costly, it can also help organizations avoid the substantial costs associated with the inadequate selection of employees, as well as potential litigation due to discriminatory selection. The same fact applies to all those involved in screening resumes initially, calling the applicants’ references, preparing job offers, or conducting other stages of the selection process. Interviewers are less likely to operate on personal biases when they have a clear understanding of the job and are ade- quately trained to assess applicants for their fit with the job and the organization. Sensitiv- ity training familiarizes managers and employees with issues of diversity, discrimination, and harassment. This training has become common in many organizations, which helps their members become more aware of their potential prejudices.

iStockphoto/Thinkstock

Resumes allow applicants room to expand on their qualifications, but applications ensure that the most critical, relevant information is communicated.

you66162_05_ch05_p109-138.indd 125 1/31/12 8:41 AM

CHAPTER 5Section 5.6 Legal Issues in Selection

3. Better by integration: Linking selection to the HRM process

As emphasized in every chapter, the purpose of the HRM process is to help an organization achieve its goals through enhancing the effectiveness of its people. This purpose is realized by aligning the HRM objectives with those of corporate objectives and strategic plans. Link- ing the staffing process, which includes selection, with planning, employee compensation, and work design will ensure that all processes mesh effectively and have a unified goal.

Careful planning, job analysis, job design, and recruitment can yield a smoother and more effective selection process because they provide a high-quality applicant pool to choose from. Well-designed compensation and benefits, training and development opportunities, and performance feedback can also facilitate selection by making the organization attrac- tive to qualified applicants.

In turn, enhancing the selection process can facilitate other HR functions. Employees are more predictable when they are selected using valid and reliable procedures. Their perfor- mance level is more likely to be adequate and consistent. When organizational and job fit are carefully considered in the selection process, the process is likely to yield employees who stay longer, have better attitudes, and are more satisfied with their jobs (Kristof- Brown et al., 2005). Planning for, training, and assessing this type of workforce is signifi- cantly easier than would be the case in an organization with high turnover and dissatis- fied, low-performing employees.

5.6 Legal Issues in Selection

By their very nature, employee selection methods attempt to differentiate between candidates who possess requisite job skills and those who do not. When selection methods treat applicants differently based on other factors such as race, age, or sex, they are said to be discriminatory. Obviously, it is imperative for HR professionals to understand the rights and obligations of both the company and the job candidate in this sensitive area. This section, while not exhaustive, highlights landmark discrimination leg- islation and how it has affected organizations’ selection processes.

Equal employment opportunity

As introduced in chapter 4, Title VII of the Civil Rights Act prohibits discrimination based on sex, religion, race, color, or national origin in hiring, promoting, firing, setting wages, testing, training, apprenticeship, and other terms and conditions of employment. The Equal Employment Opportunities Commission (EEOC) enforces Title VII and facilitates its appli- cation in organizations through education and technical assistance. EEOC also enforces laws that prohibit discrimination based on other protected classes such as disability and age.

Age discrimination

Age discrimination occurs when an employer treats an employee differently based on his or her age, and is legally defined in the Age Discrimination in Employment Act (ADEA)

you66162_05_ch05_p109-138.indd 126 1/31/12 8:41 AM

CHAPTER 5Section 5.6 Legal Issues in Selection

of 1967. The ADEA is a federal law and protects all employees in the United States over the age of 40 from the moment they contact an employer about a job opening. Specifically, this law forbids employers from making employment decisions based on a person’s age. For example, employers cannot terminate employment, deny a bonus or raise, or refuse to hire or promote someone simply because they think that person is too old. However, it is important to note that persons under age 40 are not protected under the ADEA. Thus, it is possible, without legal repercussions, for an organization to discriminate against an individual for being too young.

Discrimination based on disability

As discussed in chapter 3, the Americans with Disabilities Act (ADA) of 1990 prohibits discrimination against disabled employees who are otherwise qualified. A disability is a physical or mental impairment that substantially limits one or more major life activities. Examples of individuals with physical disabilities include people with epilepsy, diabetes, severe forms of arthritis, hypertension, paraplegia, impaired vision, and carpal tunnel syndrome. Individuals with mental impairments include people with major depression, bipolar (manic-depressive) disorder, autism, and mental retardation. The law also makes it unlawful to discriminate against any applicant or employee, disabled or not, based on that person’s relationship or association with an individual with a disability.

The ADA forbids discrimination against people with disabilities in all areas of employment. In addition, it is unlawful for an employer to retaliate against an applicant or employee for asserting his or her rights under the ADA. However, an individual with a disability must be able to perform the essential functions and meet the qualifications of the job, with or without accommodation, in order to be protected by the ADA. In other words, the per- son must satisfy requirements for education, employment experience, skills, licenses, and any other job-related qualification standards. Additionally, the employer must provide any reasonable accommodation that a person with a disability needs in order to apply for a job, perform a job, or enjoy benefits equal to those offered to other employees. The employer does not, however, have to provide any accommodation that would impose an undue hardship on the organization.

Other employment laws

Several other laws are also relevant for employment in general, and employee selection in particular. For example, as early as 1935, the National Labor Relations Act (NLRA) of 1935 legalized unionization and collective bargaining. Shortly prior to the Civil Rights Act of 1964, the Equal Pay Act of 1963 prohibited pay differentials for equal jobs across gen- ders. The Pregnancy Discrimination Act of 1978 also prohibits dismissal of an employee due to pregnancy and ensures job security during maternity leave.

More recently, the Immigration Reform and Control Act of 1986 prohibits hiring illegal aliens. The Worker Adjustment and Retraining Notification Act (WARN) of 1988 requires a 60-day notice prior to closedown or massive layoffs. The Employee Polygraph Protection Act of 1988 limits the scope of lie detector use and prohibits it as the sole determinant in hiring and firing decisions. Finally, the Family and Medical Leave Act (FMLA) of 1993 affects organiza- tions that employ 50 or more workers. Employees who have worked at such organizations

you66162_05_ch05_p109-138.indd 127 1/31/12 8:41 AM

CHAPTER 5Section 5.6 Legal Issues in Selection

for at least one year are granted up to 12 weeks of unpaid leave for family or medical reasons in any given one-year period.

Foundational concepts for the enforcement of employment laws

Several concepts are criti- cal for the implementation and enforcement of the above employment laws. For exam- ple, illegal discriminatory prac- tices can be in the form of dis- parate treatment or disparate impact. A policy or selection procedure may not explicitly

discriminate against members of a protected class (which would be a form of disparate treatment), yet this fact does not make that procedure legal. If the procedure has a discrimi- natory effect (i.e., a disparate impact), it can be illegal even if the effect is unintended.

For example, setting height or weight requirements for job applicants in a particular job may not be intended as a discriminatory practice. However, because these requirements exclude more women and certain racial groups that tend to be shorter or lighter, they can be found discriminatory unless they are justified by specific job requirements. These job requirements must create what is referred to as a business necessity.

As a case in point, it has been found justifiable that an individual in a wheelchair may be denied a job as a firefighter. On the other hand, for the same job category, height and weight requirements have been replaced with job sample tests through which applicants would be evaluated on their fitness levels and abilities to successfully carry out the physi- cal job requirements, regardless of their body types.

Similar to discrimination, harassment in the workplace can assume two forms: quid pro quo or a hostile work environment. Quid pro quo (Latin for “this for that”) is a more explicit form of harassment where the harassing member of the organization may require the harassed member to exchange sexual favors against his or her will. A hostile work environment is a more subtle but comparably illegal form of harassment. Some organiza- tional members can create a hostile work environment by offending others, causing them undue hardships, and hindering their abilities to adequately perform their jobs. Examples include sexual or racial remarks or displays of inappropriate forms of art (e.g., posters that would make female employees uncomfortable). Unfortunately, many employees are unaware that their actions can cause their employers to be held legally liable for a hostile work environment. For example, employees who use company e-mail to forward jokes with sexual, racial, or religious connotations expose their employers to such risks.

It is also important to note that discrimination laws protect members of majority as well as minority groups. For example, as discussed in chapter 4 in the context of affirmative

AP Images/Greg Gibson

In February 1993, President Clinton signed the Family and Medical Leave Act. This act grants qualified employees up to 12 weeks of unpaid leave for family and medical reasons in any given one-year period.

you66162_05_ch05_p109-138.indd 128 1/31/12 8:41 AM

CHAPTER 5Section 5.6 Legal Issues in Selection

WEB LINK

Summary of Major HR Laws: http://www.dol.gov/opa/aboutdol/lawsprog.htm The Department of Labor provides this summary of major HR laws. Various links on this page also provide more details and assistance with interpreting the statutes and regulations governing employment in the United States.

action, some organizations may consider hiring less qualified women and minorities in the attempt to appear less discriminatory and more diverse. However, these attempts can be found discriminatory against more qualified white male applicants, who have tradi- tionally constituted the majority of the working population. This “overcompensation” effect is referred to as reverse discrimination and is illegal.

Finally, it is important to note that filing a claim with EEOC comes at no cost to the employee, and that most of the laws discussed above also have clauses that prohibit employers from retaliating against employees who choose to report discriminatory prac- tices. Once an employee provides basic evidence of discrimination, the burden of proof shifts to the employer, who may lack the documentation and evidence that would make it possible to prove the work environment was not discriminatory. Discrimination law- suits can cost the employer millions of dollars in punitive damages. As mentioned ear- lier, employment laws cover not only current employees, but also job applicants and past employees, making them particularly relevant for selection as well as for all HR practices.

A MOMENT IN THE LIFE OF AN HR MANAGER “You can’t really trust your gut feeling about an applicant”

Most managers believe that they know a good applicant when they see one. However, in real- ity, they couldn’t be more wrong! Here are some examples:

1. Tom hires Paolo as a production worker because Paolo is an immigrant and Tom believes that immigrants are hard workers. All the references listed in the application gave Paolo favorable recommendations. Two weeks later, it turns out that Paolo is an illegal alien. Paolo gets deported, and the organization is fined.

2. Sarah is sitting in the interview room, waiting to interview Andy for a sales job. Andy is late and comes in with a big coffee stain on his shirt. Sarah concludes that Andy would make a terrible salesperson because he is disorganized and poorly groomed; she cuts the interview

Walter B. McKenzie/The Image Bank/Getty Images

Most hiring managers believe that they know a good applicant when they see one, but that is not always the case.

you66162_05_ch05_p109-138.indd 129 1/31/12 8:41 AM

CHAPTER 5Section 5.7 Opportunities, Challenges, and Recent Developments

short and does not recommend Andy for the job. A month later, Andy graduates with a GPA of 4.0 from a reputable school and accepts a more attractive job offer with a competitor. A year later, Andy is promoted to sales manager for having $5 million in sales, which is unheard of in that industry.

3. Jaime goes to diversity training and comes back convinced that the organization should exert more effort and resources in hiring women and minorities. So, for the next six months, she favors women and minorities in all of her selection decisions, even in cases where there are more-qualified white males in the applicant pool. As a result, performance suffers and the organization faces a class action lawsuit.

Despite these hiring managers’ good intentions, they have made critical selection mistakes. As a result, they compromised the performance and reputation of their organizations. Tom should have done due diligence in confirming Paolo’s immigration status, which would have been more likely if he had given all applicants a fair chance and followed the proper procedures regardless of each applicant’s background. The same applies to Jaime. She should have kept the job requirements front and center in her decision, rather than any applicant’s gender or race. As for Sarah, she would have probably hired Andy had she still gone through the interview protocol and heard his amazing answers to the interview questions—answers that none of the other applicants would have been able to give. But because she was too busy staring at the coffee stain and supposing him to be disre- spectful, rude, and undisciplined for being late to the interview, she did not really listen to anything he said.

5.7 Opportunities, Challenges, and Recent Developments in Employee Selection and Job Fit

Finding the right applicant for the job is a challenging task that requires a great deal of effort and dedication. Some of the opportunities, challenges, and recent develop-ments organizations face regarding selection have to do with legal and regulatory issues; sociocultural developments; global and competitive factors; employee motivation; morale, productivity, and retention; and unions and labor relations.

Legal and regulatory opportunities and challenges in employee selection

In addition to the strategic and administrative responsibilities associated with selecting and hiring a candidate, HR managers are also bombarded with legal aspects of employ- ment such as new legislation, managerial and executive orders, and court decisions. Maintaining nondiscriminatory practices while determining employee eligibility and pre- dicting performance are serious challenges that HR managers face on a daily basis. HR managers must exercise extreme caution to ensure that selection procedures are appropri- ately and purposefully designed to address only information that pertains to a job.

On the other hand, organizations that successfully promote diversity in their workforces have the tremendous opportunity to leverage unique talent and build a competitive advantage. For example, diversity is one of the criteria behind Fortune magazine’s Best Companies to Work For lists. Many successful organizations such as Google pride them- selves in having cultures that embrace and celebrate diversity, which attracts many tal- ented employees from a wide range of backgrounds.

you66162_05_ch05_p109-138.indd 130 1/31/12 8:41 AM

CHAPTER 5Section 5.7 Opportunities, Challenges, and Recent Developments

Sociocultural developments: You may have selected them, but what will make them select you?

It is a very challenging process for organizations to attract qualified candidates for jobs in a highly competitive and skill-demanding market. Moreover, it is an even bigger challenge to retain these talents, skills, and experiences within the organization. A considerable por- tion of employees’ attraction to a certain job and their satisfaction with it is their personal perception of how well they fit in that job and in the general organizational culture. Many factors govern these perceptions, such as challenging tasks, good prospects for growth and career advancement, job stability and security, assignments that carry interesting and meaningful responsibilities, the training and development of skills and talents, reasonable working hours, favorable working environment with well-matched peers, recognition, respect, appreciation and self-actualization, fair treatment, company loyalty, and recogni- tion and assistance with employees’ personal needs. However, resources are necessary to keep this host of factors in place, and these resources are drying up quickly in light of today’s cut-throat competition and economic recession.

Moreover, significant shifts and challenges are expected to occur as organizations attempt to attract and retain the Millennial Generation born from the mid-1970s to the early 2000s. In addition to the above expectations, Millennials tend to expect a lot of flexibility. They tend to take the norm as being self-directed careers that constitute a long series of short- term jobs, multiple income streams, and entrepreneurship. They are as unlikely to rely on organizational initiatives for their learning and development as they are to rely on social security to fund their retirement. In other words, Millennials tend to take matters in their own hands and work at their own terms, making it difficult for any one organization to attract them, let alone retain them over time without constantly negotiating most of the terms of employment (Yost, 2011).

Global and competitive factors

Global staffing involves making recruiting and selection decisions for the purpose of hir- ing individuals for assignments in other countries. Global recruiting is extremely chal- lenging, and the associated costs are usually very high. Accordingly, accurate selection decisions have to be carefully considered and validated. Global recruiting also involves a variety of factors that HR managers have to adapt and prepare for, such as different tax laws for different countries as well as various customs, cultures, and traditions. For instance, for a successful global employee selection process to occur, HR managers must exert themselves to depict the lifestyle, work environment, culture, and habits to selected employees. Only then will employees be able to deal with such issues as acceptable codes of ethics and moral and religious values (Clegg & Gray, 2002).

An example of an organization that has been successful in global staffing is LivingSocial, a Washington, DC–based company that provides its subscribers worldwide with daily deals. LivingSocial has expanded from 600 to 4,500 employees in 2011, including 700 global positions to support services for the company’s 46 million members outside the United States, in the 25 countries that the company currently serves.

you66162_05_ch05_p109-138.indd 131 1/31/12 8:41 AM

CHAPTER 5Section 5.7 Opportunities, Challenges, and Recent Developments

To select the right candidate for a global assignment, HR managers must carefully examine aspects such as cultural adjustment abilities, personality traits and characteristics, knowl- edge of global organizational requirements, communication skills, and other personal and family requirements and considerations. Fortunately, despite the perceived high failure rates of expatriate assignments of the past, recent studies show that these perceived trends are in fact inaccurate (Harzing, 2002). Instead, research demonstrated that self-efficacy, frequency of interaction with host nationals, interpersonal skills, family support, and dis- cretion can facilitate expatriate adjustment. On the other hand, cultural novelty, role con- flict, and ambiguity were shown to hinder adjustment. Expatriate adjustment is critical. Well-adjusted expatriates have higher performance, are more satisfied, experience less job strain, engage in more organizational citizenship, and are less likely to quit (Hechanova, Beehr, & Christiansen, 2003).

Impact of selection and job fit on employee motivation, morale, productivity, and retention

The last decade has witnessed a movement toward empha- sizing employee talents and strengths in selection, organi- zational fit, and job fit. Orga- nizational and job fit can be influential factors for employ- ees’ initial acceptance or rejec- tion of job offers. However, what’s even more critical is that these factors can also exert significant influence on work quality, motivation, and productivity after employees have been hired. For exam- ple, as discussed in chapter 3, Gallup’s employee engage- ment methodology considers two factors—the daily ability to do what one does best at work and having a best friend in the workplace—as being critical for having engaged employees. In turn, this engage- ment yields numerous desirable outcomes for employees and organizations (Harter et al., 2002). These outcomes are particularly evident after true and unbiased job expectations are clearly and precisely communicated to applicants during the recruiting process.

Individuals approach organizations with many needs, desires, and expectations. Those individuals also come from a variety of backgrounds with different skills, experiences, capabilities, and personal perceptions. When these individuals are ultimately hired by organizations, they expect to find a job environment that would not only fulfill and sat- isfy their basic needs but also utilize, enhance, and promote their abilities and talents. In addition, significant job involvement and the utilization of maximum talent potential in

Jim West/age footstock/SuperStock

Organizations often seek favorable relationships with unions, as union activities can influence human resources practices in a number of ways.

you66162_05_ch05_p109-138.indd 132 1/31/12 8:41 AM

CHAPTER 5

EYE ON THE GOAL “Beyond validity and reliability: Utility analysis and return on investment in selection”

While effective selection can be expensive, the costs of selection mistakes can be even worse. One of the recognized scientific approaches to quantifying the return on investment in effective selec- tion is utility analysis, which uses statistical formulas to calculate these returns over time. Utility analysis takes into consideration several aspects of the selection process; for example, it accounts for the predictive capacity (validity) of one selection tool or process versus another. Utility analysis can also account for the joint predictive capacities of multiple selection devices, such as combining structured interviews and personality tests. Furthermore, utility analysis accounts for the impor- tance of the job for the organization in terms of the financial impact of more effective selection in that particular job. Some jobs may exhibit higher variability in performance, warranting more accu- rate selection, while others may not have as much variation across incumbents, limiting the scope of improvement in selection. Utility analysis also accounts for factors such as labor demand and supply, which the organization may not be able to control. When the desired talent is in abundant supply, organizations can afford to be more selective, which can increase the return on investment in more effective selection procedures. On the other hand, the cost may outweigh the benefits when the organization intends to select the majority of applicants due to talent shortages.

As you probably know if you are familiar with accounting standards, the primary difference between an investment and an expense is that returns on investments accrue over more than one year. If effective selection is indeed an investment, its benefits should accrue beyond the current year. Sta- tistical methods such as utility analysis go beyond the costs of using various selection devices, and even beyond the opportunity costs of effective selection (e.g., the redirection of managers’ time and energy away from other activities). These methods also take into consideration time-sensitive factors such as employee flows, which in turn are affected by the number of employees hired using one or more selection procedure, as well as these employees’ retention and turnover rates (Cascio & Boudreau, 2011).

Section 5.7 Opportunities, Challenges, and Recent Developments

prominent activities allows individuals to be recognized within the organization, which enhances their sense of self-actualization. Favorable HR practices can promote a concrete culture of trust and create a long-term sense of commitment within the organization for qualified and skilled human assets (Whitener, 2001).

Selection, unions, and labor relations

Union activities directly affect HR practices. For example, unions can impose pressure on management to give priority in job selection to union members rather than outside applicants when a position opens. Unions also influence the job selection process through negotiating shorter probationary periods and a quicker determination of employees’ suit- ability for positions. These activities can sometimes result in premature and poor judg- ment of individuals, which may ultimately lead to inaccurate selection decisions and unsatisfactory job performance. Other areas where unions influence HR decisions include testing, promotions, layoffs, and merit-based systems. Organizations often seek favorable relations with unions, but such relations can be challenging, as they can compromise the validity and reliability of the selection process.

you66162_05_ch05_p109-138.indd 133 1/31/12 8:41 AM

CHAPTER 5Summary

Chapter Summary

• Selecting the right employees is one of the most crucial HR processes, but it is also one of the most challenging decision-making processes in an organization. An effective selection process should help the organization choose, from a group, applicants who fit certain jobs and also fit the organizational culture.

• Organizations should use a combination of individual differences; human, social, and psychological capital; and attitudes as criteria for selection. These criteria should be prioritized based on job requirements and organizational culture.

• Common selection methods include resumes, application forms, tests, inter- views, reference checks, physical exams, and drug tests.

• The quality of selection tools, methods, and procedures depends on their valid- ity and reliability. Validity is the extent to which a selection tool or procedure can accurately predict subsequent performance. Reliability is the extent to which a selection tool, method, or procedure can produce consistent, replicable results over time and across situations.

• There are numerous laws and regulations governing HR practices, including selection. While employee selection methods attempt to differentiate candidates who possess requisite job skills from those who do not, employers should not treat applicants differently based on discriminatory factors such as gender, reli- gion, race, ethnicity, national origin, age, or disability.

• Ensuring effective selection, organizational, and job fit can have a significant benefit on employee motivation, morale, productivity, and retention. Selecting the right candidates is critical for creating human-based competitive advantage.

Although calculating returns on investment is a complicated task, being able to quantify them in effective selection and other HR practices is an important skill set for HR professionals. This quan- tification can help them learn to speak the same language as the organization’s “C-suite” (senior management and decision makers at the strategic level) and its shareholders, whose ultimate goal is to see the impact on the organizational bottom line. For example, when HR professionals are able to show the dollar-value added of adopting more valid and reliable selection procedures, these investments can be more readily compared with other more tangible investments such as those in buildings, machinery, equipment, or technology. This calculation increases the likelihood that valu- able HR initiatives can get the resource allocations, funding, and support they need to truly make a difference in achieving strategic organizational goals.

WEB LINK

The Added Value of HR Initiatives: www.hrcosting.com

This free website allows HR professionals to quantify the benefits and costs of numerous HR initia- tives, including enhanced selection tools and procedures. Decision makers can use this website to also conduct what-if analysis and compare alternative HR practices.

you66162_05_ch05_p109-138.indd 134 1/31/12 8:41 AM

CHAPTER 5Key Terms

Key Terms

Age Discrimination in Employment Act (ADEA): A federal law that prohibits discrimi- nation against employees over age 40.

Americans with Disabilities Act (ADA): A law that prohibits discrimination against physically or mentally disabled employees who are otherwise qualified for a job and requires reasonable accommodations for them.

Big Five personality traits: Five recognized individual differences: conscientiousness, extroversion, agreeableness, emotional stability, and openness to experience.

construct validity: The extent to which a selection tool accurately reflects the abstract per- sonal attributes, or constructs, that a tool intends to measure.

content-related validity: The logical connection between the selection procedure and the actual job.

core self-evaluations: A composite of four individual differences: self-esteem, general- ized confidence, neuroticism, and locus of control.

criterion-related validity: The predictive, empirical (number-based) link between a pre- dictor (such as a selection tool, method, or procedure) and an actual measure of job perfor- mance; or the statistical correlation between applicants’ scores on the predictor and their subsequent job performance scores.

disparate impact: An illegal situation where a policy or selection procedure that does not explicitly discriminate against members of a protected class has a discriminatory effect, whether intended or unintended.

disparate treatment: An illegal situation in which an organization explicitly discriminates against an individual based on one of the protected classes.

Employee Polygraph Protection Act: A law that limits the scope of lie detector use and prohibits it as the sole determinant in hiring and firing decisions.

Equal Employment Opportunities Commission (EEOC): An entity that enforces anti- discriminatory laws and facilitates their application in organizations through education and technical assistance.

Equal Pay Act: A law that prohibits pay differentials for equal jobs across genders.

external validity: The generalizability of a selection tool or procedure.

face validity: The subjective impression of how relevant to a job various applicants, orga- nizations, or observers perceive a predictor to be.

Family and Medical Leave Act (FMLA): A law that requires an organization that employs 50 or more workers to grant up to 12 weeks of unpaid leave, for family or medical reasons

you66162_05_ch05_p109-138.indd 135 1/31/12 8:41 AM

CHAPTER 5Key Terms

in any given one-year period, to employees who have worked at the organization for at least one year.

general mental abilities (GMA): Raw intelligence as measured by recognized intelligence quotient (IQ) tests.

hostile work environment: A discriminatory and thus illegal form of harassment where some organizational members create an uncomfortable or offensive environment for oth- ers, causing them undue hardships and hindering their abilities to adequately perform their jobs.

Immigration Reform and Control Act: A law that prohibits hiring illegal aliens.

individual differences: Personal traits that tend to be stable over time and across situations.

National Labor Relations Act (NLRA): A law that legalizes unionization and collective bargaining.

person-job fit: The extent to which the demands of the job are compatible with the capa- bilities of the incumbent and to which the needs or preferences of the incumbent are met by the job.

person-organization fit: The extent of the resemblance between the personal core values and beliefs of individuals and the norms, rules, regulations, and values of the organiza- tions where they work.

positive psychological capital: An individual’s positive psychological state of develop- ment that is characterized by (1) having confidence (self-efficacy) to take on and put in the effort necessary to succeed at challenging tasks; (2) attributing positive reasons and causes (optimism) to succeeding now and in the future; (3) persevering toward goals and, when necessary, redirecting paths to goals (hope) in order to succeed; and (4) when beset by problems and adversity, sustaining and bouncing back and even beyond (resiliency) to attain success.

Pregnancy Discrimination Act: A law that prohibits dismissal of an employee due to pregnancy and ensures job security during maternity leave.

psychological states: Cognitive, affective, and social capabilities that represent openness to growth, development, and change over time and across situations.

quid pro quo: Latin for “this for that”; a discriminatory and thus illegal form of harass- ment where the harassing member of the organization requires the harassed member to exchange sexual favors against his or her will.

reliability: The extent to which the results from a predictor (such as a selection tool, method, or procedure) can be replicated.

reverse discrimination: An illegal practice in which the majority group is discriminated against in favor of a minority group.

you66162_05_ch05_p109-138.indd 136 1/31/12 8:41 AM

CHAPTER 5Critical Thinking Questions

social capital: The value added through interpersonal relationships, interactions, and networking.

Title VII of the Civil Rights Act: A law that prohibits discrimination based on sex, reli- gion, race, ethnicity, or national origin in hiring, promoting, firing, setting wages, testing, training, apprenticeship, and other terms and conditions of employment.

utility analysis: A scientific approach to quantifying the return on investment in effective selection and other HR practices using statistical formulas to calculate these returns over time.

validity: The extent to which a selection tool or procedure can accurately predict subse- quent performance.

Worker Adjustment and Retraining Notification Act (WARN): A law that requires employers to give employees a 60-day notice prior to closedowns or massive layoffs.

Critical Thinking Questions

1. Recent research on “Generation Y” suggests that for individuals of that genera- tion fit with the group is more important than fit with the organization. Do you believe this to be true? Why or why not?

2. If you have a selection method that is highly valid in predicting job performance but also yields high disparate impact, although the organization may be able to legally defend this method, should it continue to use it? Are there circumstances when it would be more or less acceptable to use it?

3. Does “face validity” really matter? Why or why not should an organization concern itself with face validity if it doesn’t have to? Should an organization be willing to trade off other types of validity to have face validity?

4. Despite being less valid in predicting job performance, both hiring managers and applicants prefer unstructured interviews over structured interviews. Why do you think this is the case?

5. A valid selection tool must be reliable, but a reliable selection tool isn’t necessar- ily valid. Why is this the case?

you66162_05_ch05_p109-138.indd 137 1/31/12 8:41 AM

you66162_05_ch05_p109-138.indd 138 1/31/12 8:41 AM