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PERSONNEL DECISIONSPERSONNEL DECISIONS

PSYC 353 11C personnel decisions 11/01/11 [Arthur] 1

Personnel Psychology subfield of I/O psychologyPersonnel Psychology – subfield of I/O psychology focusing on the management of human resources

Recruitment Selection

Training and developmentTeam selection andPlacement

Psychometrics Individual differences

Team selection and trainingLegal issues - Equal Emplo mentIndividual differences

Criterion developmentPerformance appraisal

Employment Opportunity, Title VII, CRA 1991

Performance appraisal


A li t/ l fl th h d i t tiApplicant/employee flow through and interactions with various PERSONNEL systems


• what to do with predictor or test scores now that we have them?that we have them?

• how do we decide who to select or hire?


Overview of selection process

• Several stakeholders in selection processp– I/O psychologists– HR professionalsHR professionals– applicants– legal system (potentially)legal system (potentially)



• I/O Psychologists– determine KSAOs needed

• job analysis

– develop assessment tools• validation studies

d t ff• recommend cutoff scores

– aware of . . .legal context• legal context

• applicant reactions



• HR Professionals– application of assessment tools– make personnel selection decisionsa p o o d o

• social context– organizational image/culture– nepotism

• may deviate from recommendations and best practicespractices



• ApplicantsApplicants– concerned with fairness and outcomes

• face validityface validity• procedural justice

• Legal systemLegal system– enforces Title VII, CRA, ADA/ADAA, ADEA


Selection decisions

Job analysis

Development of predictors

y

predictors

Validate [& set cutoff]

Assess utility

Examine results


Assess utility

Development of predictors

• Determine the KSAOs to be assessed and method of assessmentand method of assessment

• Conduct validation studycontent related validation study– content-related validation study• focus on extent to which test samples or

represents the domain of interestrepresents the domain of interest

– criterion-related validation study• focus on empirical relationship between p p

predictor and criterion– requires incumbent predictor and criterion data

t t l t d lid ti t dPSYC 353 11C personnel decisions 11/01/11 [Arthur] 10

– construct-related validation study

Multiple regression

• one predictor– Y = a + bX

Y = predicted criterion scorea = intercept; a constanta = intercept; a constantb = slope; weight associated with the predictor score based on the correlation with the criterion

– examplea = 50; b = .50

( )Y = 50 + .50 (X)


Multiple regression

Y = job performance

X1 = programming skills


Multiple regression

Y = job performance

X1 = cognitive abilityX2 = agreeableness


Multiple regression

• Y = a + b1X1 + b2X2 + . . . bnXn• use multiple predictors in test battery touse multiple predictors in test battery to

account for more variance• predictors that correlate with criterion but p

NOT with each other• incremental validityy


Multiple regression

Example of Hypothetical Predictor/Criterion Correlation Matrix

Measure Mean SD 1. 2. 3. 4. 5. 6. 7. 8.

1. Verbal Ability 43.57 9.84 .85

2. Math Ability 22.36 4.98 .22* .89

3. GMA 65.93 11.97 .91* .60* .91

4. Conscientiousness 5.36 0.79 .31* .33* .39* .91

5. Extraversion 37.20 6.88 -.02 .06 .01 .02 .77

6. Interpersonal skills 8.27 1.20 .08 .02 .07 .17* .09* .87

7. Leadership 17.48 3.16 .12* .16* .17* .08 .22* -.01 .86

8 Performance 4 91 0 98 10* 14* 14* 25* 21* 15* 32* 888. Performance 4.91 0.98 .10 .14 .14 .25 .21 .15 .32 .88


Cross-validation

• Because of changes due to time, people, situations, and criteria, it is essential to make an independent check on the validity of measures used for predictivecheck on the validity of measures used for predictive purposes.

empiricalp– derivation sample– cross-validation sample

statistical estimationstatistical estimation


Cutoff scores

• Type of cutoff score depends on . . .– validation study type

• content- versus criterion-related validation studystudy

– frame-of-reference• norm referenced• norm-referenced

– cutoff score is dependent on sample

• criterion-referenced– cutoff score is independent of sample


Cutoff scores

Classification of Major Cutoff Score Methods


Cutoff scores

• norm-referencednorm referencedmeanstandard deviationpercentilebase-rate

• criterion-referencedregression [ X = (Y – a) ÷ b ]70%Angoff procedure


Cutoff scores

• Base rate: proportion of employees who are successfully performingy p gthe job

• Regression: X = (Y – a) ÷ b

• Angoff: average item probability that a minimally competent g g p y y pperson would answer the item correctly


Cutoff scores

• bandinga group of scores are considered equivalent and not g p qdifferentiated between when making a selection decisionbased on the premise that reliability of test scores is NOT perfectpcalculated from the standard error of measurement (which is based on the reliability of the test scores)can be fixed or slidingcan be fixed or sliding


Cutoff scores

• once cutoff scores have been set, then what?

rank and select top downrandom

th ?any others?


Selection Decisions Outcomes and SomeSelection decision outcomes

Selection Decisions, Outcomes, and Some Factors That Influence Them


Selection decisions

• classification outcomesA = true positivesB = true negativesC = false negativesgD = false positives

• costs associated with classification• costs associated with classification errors?


Selection decisions

• classification decisions are influenced by:y

selection ratio (# openings ÷ # applicants)cutoff score (predictor)cutoff score (predictor)base rate (criterion “cutoff”)test validitytest validity


Selection Decisions Outcomes and SomeSelection decisions – predictor cutoff

Selection Decisions, Outcomes, and Some Factors That Influence Them


Selection decisions – predictor cutoff

P1


Selection decisions – predictor cutoff

P2


Selection decisions – base rate

C1


Selection decisions – base rate

C2


Selection decisions – test validity

10

7 5

10

ce

2 5

7.5

perf

orm

anc

0

2.5

Job

060 65 70 75

Cognitive ability


Selection decisions

Strategies for Making Selection Decisions

• multiple regression approach• multiple regression approach• multiple cutoff approach

lti l h dl h• multiple hurdle approach

• characteristics?


Utility AnalysisUtility Analysis

• value of personnel decisions to the organizationorganization

• determined by:lidit f th di tvalidity of the predictor

cost to administer the predictor# of people who do the job# of people who do the job# of people hired each yeartypical tenure in the jobtypical tenure in the job


Utility analysis

∆U = (NS × T × SDy × rxy × Zx) – (NA × C)

• ∆U = increase in average dollar-valued payoff resultingfrom use of selection procedure over randomselection

• T = expected tenure of selected group• rxy = correlation between selection procedure scores and

criterion scores (validity of test)criterion scores (validity of test)• SDy= standard deviation of dollar-valued job performance• Zx = average standard predictor score of selected groupx g p g p• NS = number of applicants selected• NA = number of applicants testedC t f t ti li t


• C = cost of testing one applicant

Utility analysis

• High Performance Work Systemsselective staffingselective staffingcomprehensive trainingdevelopmental performance appraisaldevelopmental performance appraisalequitable reward systemsperformance based payperformance-based pay


Legal Issues

Legal issues

Legal Issues

1964 Civil Rights Act (Title VII) and CRA 1991g ( )• cannot make employment-related decisions on basis of

protected class status/variable• protected classes race sex religion color and national• protected classes race, sex, religion, color, and national

origin• “employment-related decisions” covers all personnel

decisions such as selection training promotion retentiondecisions such as selection, training, promotion, retention, and performance appraisal


Legal issues

• CRA 1991 explicitly prohibits test score adjustments

• Equal Employment Opportunity Commission (EEOC)


Legal issues

Theories of discrimination• disparate treatmentp• disparate impact (adverse impact)

4/5th or 80% rulesignificance testssignificance tests


Legal issues — disparate impact

S

• 80% rule

Sex

Male FemaleApply 100 200Apply 100 200

Hire 20 180

Selection rate 20% 90%Selection rate 20% 90%

d i t 20 90 22%• adverse impact = 20 ÷ 90 = 22%

• < 80% so have adverse impact


Legal issues — disparate impact

Legal defenses to adverse impact• job-relatedness (i.e., validity)j ( , y)• bona fide occupational qualification (BFOQ)• business necessity


Legal issues

Major Court Cases• Griggs v Duke Power Company (1971)• Griggs v. Duke Power Company (1971)

– burden of proof on defendant not plaintiff• Albemarle Paper Company v. Moody (1975)

– job analysis– job analysis• Bakke v. University of California (1978)

– “reverse” discrimination• Watson v Fort Worth Bank & Trust (1988)• Watson v. Fort Worth Bank & Trust (1988)

– what is a “test” interviews– cost of alternative predictors can be a consideration

• Wards Cove Packing Company v Antonio (1989)• Wards Cove Packing Company v. Antonio (1989)– modified burden of proof guidelines; served as impetus for

CRA 1991


Legal issues

1967 Age Discrimination in Employment Act (ADEA)Act (ADEA)• employees 40 yrs of age and older• prevent older employees from being singledprevent older employees from being singled

out during cutbacks• 1990 Older Workers Benefit Protection Act


1990 A i ith Di biliti A t (ADA

Legal issues

1990 Americans with Disabilities Act (ADA; ADAAA)• 43 million Americans have a disability• 43 million Americans have a disability• disability physical or mental impairment

that limits one or more “major life activity”• prohibits discriminating against “qualified

individuals” (can perform “essential” functions)functions)

• provide reasonable accommodations• employers with 15 or more employees• up to $300,000 in compensatory & punitive

damages


Legal issues

Affirmative Action• NOT a psychometric issuep y• social policy aimed at reducing the effects of prior

discrimination• although EEOC guidelines stipulate that only govt• although EEOC guidelines stipulate that only govt

employers and govt contractors must have written affirmative action policies, many private sector employers do so as wellemployers do so as well

believe it makes good business sense• 3 Goals

correct past inequitiescompensate past inequities [court ordered and supervised]promote diversity


• NOT quotas

Legal issues

Types or levels of affirmative action• recruitment• removing discriminatory obstacles• soft preferential treatment

h d f i l (ill l)• hard preferential treatment (illegal)• diversity [targeted recruitment]


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