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Chapter 5: Personnel Decisions

Learning Objectives

• Explain the social and legal context for personnel decisions.

• Describe the process of personnel recruitment and affirmative action.

• Understand the statistical concepts of regression analysis and multiple regression analysis.

• Explain the concept and significance of validity generalization.

• Describe the selection of employees and the process of assessing job applicants.

• Identify issues pertaining to the determination of the passing score.

• Explain the concept and significance of test utility related to organizational efficiency.

• Describe the personnel functions of placement and classification.

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Chapter Summary

• Personnel decisions are decisions made in organizations that affect people’s work lives, such as selection, placement, and discharge.

• All business organizations must make personnel decisions about their employees. Some organizations use less formal and scientifically based methods than others.

• In the United States (and in most countries) personnel decisions are made within a strong legal context. Many laws protect the rights of individuals as employees.

• Affirmative action is a social policy designed to achieve a diverse and productive workforce. There is much controversy and social debate about the merits of affirmative action.

• Recruitment is the process by which individuals are encouraged to apply for work. The individuals selected for employment can be drawn only from those who have applied.

• Two statistical procedures, regression and multiple regression analysis, are useful for making personnel selection decisions.

• Validity generalization is the principle that the predictive capacity of a test generalizes or is applicable to a wide range of job applicants and employment contexts.

• Because our tests do not have perfect validity, errors or mistakes in hiring occur. We can falsely hire a poor employee or falsely reject someone who would have been a good employee. True positives and negatives and false positives and negatives are useful concepts to consider in selection decisions.

• It has been demonstrated that using valid personnel selection methods leads to large productivity gains for the hiring organization.

• Placement and classification decisions refer to assigning workers to those jobs for which they are best suited.