Selection Decisions

MANA 5341

Dr. George Benson

benson@uta.edu

Selection Decisions

First, how to deal with multiple predictors?

Second, how to make a final decision?

Dealing With Multiple Predictors

“Mechanical” techniques superior to judgment

Combine predictors (Compensatory) Sum total – Unit weightingWeighting predictors – Rational weightingRankingProfile matching

Judge each independentlyMultiple Hurdles / Multiple Cutoff

Hybrid selection systems

Compensatory Methods

Unit weightingP1 + P2 + P3 + P4 = Score

Rational weighting(.10) P1 + (.30) P2 + (.40) P3 + (.20) P4 = Score

RankingRankP1 + RankP2 +RankP3 + RankP4 = Score

Profile MatchingD2 = Σ (P(ideal) – P(applicant))2

Combined Selection Model

Selection Stage

Selection Test

Decision

ModelApplicants Candidates

Application Blank Minimum Qualification

Hurdle

Candidates Finalists

Four Ability Tests

Work Sample

Rational Weighting

Hurdle

Finalists Offers

Structured Interview

Unit Weighting

Rank Order

Offers

Hires

Drug Screen

Final Interview

Hurdle

Final Selection

Top Down Selection (Rank) vs. Cutoff scores Is the predictor linearly related to performance? How reliable are the tests?

1. Top-down method – Rank order

2. Minimum cutoffs – Passing Scores

Setting Cutoff Scores

Based on the percentage of applicants you need to hire (yield ratio). “Thorndike’s predicted yield”You need 5 warehouse clerks and expect 50 to apply.

5 / 50 = .10 (10%) means 90% of applicants rejectedCutoff Score set at 90th percentileZ score 1 = 84th percentile

Based on a minimum proficiency scoreBased on validation study linked to job analysis Incorporates SEM (validity and reliability)

Selection Outcomes

PREDICTION

PERFORMANCE

No Pass Pass

Regression LineCut Score

90% Percentile

Selection Outcomes

PREDICTIONPREDICTION

High Performer

Low Performer

True Positive

True Negative

Type 2 ErrorFalse

Positive

Type 1 ErrorFalse

Negative

PERFORMANCEPERFORMANCE

No Hire Hire

Selection Outcomes: Normal Case

PREDICTION

High Performer

Low Performer

PERFORMANCE

Unqualified Qualified

Regression Line

Cut Score

Selection Outcomes: High Risk

PREDICTION

Acceptable

Unacceptable

PERFORMANCE

Unqualified Qualified

Regression LineCut Score

Banding

Function of test reliability

Standard Error of MeasureBand of + or – 2 SEM 95% Confidence interval

If the top score on a test is 95 and SEM is 2, then scores between 95 and 91 should be banded together.

Final Decision

Random Selection Ranking Grouping

Role of Discretion or “Gut Feeling”

Hiring

Employment-at-will

VS.

Employment Contract

Hiring

Employment-at-willEmployer not obligated to retain for specific timeTermination for any legitimate reason without liabilityDisclaimers in applications and offer letter

Employment ContractEmployment for a definite period of timeEntitlements for compensation / benefits

Offer Letter

Legal document Should be carefully wordedCreates obligations (intended or unintended)Letter from HR or legal

Attraction toolFinal incentive for prospective hireShould make new employee feel welcomeLetter from manager or company president

Job Offer ContentStart date

Usually allows notice for previous employerBase Compensation and Benefits

Benefits –blanket statement to refer to HR documentsCompensation - payroll schedule not annual rateFLSA designation

Conditions of employmentReference checks, drug screen, I-9, medical exam etc.

Other conditionsConfidentiality / Non-compete / Arbitration

Working hoursAcceptance date

Job Offer ContentIntegration clause

Letter contains all terms and conditionsLetter supercedes all other documents or

conversations

Employment-at-will disclaimerEmployment is not for a specific durationEmployment terminable by either party at any time Include the “magic words” but don’t go overboard

Responses

YesFollow immediately with positive communication Instructions for start day (when, where, etc)

NoTry to find out whyWorking conditions vs. $$$

Maybe / More time....Find out whenAnswer questions

Those Not Selected

Maintain positive relations with fair treatment Inform promptlyThank them for applying and acknowledge the effortTell them they were a finalist with good skills to offer

Most companies do not provide details of decision

Keep applications on file

Notify by mail or by phone for higher jobs

Independent Contractors

“You have been retained as an independent contractor....

....for the XYZ project...

....to be completed by ABC date.”

“As a contractor you are not entitled to any benefits....

....company will not withhold any taxes, FICA or other deductions.”

Independent Contractors

“You will be paid $$$....

....according to this schedule...

....contingent upon....”

“As a contractor you are responsible for all....

....safety equipment and procedures....

....employee liabilities including....”

Managing Retention

Cost of turnover and replacementTypes of Turnover

Involuntary turnoverVoluntary turnover out of company controlVoluntary turnover that company can control

Turnover and performance Increases costsDecreases productivity

Positive vs. Negative Turnover

Analyzing Turnover

Diagnosing retention problemsActive: Employee surveysActive: Exit interviewsPassive: Research and HRIS data mining

How much is too much turnover?Depends on the organizationDepends on the position

Federal Human Capital Survey

34.6% of federal employees said they were considering leaving their jobs. Half of these will retire, half plan to quit.

68 % of workers are satisfied with their jobs64 % are satisfied with their pay65 % are happy with their retirement benefits91 % believe they do important work

Less than 50% are satisfied with recognition for doing a good job30 % saying awards programs provide real motivation.27 % said steps have been taken to deal with poor performers36 % said their leaders generate high levels of motivation among

workers.

HRIS Data Mining

0% 2% 4% 6% 8% 10%

10% Market pay adjustment

Hire 20% more from employee referrals

10% Base pay growth

Transfer within last 2 years

Supervisor did not leave past year

Received bonus last year

Promoted within last year

Percentage Reduction in Turnover

Why Do People Leave?

Desirability of LeavingJob satisfaction “Shocks”Switching costsCareer progression

General Ease of LeavingLabor market conditionsHuman capital (education and training)Job offers