CHAPTER 6: PERSONNEL SELECTION AND PLACEMENT

Learning Objectives
After studying this chapter you should be able to:

1. Establish the basic scientific properties of selection methods— reliability, validity, and
generalizability.
2. Discuss how the particular characteristics of a job, organization, or applicant affect the
utility of any test.
3. Describe the government’s role in personnel selection decisions, particularly in the
areas of constitutional law, federal laws, executive orders, and judicial precedent.
4. List the common methods used in selecting human resources.
5. Describe the degree to which each of the common methods used in selecting human
resources meets the demands of reliability, validity, generalizability, utility, and legality.

I. Introduction

The chapter will familiarize students with ways to minimize errors in employee selection
and placement and by doing so, to improve the organization’s competitive position. Five
selection method standards will be discussed: reliability, validity, generalizability, utility
and legality.

II. Selection Method Standards

A. Reliability is the degree to which a measure of physical or cognitive abilities, or

traits, is free from random error. If a measure of a stable characteristic is reliable, the
score a person receives will be consistent over time and over different contexts.
Reliability is a necessary but insufficient characteristic of a good measuring device
(See Figure 6.1ab and TM 6.1ab).

1. The concept of reliability is demonstrated by measuring height at different times.

Even though height is supposedly a stable characteristic, slightly different results
are generated every time height is measured. Each measurement is then
composed of “true height” and “error of measurement.” The average of all the
errors (ignoring the positive or negative value) is referred to as the reliability of
measurement.

a. The correlation coefficient is a measure of the degree to which two sets of

numbers are related. The correlation coefficient expresses the strength of the
relationship in numerical form. A perfect positive relationship equals +1.0; a
perfect negative relationship equals –1.0.

b. When assessing the reliability of a measure, we might be interested in

knowing how scores on the measure at one time relate to scores on the same
measure at another time. This is what is called assessing test-retest
reliability.
 c. The consistency of multiple-items or scales can also be assessed via split-half
reliability estimates.

d. Reliability can also be assessed via inter-rater reliability estimates. In this

method, two different human judges rate the person on the dimension of
interest, and we then correlate the separate opinions of the two judges.

2. Standards for Reliability—Clearly, the more reliable the measure, the more likely
decisions can be made on score differences. However, the actual score and the
standard error of the measure have an impact on the ability to make a decision on
the meaning of scores.

B. Validity is the extent to which performance on the measure is associated with

performance on the job (this definition assumes criterion-related validity). Criterion-
related validation is demonstrated by a correlation coefficient that indicates a
significant relationship between scores on the selection measure and job performance
scores.

1. There are two types of criterion-related validity: Predictive validation is an

empirical relationship between scores on the selection measure taken prior to
persons being hired and, after roughly six months or more, their job performance
scores. Concurrent validation is an empirical relationship between scores on
the selection measure given to current employees and their job performance
scores (processes are compared in Figure 6.3 and TM6.2).

Predictive validation is superior to concurrent validation since job applicants will

be more motivated to do well on the test than job incumbents will. Also, current
employees have learned on the job, and current employees tend to be
homogeneous, which will lead to restriction of range and a lower correlation.

2. Satisfactory levels of validity are typically defined by statistical significance

(text Table 6.1).

3. Content validation is the use of expert judgment to determine whether test items
are a representative sample of the kinds of items, situations, or problems that
occur on the job. One means to quantify the degree of content validity is to use a
content-validation ratio (CVR), in which multiple judges determine whether
items are essential or nonessential. The results are placed in a formula and rested
for statistical significance. Limitations of content validation are that it is not used
in situations when the person learns to do the job after he or she is hired and
judges’ ratings are made in reference to concrete behaviors; therefore, content
validation is not appropriate when more abstract traits of individuals are being
measured. (Table 6.2 shows the level of CVR needed to achieve statistical
significance.)

C. Generalizability is the degree to which the validity of a selection method established

in one context extends to other contexts such as different situations, different samples
of people, and different rime periods.

1. It was believed that validity coefficients were situationally specific—that is, the
correlation between test and job performance would vary across organizations.
 Research results suggest this is not the case and that tests such as cognitive
ability show similar levels of correlation across jobs that are somewhat similar.
The more complex the job, typically the higher the validity.

2. It was also believed that tests showed differential subgroup validity, which meant
that validity coefficients were different for people of different races or sex.
Research suggests that there are very similar levels of correlations across
different groups of people.

3. Validity generalization is a process that determines whether a given selection

technique (that has proven valid in another context for a specific job) is valid in
another context where the job is very similar. The selection technique may be
used in the different context without validating in the new context. Although
there is evidence that supports the generalizability of many kinds of tests across
situations and subgroups, there does not appear to be evidence that generalization
can be done across time. In fact, it seems that correlations decrease as time
Intervals increase.

D. Utility is the degree to which the information provided by selection techniques

enhances the effectiveness of selecting personnel in organizations. Utility is impacted
by reliability, validity, and generalizability. Other factors will influence utility even
when the latter is constant. For example, the selection ratio, which is the percentage
of people selected versus the total number of applicants, will impact utility as well as
the number of people selected (more people increase utility), race of employee
turnover, and level of performance among chose who leave (to increase utility,
turnover should be low with those leaving in low-performance categories). See
Figure 6.4 ab and TM 6.3.

E. Legality—All selection methods must conform to existing laws and legal precedents
(Chapter 4 discusses these issues). The text provides an example of an angry person
who feels discriminated against and how the person could attempt to rectify the
situation.

1. Federal Legislation—The Civil Rights Act of 1991 (an extension of the Civil
Rights Act of 1964) protects individuals from discrimination based on race, color,
sex, religion, and national origin. The 1991 act differs from the 1964 act in three
different areas:

a. It codifies employers’ explicit obligation to establish the business necessity

of any neutral-appearing selection method that has an adverse impact on
protected groups.

b. It allows the individual filing the complaint to have a jury decide whether he
or she may recover punitive damages in addition to lost wages and benefits
for emotional injuries caused by the discrimination.

c. It explicitly prevents the use of race norming as a means of giving

preferential treatment to protected groups.

2. The Age Discrimination Act or 1967 covers individuals who are between the ages
of 40 and 69. Litigation related to this act has surged because of the general aging
 of the work force and downsizing. A 200 percent increase in litigation took place
between 1991 and 1995. There is no protection for younger workers, and
therefore there is no case for reverse discrimination. There are provisions for jury
trials and punitive damages.

3. The Americans with Disabilities Act of 1991 protects individuals with physical or
mental disabilities:

a. “Reasonable accommodations” are required by the organization to allow the

disabled to perform essential functions of the job. Examples of
accommodations include restructuring jobs, modifying work schedules,
making facilities accessible, providing readers, and modifying equipment. An
employer need not make accommodations that cause undue hardship such as
undue cost or danger to the safety of other employees.

b. There are restrictions on preemployment inquiries, such as asking if a person

has a disability or requiring a medical examination prior to a job offer. (See
“Additional Activities” for student involvement suggestions.)

4. Executive orders relate to businesses that have government contracts with the
federal government. Executive Order 11246 parallels the Civil Rights Act of
1964 but goes beyond it by (a) requiring affirmative action to hire qualified
protected group applicants and (b) allowing the government to suspend all busi-
ness with a contractor while an investigation is going on. The Office of Federal
Contract Compliance (OFCC) issues guidelines and monitors compliance.

III. Types of Selection Methods

A. Selection interviews are defined as a dialogue initiated by one or more persons to

gather information and evaluate the qualifications of an applicant for employment. It
is the most widely used selection method, although research suggests it can be low in
reliability and validity. Face validity can also be low since highly subjective
interviews may upset candidates. The Supreme Court ruled in Watson v. Fort Worth
Bank and Trust that interviews should he validated with criteria-related or content-
validation procedures.

The utility of an interview can be increased by the following suggestions:

1. Interviews should be structured, standardized, and focused on accomplishing a

small number of goals oriented to skills and behaviors that are observable.

2. Ask questions that force the applicant to display job-required behaviors or

knowledge (situational interview items). Table 6.3 contains example items.

3. Use multiple, trained interviewers who can avoid personal bias.

B. References and biographical data gather background information on candidates.

These techniques are, at best, weak predictors of future job success. Typically,
references are very positive since only those who the applicants know will give a
good reference are asked to do so, and there is a fear of being sued for libel if a bad
reference is given. Over 10,000 such suits have been filed since 1983. In 70 percent
 of these cases, the recipient of the bad reference prevails, and the average award is
over $500,000. Evidence on the utility of biographical information is more positive,
particularly for clerical and sales jobs. Information is typically gathered via
questionnaires

C. Physical ability tests may be relevant for predicting not only job performance but
occupational injuries and disabilities as well. Criterion-related validities tend to be
quite strong, although adverse impact on the disabled and women is highly possible.
The test, if demonstrably valid, can be used when evidence exists for physical ability
being necessary for job performance and that failure to possess physical abilities
could lead to risk of safety and health to the applicant, co-workers, or clients.

D. Cognitive ability tests differentiate candidates on mental ability. Commercial tests

are available that tend to be highly reliable and valid in predicting job performance.
Although cognitive ability tests tend to be more valid for complex jobs,
generalizability across different jobs and their relatively low cost make them one of
the most useful selection methods. They often however, have an adverse impact on
blacks, although differences appear to be declining (text Figure 6.5 charts the trend).
The abilities most commonly assessed (these can be combined in one score or used
separately) are the following:

1. Verbal comprehension refers to the ability to understand and use written and
spoken language.

2. Quantitative ability involves speed and accuracy in solving arithmetic

problems.

3. Reasoning ability involves the capacity to invent solutions to many diverse

problems.

E. Personality inventories categorize individuals by their personality characteristics.

Common dimensions assessed are extroversion, adjustment, agreeableness,
conscientiousness, and inquisitiveness (text Table 6.4 and TM 6.5 list corresponding
adjectives for these dimensions). Evidence for validity and generalizability of these
selection methods is low. Job-relatedness is a critical concern.

F. Work samples, such as typing rests, simulate the job. Work samples are job-specific
and tend to be high in criterion-related and content validity and low in adverse
impact. The disadvantages are that generalizability tends to be low, and they are
relatively expensive to develop. The technique used in managerial selection is the
assessment center, which uses a wide variety of multiple selection methods to rate
applicants or job incumbents on their managerial potential. Validity tends to be quite
high.

G. Honesty tests and drug tests—The Polygraph Act of 1988 banned the use of
polygraph tests for private companies except pharmaceutical and security guard
suppliers. Paper-and-pencil honesty testing attempts to assess the likelihood that
employees will steal. Since these tests are new, there is little evidence on their
effectiveness. Table 6.5 contains some sample items.
 1. The major controversies are whether drug tests represent an invasion of privacy,
an unreasonable search and seizure. or a violation of due process. At this point,
there has not been much legislation or litigation.

2. These tests should be administered systematically to all applicants applying for

the same job, and testing is likely to be more defensible when there are safety
hazards associated with the failure to perform. Test results should be reported to
the applicant, who should have an opportunity to appeal and be retested. If
current employees are tested, there should be a rehabilitation process available.

(Table 6.6 in the text provides a summary of personnel selection methods and
their reliability, validity, generalizability, utility, and legality.)

Chapter Vocabulary
Reliability, Reliability of Measurement, Validity, Criterion-related Validity, Predictive
Validation, Concurrent Validation, Content Validation, Content-Validation Ratio,
Generalizability, Utility, Selection Ratio, Selection Interviews, Watson v. Fort Worth Bank and
Trust, References and Biographical Data, Physical Ability Tests, Cognitive Ability Tests,
Verbal Comprehension, Quantitative Ability, Reasoning Ability, Personality Inventories, Work
Samples, Honesty Tests and Drug Tests, Assessment Center
Discussion Questions
1. We examined nine different types of selection methods in this chapter. Assume that
you were just rejected for a job based on one of these nine methods. Obviously, you might
be disappointed and angry regardless of what method was used to make this decision, but
can you think of two or three methods that might leave you most distressed? In general,
why might the acceptability of the test to applicants be an important standard to add to the
five we discussed in this chapter?
2. Some have speculated that in addition to increasing the validity of decisions,
employing rigorous selection methods has symbolic value for organizations. What message
is sent to applicants about the organization through hiring practices, and how might this
message be reinforced by recruitment programs that occur before selection and training
programs that occur after selection?