MANA 4328 Dennis C. Veit dveit@uta.edu Hiring Decisions MANA 4328 Dennis C. Veit dveit@uta.edu 1

Final Selection Top Down Selection (Rank) vs. Cutoff scores Is the predictor linearly related to performance? How reliable are the tests? Top-down method – Rank order Minimum cutoffs – Passing Scores

Final Decision Random Selection Ranking Grouping Role of Discretion or “Gut Feeling”

Types of Contracts Legal Psychological Employment contract Employment-at-will Psychological An implied contract Employee promises: Hard work, extra effort, commitment to company goals. Employee expects in return: Job security, fair treatment, development, pay and benefits.

Employment-at-will VS. Employment Contract

Employment-at-will Employment Contract Employer not obligated to retain for specific time Termination for any legitimate reason without liability Disclaimers in applications and offer letter Employment Contract Employment for a definite period of time Entitlements for compensation / benefits

Offer Letter Legal document Attraction tool Should be carefully worded Creates obligations (intended or unintended) Letter from HR or legal Attraction tool Final incentive for prospective hire Should make new employee feel welcome Letter from manager or company president

Job Offer Content Start date Usually allows notice for previous employer Benefits Usually a blanket statement and refer to HR documents Conditions of employment Reference checks, drug screen, I-9, medical exam etc. Other conditions Confidentiality / Non-compete / Arbitration Working hours Acceptance date

Job Offer Content Base compensation Based on payroll schedule rather than annual salary Payment schedule (especially if monthly) FLSA designation Bonuses As specific as possible including dates and criteria Stock options Consult an expert Grant price / criteria / vesting / contingencies

Job Offer Content Integration clause Employment-at-will disclaimer Letter contains all terms and conditions Letter supercedes all other documents or conversations Employment-at-will disclaimer Employment is not for a specific duration Employment terminable by either party at any time Include the “magic words” but don’t go overboard

Responses Yes No Maybe / More time.... Follow immediately with positive communication Instructions for start day (when, where, etc) No Try to find out why Working conditions vs. $$$ Maybe / More time.... Find out when Answer any questions

Those Not Selected Maintain positive relations with fair treatment Inform promptly Thank them for applying and acknowledge the effort Tell 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.”

Managing Retention Cost of turnover and replacement Types of Turnover Involuntary turnover Voluntary turnover out of company control Voluntary turnover that company can control Turnover and performance Increases costs Decreases productivity Positive vs. Negative Turnover

Analyzing Turnover Diagnosing retention problems Active: Employee surveys Active: Exit interviews Passive: Research and HRIS data mining How much is too much turnover? Depends on the organization Depends on the position

Why Do People Leave?

Why Do People Leave? Desirability of Leaving General Ease of Leaving Job satisfaction “Shocks” Switching costs Career progression General Ease of Leaving Labor market conditions Human capital (education and training) Job offers