Staffing I.Human Resource Forecasting II.Employee Recruiting III. Employee Selection

I. Human Resource Forecasting Topics 1. Benefits of HR Forecasting 2. Demand Forecasting 3. Supply Forecasting 4. Balancing Supply and Demand

1. Benefits of HR Forecasting 1. Prevent understaffing and disruption to operations. 2. Prevent overstaffing and subsequent costs of employee layoff. 3. Allow efficient and effective use of other HR functions, such as: Provide lead time to optimize recruiting. Provide larger applicant pools to achieve optimal selection ratio. Provide optimal number of new hires for training programs. Prevent wage inflation resulting from crisis hiring. 1. Benefits of HR Forecasting

Selection Ratio The percentage of applicants who are offered a job. The smaller the selection ratio, the higher the selection “hit rate” – i.e., the percent of those hired who turn out to be acceptable employees.

2. Demand Forecasting A. Judgmental B. Mathematical C. Statistical 2. Demand Forecasting

A. Judgmental Forecasting Conducting surveys of operating managers to estimate the number of employees needed to support current and future operations. Best for small and medium sized organizations.

B. Mathematical Forecasting 1. Productivity Ratio Average Sales in Past Five Years ($500,000) ÷ Average Number of Operational Employees (200) = $2,500 Sales per Employee

2. Staffing Ratio Average Number of Operational Employees (200) ÷ Average Number of Support Employees (40) = 5 to 1 (Five operational employees to each support (i.e., staff) employee.) Therefore, if 220 Operational Employees are needed, 220 ÷ 5 = 44 Support Employees will be required.

C. Statistical Forecasting (Correlation-Regression Analysis) Y = a + b (X) Number of Sales Volume per Year (x) Employees (y) $500, $560, $600, $620, $680, $720, $740, $760,000

3. Supply Forecasting (Transition Probability Matrix) ProductionClericalMaintenanceSupervisorsQuit Production Clerical Maintenan ce Supervisor s Supply Supply Forecasting

4. Balancing Supply and Demand (See Figure 5.1) Demand Exceeds Supply Transfer and retrain Promotion from within Overtime Subcontracting Part time and temps Recruit from outside Supply Exceeds Demand Reduced hours Work sharing Voluntary retirements Inducement to quit Pay freeze or cut Layoffs 4. Balancing Supply and Demand (See Figure 5.1)

II. Employee Recruiting Topics 1. Purposes of recruiting. 2. Filling vacancies from inside vs. outside. 3. Realistic job preview (RJP). 4. Pros and cons of recruiting methods.

1. Purposes of Recruiting 1.Attract a sufficient number of applicants to allow an optimal selection ratio. 2.Aid in meeting EEO and diversity goals. 3.Maintain goodwill and positive image of the company. 1. Purposes of Recruiting

2. Filling Vacancies from Within Pros  Familiarity may increase selection accuracy.  Employee motivation to perform well and develop skills.  Quicker and lower staffing costs.  Lower training and adjustment costs. Cons Current employees may not be prepared. May lead to a “ripple effect”, which increases staffing costs. May lower the influx of new ideas and innovation. May hinder diversity goals. 2. Filling Vacancies from Within

Filling Vacancies from Outside. Pros  Larger number of applicants lowers selection ratio and raises hit rate.  Prevent ripple effect.  May increase innovation.  Aid in meeting diversity goals. Cons Increases staffing costs. Increases training and adjustment costs. Takes longer to fill vacancies. May lower employee motivation to perform well and develop skills. Filling Vacancies from Outside

3. Realistic Job Preview (RJP) Recruiting studies have indicated that the more realistic and complete the information provided to applicants, the more likely those hired will be satisfied, acclimated, and feel less stress - leading to better performance, reduced absences, and lower job turnover. 3. Realistic Job Preview (RJP)

Reasons RJP is Beneficial  Employees make better self-selection (i.e., “fit”) decisions because they have complete and relevant information.  Employees are more committed to their decision because they accepted the job based on relevant facts.  Employees have more realistic expectations about the job and organizational culture, which increases post-hire satisfaction.  Employees have better coping ability because they have been informed of both positive and negative aspects of the job and organization. Reasons RJP Is Beneficial

Types of Information Job duties and tasks Qualifications (education, training, and experience) Career opportunities Organizational rewards Employee benefits Organizational goals and culture Types of Presentations Interviews Tours Brochures Videos Question and answer RJP Methodology

4. Recruiting Methods 1. Referrals Employee Referrals Outside Referrals Former Employees 2. Direct Contact Direct Application Professional Conferences Vocational-Trade Schools College Recruiting Internet 3. Agency USES (Public) Commercial Agencies Executive Search 4. Media Newspapers Special Publications 4. Recruiting Methods

3. Employee Selection 1. Measurement Properties a. Reliability b. Validity c. Hit Rate Analysis d. Selection Utility 2. Types of Selection Methods a. What it assesses b. Typical reliability c. Typical validity

1a. Measurement Reliability Consistency with which an instrument assesses the knowledge, skills, or abilities intended. oTest-Retest: Sample of people tested at two different points in time. oParallel Forms: Sample of people tested with two forms of the same instrument. 1a. Measurement Reliability

1b. Measurement Validity Validity is the extent to which a measurement instrument (test, interview, etc.) assesses the psychological or physical property (i.e., knowledge, skill, or ability) that it purports to measure. Types of Validity Evidence 1. Construct 2. Content 3. Criterion (i.e., empirical) 1b. Measurement Validity

1. Construct Validity Evidence Demonstrating through theoretical and research evidence that a particular psychological or physical trait exists apart from other known traits and can be accurately measured. Federal courts have allowed this kind of evidence, called validity generalization, when employers could not conduct their own empirical studies due to inadequate employee samples.

2. Content Validity Evidence Demonstrating that a particular selection method covers (i.e., measures) certain KSAs that have been identified through Job Analysis. This is judgmental evidence and is accepted by the EEOC for validating direct measures of job knowledge or skill – but not abilities, which are considered psychological constructs. KSAs Selection Method

3. Criterion Validity Evidence Requires the employer to conduct an empirical study to demonstrate a statistical correlation between applicant scores on the selection method (x) and scores on subsequent job performance (y). Two types of empirical evidence: Concurrent and Predictive.

1c. Hit Rate Analysis Hit Rate = Percentage of persons hired who turn out to be acceptable job performers. Hit Rate is determined by: Base Rate Percentage of persons in the applicant sample who would be acceptable performers if hired randomly – i.e., not screened in any way. Selection Ratio Percentage of applicants who are hired from the total applicant sample. Selection Validity How accurate the selection method is in predicting which applicants will be good job performers. 1c. Hit Rate Analysis

Hit Rate Graph Selection Scores Job Performance L H H L * * * * * * * * * *

1d. Utility Analysis The annual monetary utility of a selection method is equal to: U = [N*T*V*SDy*Zx] – [N*C] N is number hired each year. T is average tenure. V is validity of the method. SDy is standard deviation in job performance in dollar terms. Zx is the cut-off score on the selection method expressed in standard deviation units. 1d. Selection Utility Analysis The annual monetary value of a selection method is equal to the following:

2. Selection Methods – Pros and Cons See Course Packet and Study Notes. Presented on transparencies! 2. Selection Methods – Pros and Cons