Mgmt Staffing Prof. Howard Miller

Staffing Function  Among several human resource functions  Benefits  Compensation  Safety  Labor Relations  Training

Staffing...  Involves getting people in, or out, of a company  We’ll concentrate on the “getting people in” part

Staffing has 2 main purposes  “Get the best talent” for the firm at the price we can offer  Conform to national, state and local regulations concerning staffing practice, or in short “keep it legal”

How to Staff?  Derive “demand for labor”  Update job requirement information  Identify knowledge, skills and abilities required for success on job  Develop measures of job-related KSA’s  Recruit from relevant labor markets  Screen using “valid” tests  Make offer, provide orientation to accepts

Staffing Project Steps  Choose job to study  Find real setting to perform job analysis  Perform job analysis  Develop job description, job specification  Find/develop tests to measure job specifications  Identify “Relevant” labor markets  Define recruiting methods  Spell out hiring process to client in full detail

What do you mean “valid test”? * Note importance of Supreme Court case Watson v. Ft Worth Bank and Trust (1988) Supreme court states (paraphrasing): “A test is any hurdle you have to clear to get a job” - especially important for interviewing, which was at core of case * A “valid test” is a hurdle that allows better talent to get over, while lesser talent is screened out

How do we establish if a test is “valid”  Note importance of “The Uniform Guidelines for Employee Selection Procedures” (1978) Uniform Guidelines link Uniform Guidelines link  Three methods recognized by courts – “Content validation” “Criterion-related validation” “Construct validation”

The logic of hiring validity illustrated  Consider classic payoff matrix, which we’ll label “selection decision matrix” in our setting.  Good decisions result when applicants who will succeed are hired (“true positive”), and applicants who will not succeed are rejected (“true negative”)  Bad decisions involve rejecting people who will work out (“false negative), and accepting those who don’t work out (“false positive”)

Selection Decision Matrix

Content validation …  A logical analysis by subject matter experts (SME’s) of the overlap between the content of screening tests and the content of job requirements  Note the deceptive simplicity of the requirements for a typist at the university

Criterion-related validation  The main way it’s done  2 types: Predictive Validation and Concurrent Validation  Predictive uses test data from applicants, and job performance data from those hired  Concurrent uses both test and performance data from current employees

Construct Validation...  More complex than the other two  One has to show that measures of applicant traits and job performance really measure those things (Classic construct validation)  AND then show trait measures correlate with job performance measures

the vast majority of the time we’ll be referring to “concurrent, criterion- related validity evidence” because of it’s overwhelming use

Valid tests mean lower error rates in hiring decisions  More true positives and negatives  Fewer false positives and negatives  Lower exposure to successful litigation  Higher “utility” of the staffing function

Research on validity tells us what works!  Find tests that are shown to be valid  How is this done?  Within the “concurrent, criterion-related validation” approach, it means showing a significant correlation between test scores and job performance scores – the essence of a concurrent validity study.

What would such validation data look like?  See “Ma and Pa Consumer Electronics Store” data set illustration  Ma and Pa Consumer Electronics Data Set 1.xls Ma and Pa Consumer Electronics Data Set 1.xls

Valid Hiring Tests  A hiring test – anything you must get through to get the job  A “Valid” hiring test – one where applicants who score better on the test do a better job if hired  In criterion-related empirical test validation, it is one where there is a “significant correlation between hiring test scores and job performance scores”

Empirical validation  Obtain a representative sample of people  Have them take the hiring test(s), and measure their job performance  Compute the statistical correlation of hiring test scores and job performance scores  Compute the “statistical significance” of the sample correlation  If “significant”, cross-validate in new sample  If correlation remains significant, put test(s) into use

Some key statistical concepts  “Mean” the average score for a group of people  “Standard Deviation” the average variability around the average score for a group of people  “Correlation” a number that reveals the degree of linear association between hiring test scores and job performance scores

Correlation properties  Correlation is notated with lower case “r”  It can range in value from to  r=0 means “zero” correlation, no linear association between the test (x) and job performance (y) – that’s not happy  r=+1.00 (or r= -1.00) means there is a perfect association of hiring test and job performance - doesn’t happen in reality, tho’ we’d love it if it did!  Correlations from real samples RARELY exceed values of r=.50

More on correlation  Correlation can be used to “summarize” the pattern in a 2-variable scatterplot, like the hiring test (x axis) versus job performance (y axis) scatterplot  In this application, correlation is a special case of linear regression – using a straight line to summarize what’s happening in a data set  Plot interview score against job performance in the Ma and Pa data set

Statistical analysis of interviews in relation to monthly sales  Compute the correlation of hiring test scores with job performance scores  Compute the regression of job performance scores (Y) on hiring test scores (X)

Things to do  Review material covered, so you ace the quiz next week  Read the “legal” chapter in GFB  Read the “Uniform Guidelines”  Find a company/organization where you can perform job analysis on real job