Strategic Staffing Chapter 11 – Choosing and Hiring Candidates Jean Phillips & Stanley Gully Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Learning Objectives After studying this chapter, you should be able to: Describe different ways of combining candidates’ scores on different assessment methods to calculate an overall score. Describe three different ways of making a final choice of whom to hire. Discuss the factors that influence the content of a company’s job offer. Describe the four different job offer strategies. Describe different types of fairness and explain why candidates’ perceptions of fairness are important to staffing. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Combining Assessment Scores When using more than one assessment method, as is usually the case because the validity of the candidate’s assessment is more valid when using multiple predictors, a candidate’s scores must be meaningfully combined to calculate an overall score that can be compared across candidates or to a minimum hiring standard. There are two ways of combining assessment scores: multiple hurdles and compensatory approaches. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Multiple Hurdles Multiple hurdles: candidates must receive a passing score on an assessment before being allowed to continue in the selection process Costly and take more time due to the need for candidates to make repeated visits for the different assessments Used when the cost of poor performance on that characteristic is high For example, when safety is at risk Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Compensatory Approaches Compensatory approach: high scores on some assessments can compensate for low scores on other assessments. This approach is less useful for jobs in which specific talents must exist at a minimum level. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Executing the Compensatory Approach Unit weighting: giving multiple assessments equal weight in computing an overall score Rational weighting: experts assign a different subjective weight to each assessment score Statistical weighting: using a statistical technique, such as multiple regression, to assign a different weight to each assessment score. Multiple regression is the most scientific approach to determining how to weight each assessment in computing a candidate’s overall score. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Unit-Weighted Approach Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Statistical Weighting Approach The output of a multiple regression includes a formula that looks like: Overall score = c + (b1 * a1) + (b2 * a2) + (b3 * a3)… In this formula, c is a constant, the b’s are the statistical weights applied to each assessment method to maximize the validity of the group of assessment methods, and the a’s are a candidate’s scores on each of the assessment methods. Any number of assessment methods can be used. For example, if the regression equation for a salesperson looked like this: Overall score = 24 + (.20 * Cognitive Ability) + (.25 * Interview) + (.15 * Personality) And the candidate’s cognitive ability score was 70, interview score was 75, and personality score was 50, then the candidate’s overall score would be 64.25: 64.25 = 24 + (.2*70) + (.25*75) + (.15*50) Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Statistical Weighting Approach To be most accurate, the statistical approach requires a sample of several hundred or more hires, a low inter-correlation among assessment methods, and a relatively small number of assessment methods. Because the weights can differ when derived from different groups of people, it is best to check the stability of the multiple regression equation in different groups to assess its actual effectiveness. If estimating the regression equation on a large sample size is not possible, unit weighting or even rational weighting may be a better choice. Validity can sometimes be enhanced by combining the multiple regression approach with global expert judgment. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Combining Multiple Hurdles and Compensatory Approaches Often, some job requirements are essential to job performance but others can compensate for each other. A data entry hire may need to type a certain number of words per minute with a minimum number of errors, which would be a minimum hurdle, but cognitive ability and personality may be compensatory factors. A typing test can be used at the beginning of the assessment process as a hurdle to weed out candidates who do not meet the minimum typing requirements, then a compensatory approach balancing cognitive ability and personality used at the end. Scores on cognitive ability and personality would be weighted and combined in a compensatory manner and the highest scoring candidates offered jobs. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Final Choice Cut score: a minimum assessment score that must be met or exceeded to advance to the next assessment phase or to be eligible to receive a job offer. Rank ordering: ranking candidates from highest to lowest scoring. Banding: Everyone who scores within a certain range of scores is considered to have performed equivalently and assigned the same grade. Hiring within the band is done randomly or based on other factors (EEO or affirmative action goals, etc.). Banding allows for the consideration of other factors in making a final choice, including whether an internal candidate is at risk of leaving the company if passed up for a promotion. Band widths are generally calculated on the basis of the standard error of measurement. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Banding Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Final Choice When using cut scores or rank ordering, an additional decision needs to be made about whether to hire from the top of the list down, or to create a pool of finalists from which to make a final choice. This pool of finalists can then be rank ordered based on global or specific assessments, selected from randomly, or banded. There is no one best method of choosing the candidates to whom to extend job offers. Whenever possible, the ability of the assessment scores to predict job success should be carefully evaluated, and cutoff scores should be set high enough to ensure that new hires are likely to meet or exceed minimum standards of success. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Preference for Diversity During Final Choice Affirmative action and diversity programs need to be carefully implemented to avoid the potential for legal trouble. Pursuing diverse hires should not begin during the assessment stage of the hiring process. If qualified diverse candidates do not become part of the applicant pool, no selection system can identify them. If sourcing and recruiting activities identify and attract qualified diverse applicants, then applying a valid assessment system that has little to no adverse impact should generate quality, diverse hires. Successfully attracting qualified diverse applicants eliminates the need to consider any protected characteristic as a “plus factor” in the final candidate choice. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Job Offer Strategies Particularly for firms with a talent philosophy of viewing employees as investors rather than assets, the job offer should maximize the employee value proposition offered to the finalist. Before extending a job offer, or deciding on the content of the job offer, it is always a good idea to verify the truthfulness of any statements made by the applicant that were relied on in assessing the candidate or deciding on the offer’s contents. Grade point average, prior work experience, prior salary, etc. It is also a good idea to identify a backup hire in case your first choice does not take the job. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Exempt (vs. nonexempt) employees Exempt employees: their employer is not required to pay them overtime pay. They are paid full salary for any week or month they work, regardless of how much time they work. They are paid on a salary rather than an hourly basis. Examples: managers, computer specialists, university lecturers etc. Copyright © 2011 Pearson Education, Inc.   Publishing as Prentice Hall

Compensation Decisions Low job offer: below-market rewards package Competitive job offer: total rewards package is competitive with the market High job offer: total rewards package is above the market Maximum job offer: the company’s best and final offer Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Employment Contract Implicit (psychological) employment contract: an understanding that is not part of a written or verbal contract. Because binding contracts for employment or for future compensation can be created verbally, great care should be taken during discussions with prospective new hires. To be legally binding and enforceable, any contract must consist of an offer outlining the terms and conditions of employment (and possibly a deadline for accepting the contract) that is accepted on the terms offered. Something of value (consideration), usually promises of pay in exchange for promises for labor, must also be exchanged. An agent authorized by the receiver can negotiate on the finalist’s behalf, and agents authorized by the organization such as executive recruiters and search consultants can negotiate on behalf of the company. Offer letter: written letter describing in clear and precise terms exactly what the compensation structure and terms of employment will be. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Common Employment Contract Content Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Common Employment Contract Content (continued) Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Employment Contracts Statements on a job application blank (e.g., a statement that providing false information is grounds for termination), statements in employee handbooks, and statements in other documents may become interpreted as enforceable contracts. Often focus more on termination issues than on employment. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Additional Agreements First rights to their inventions and patents Nondisclosure agreements (= obligation of secrecy) Noncompete clauses Nonsolicitation agreements It is a good idea to consult legal counsel before preparing any contract forms or statements on application forms Because states’ laws differ, employment law counsel should also be consulted to determine whether your state’s law enforces non-compete covenants and, if so, under what circumstances Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Presenting a Job Offer In writing Verbally Showing your company as a unique or exciting place to work can help close the deal Emphasizing the selling points of the job itself and the career development opportunities that exist, as well as selling the company’s image and brand, can increase the appeal of the opportunity to the candidate The job rewards analysis should help identify some of a job’s most attractive features Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Presenting a Job Offer Should reinforce the company image and the positive impression formed by the candidate during the hiring process While the candidate is considering the offer, it is a good idea to stay in contact with him or her to reinforce your enthusiasm Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Negotiable Job Offer Elements Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Salary Negotiating Zone Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Job Offer Negotiation Tips Do not look at a negotiation as an either/or proposition Identify what you can and cannot part with Try to identify and use sources of leverage Suppress your emotions Know your BATNA Take time to evaluate the offer Be realistic Practice your negotiation skills Document and be prepared to discuss your skills and accomplishments Be appreciative and respectful Remember that employment is an ongoing relationship Best Alternative To a Negotiated Agreement Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Closing the Deal For job offer acceptances: Ensure that the finalist followed the proper procedures, accepted the job offer as written, and responded before the deadline. Congratulate the new hire and express your enthusiasm about having him or her onboard. It can also be helpful to ask what persuaded the person to say yes, and what he or she thought of each company contact and the hiring process. To begin the new hire’s transition into the company, stay in contact with the new hire and encourage his or her supervisor and coworkers to do the same. Once a job offer has been accepted, the recruiter’s role is to begin building the new hire’s commitment to the company and enhancing his or her ability to succeed on the job. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Closing the Deal When the company rejects a candidate: Do so respectfully. Distributive fairness will be perceived as low, and to reduce negative spillover effects, efforts should be made to enhance the procedural and interactional fairness perceptions of rejected applicants. Negative reactions of rejected internal candidates may be reduced by explaining why they were not chosen, and what they can do to be more competitive for the position in the future. Development plans can be created to help the rejected employees enhance their experience and qualifications. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Closing the Deal When a finalist rejects a job offer: Try to find out why and whether an enhanced offer might be acceptable if the firm is willing to negotiate. Promptly and respectfully acknowledge the job offer rejection. Be sure to keep appropriate records of all applicants for EEO/AA computations, such as applicant flow. If a rejected applicant is qualified for a different position or if they might be hirable in the future for the job to which he or she applied, requesting permission to retain the applicant’s information for a period of time can help to build a talent pipeline and facilitate the future sourcing and recruiting of pre-qualified applicants. Equal Employment Opportunity Affirmative Action – visszavétel, pozitív diszkrimináció Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Fairness Perceptions Distributive fairness: the perceived fairness of the outcomes received Because most applicants don’t get a job offer, distributive fairness perceptions are often low Procedural fairness: the perceived fairness of the policies and procedures used to determine the hiring outcome Interactional fairness: perceptions of the degree of respect and the quality of the interpersonal treatment received Attending to procedural and interactional fairness perceptions can increase finalists’ willingness to accept job offers and can help reduce the negative spillover effects among those applicants turned down for the job who perceive low distributive fairness Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Reneging Reneging: backing out of a contract after it is accepted. Employers should never pressure candidates to renege on other employers. Although reneging is sometimes unavoidable due to changing health or family circumstances, it should not be taken lightly. Employers sometimes renege on extended and even accepted job offers due to a changing business environment, unexpected business slump, reorganization, being sold, or shut down. Often companies that renege on a job offer will give the job offer receiver compensation for breaking the contract to reduce negative feelings and reduce negative spillover effects. Instead of reneging, it may be possible to defer the new hire’s start date and offer partial salary in the interim, or hire the individual as a consultant and convert him or her to a full-time hire as soon as possible (e.g., when a hiring freeze is lifted). Treating the new hire with respect during the reneging process can reduce feelings of inequity and anger, and keep the individual interested in working for the firm in the future. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Discussion Questions Which approach to combining candidates’ assessment scores would you favor for choosing candidates? Why? Is it ethical for some new hires to receive different levels of pay and benefits than other new hires? Why or why not? If you received a job offer via e-mail, with no phone or personal contact, how would you feel? Would it influence your decision to accept the offer? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall Discussion Questions If you received a very appealing job offer one week after accepting a different job offer with another company, what would you do? Think about different job offers you have received. What made some of them better than others? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Develop Your Skills Exercise This chapter’s “Develop Your Skills” feature provided several tips on negotiating a job offer. In this exercise, you and a partner will use these tips to role- play a job offer negotiation. When you have finished, switch roles and negotiating partners so that you each have a chance to be the company representative and a chance to be the finalist with someone else. Your instructor will provide you each with more information and goals for your role. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Opening Vignette Exercise In this chapter’s opening vignette you learned how MarineMax tries to tailor its job offers to specific candidates. Working in a group of 3-5 students, reread the vignette and be prepared to share with the class your answers to the following questions: Do you think that it is ethical for MarineMax to give different new hires for the same job different amounts of pay and benefits? Should MarineMax use a low, competitive, or high job offer? Why? Should the company present a maximum job offer or leave room to negotiate? Why? What can MarineMax do to increase the likelihood that the top sales candidates it recruits will accept its job offers? Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. publishing as Prentice Hall