Selecting Employees to Fit the Job and the Organization

Selecting Employees to Fit the Job and the Organization
Chapter 7 Selecting Employees to Fit the Job and the Organization

Chapter Outline THE STRATEGIC IMPORTANCE OF SELECTION
Selection and Strategy Implementation The Economic Utility of Effective Selection The HR Triad THE HR TRIAD: ROLES AND RESPONSIBILITIES IN SELECTING APPLICANTS Selection within an Integrated HRM System OVERVIEW OF THE SELECTION PROCESS MANAGING CHANGE: SELECTING EMPLOYEES FOR A NEW PLANT Establish the Criteria of Interest Choose Predictors and Assessment Techniques MANAGING TEAMS: SELECTING THE WALT DISNEY CAST Decide When to Measure Each Predictor Synthesize Information to Choose Appropriate Candidates Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Chapter Outline (cont’d)
TECHNIQUES FOR ASSESSING JOB APPLICANTS Personal History Assessments Reference Checks and Background Verification Written Tests Work Simulations Assessment Centers Interviews Medical Tests THE PERSPECTIVE OF APPLICANTS Fair Content? Fair Process? MANAGING TEAMS: HIRING AT ADVANCED FINANCIAL SOLUTIONS Results of the Selection Decision Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Chapter Outline (cont’d)
LEGAL CONSIDERATIONS IN SELECTION Laws and Regulations That Prohibit Discrimination Federal Guidelines and Professional Standards Detecting Unfair Discrimination Defending Discriminatory Practices Legal Considerations for Global Selection GLOBAL SELECTION CHOICES MANAGING GLOBALIZATION: HIRING IS NO LAUGHING MATTER FOR CIRQUE DU SOLEIL CASE STUDY: SELECTING PATIENT ESCORTS Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

The Strategic Importance of Selection
The process of obtaining and using information about job applicants to determine who should be hired for long- or short-term positions. First, assess job requirements Then assess that applicants are: Capable of high productivity Motivated to stay with the organization for as long as the organization wants to employ them Able to engage in behaviors that result in customer satisfaction Capable of implementing the strategy of the company. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Uses of Selection Decisions
Fill open jobs Fill future openings Promote Transfer Appoint to task force Decide to mentor Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Selection and Strategy Implementation
Effect of Selection Practices Selection practices contribute to (or detract from) an organization’s strategic capabilities. Effect on Executives Managerial competencies change as the business changes through growth or acquisition. Other Employees All employees need to perform well and be good corporate citizens. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

The Economic Utility of Effective Selection Practices
Economic utility: the net monetary value associated with using a a selection procedure. Value of Decision Potential value is high for key positions Accumulated effect of good (or bad) selection decisions adds up Risk of harm and lawsuits can be minimized by effective screening Cost of Decision Time and resources used to collect info about applicants More expensive procedures justified when: Tenure will be long. Increases in performance have large impact. There are many applicants. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

The Consequences of Correct and Incorrect Selection Decisions
High performance Reject a qualified candidate (incorrect decision) Accept a qualified candidate (correct decision How Employee Performs Reject an unqualified candidate (correct decision) Accept an unqualified candidate (incorrect decision) Low performance Do not offer job Offer the job Employer’s Selection Decision EX 7.1 (adapted) Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 3

The HR Triad: Roles and Responsibilities for Selection
Line Managers Identify staffing needs Help HR define performance criteria Help HR develop selection tools Coordinate process with applicants and HR Administer some selection tests Comply with laws Provide accurate reference info Support ADA HR Professionals Develop/choose reliable and valid selection tests Coordinate selection process Select and evaluate vendors of selection services Arrange interviews Train others involved in selection Keep records and monitor outcomes for legal compliance Employees Apply for transfers, promotions Identify criteria for evaluating performance Interview/select new group members Attend training in selection processes Self-select into jobs that are good fit Inform managers of disabilities requiring accommodation Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Benefits for Applicants
How Centralizing Selection and Placement Activities Can Benefit Job Applicants Benefits for Applicants Convenient: Applicants go to only one place to apply for all jobs in the company. Good Match to Job: Specialists trained in staffing techniques do hiring, so the selection decisions are often better, resulting in personal success. Fair: People who know about the many legal regulations relevant to selection handle a major part of the hiring process, which improves legal compliance. EX 7.2 Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Benefits for Employers
How Centralizing Selection and Placement Activities Can Benefit Employers Benefits for Employers Efficient: The company can consider each applicant for a variety of jobs, which is efficient. Effective: Specialists trained in staffing techniques do hiring, so the selection decisions are often better, resulting in better business performance. Consistent: Common selection standards make it easier to maintain a workforce of consistent quality, which facilitates employee mobility between business units. EX 7.2 (cont’d) Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Selection within an Integrated HRM System
EX 7.3 Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

The Selection Ratio The proportion of applicants hired in relation to the number of applicants in the initial pool. Lower ratio = More opportunity to find outstanding candidates Lower ratios occur when: Recruitment is effective. There is high unemployment. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Overview of the Selection Process
Establish the criteria of interest Choose predictors and assessment techniques Decide when to measure each predictor Synthesize information and make the selection Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Possible Assessment Techniques for Several Competencies
MQ = Is a minimum qualification MT = May be acquired through training or on the job (desirable); preference may be given to those who possess this competency MA = Can be accommodated within reason WT = Will be acquired through training or on the job; not evaluated in the selection process SAF = Supplemental Application Form WKT = Written Knowledge Test WS = Work Sample PCD = Physical Capability Demonstration SPI = Structured Panel Interview DMI = Departmental Manager Interview BI/REF = Background Investigation/Reference Check PAF = Performance Appraisal Form (internal hires only) EX 7.4 Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Establish the Criteria of Interest
Outcomes that selection decisions are intended to predict. What is Effective Performance? Determined by using job analysis to examining the organizational context: Company culture Values Business Strategy Structure Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Choose Predictors and Assessment Techniques
Pieces of Information used to make a selection decision Applications, resumes, tests, interviews Assessment Techniques Designing predictors Choosing how to measure the predictors of interest Establish Validity Affirming the usefulness of gathered information for predicting applicant’s outcomes Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Basic Validity Strategies
Content Validation Criterion-related Validation Validity Validity Generalization Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Content Validation Content Validation
Using job analysis results to build a rational argument for why a predictor should be useful. Competency modeling is used to determine job requirements Expert(s) determine which predictors will best predict job success. Most commonly used validation strategy Especially useful when organization is creating new jobs Practical approach, but subjective Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Criterion–Related Validation
Individuals are assessed on both the predictor and their job performance Analysis of statistical correlations is used to establish the relationship between predictor scores and criteria. High (low) predictor scores correlate with high (low) job performance Costly and requires a large number of incumbents to use this approach. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Validity Generalization
Assumes that results of criterion-related validity studies performed in companies can be generalized to other companies. Relatively new approach Many selection techniques have been shown to be valid across variety of jobs Predictors must be relevant to the job. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Validity Estimates for Several Selection Techniques

Designing the Selection Process
There may be several means that can be used to assess each predictor. For example, communication skills can be assessed by: Supplemental application Panel Interview Manager Interview Reference Check Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Choosing Reliable Predictors
Reliability The degree to which a predictor yields dependable, consistent results Reliable predictors don’t change different circumstances (e.g., different test administrators or interviewers) Test-Score Banding Grouping applicants into clusters considered equally qualified for a job, despite small differences in their scores. A secondary criteria is used to “break ties” within the band. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Decide When to Measure Each Predictor
In most selection processes, there will always be more applicants than there are positions to be filled. Use less expensive procedures early in the process to remove applicants fail to do well early in the process. Use information from previous steps to decide which applicants will move to the next more expensive step in the selection process. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Synthesize Information to Choose Appropriate Candidates
Multiple Hurdles An applicant must exceed fixed levels of proficiency on all the predictors in order to be accepted. Compensatory A high score on one predictor can compensate for a low score on another predictor. Combined Screening applicants who meet one or more specific requirements, and then using a compensatory approach in comparing the applicants who have passed the required hurdle. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

An Approach to Selecting Team Members in a Total Quality Production Plant

Techniques for Assessing Applicants
Personal History Assessments Medical Tests Reference and Background Checks Assessment Techniques Interviews Written Tests Assessment Centers Work Simulations Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Personal History Assessments
Past behavior is a good predictor of future performance Application Blank Helps determine if applicant possesses minimum job-related requirements and applicant’s preferences. Education and experience are important considerations for high-level jobs. Biodata Tests Asks applicants to provide autobiographical information about past and current activities. Are long and items may appear to be unfair, invasive, and not job-related to applicants. Are effective predictors of overall performance. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Reference Checks and Background Verification
Reference Verification Verify that information on applications and resumes is accurate. Negligent hiring: employers have a legal duty to not hire unfit persons. Employers can hire outside investigators or personally contact prior employers. Not an infringement on privacy if job-related. May be difficult to obtain information because previous employers fear defamation lawsuits. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Verification Checks Reveal Applicants’ Lies
Note: Information checked included employment histories, educational background, and credentials. Figures indicate the percentage of time the information reported by the applicant did not agree with the information revealed during the reference checks. EX 7.7 Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Written Tests Ability Tests Types of abilities: Knowledge Tests
Measure potential of individual to perform, given the opportunity Types of abilities: Psychomotor Physical Cognitive Used by about 30% of employers May result in adverse impact Knowledge Tests Assess what a person knows at the time of taking the test Useful for jobs requiring specialized or technical knowledge Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Written Tests (cont’d)
Personality Tests Assess the unique blend of personal characteristics that define individuals and determine their patterns of interactions with the environment. Big Five personality dimensions: Extraversion Agreeableness Conscientiousness Emotional stability Openness to experience Integrity Tests Can predict dishonest and disruptive work behaviors Paper-and-pencil tests have replaced lie detectors which were banned as selection tools by Employee Polygraph Protection Act of 1988 Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Work Simulations (Work Samples)
Applicants perform activities similar to those required on the job Difficult to fake More valid than other methods Less likely than other methods to unfairly discriminate Expensive to develop Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Assessment Centers Candidates participate in multiple assessment techniques Techniques simulate the job environment Candidates evaluated on multiple job dimensions Costly, but nondiscriminatory and valid across cultures Typical Techniques: In-Basket exercise Leaderless group discussion Business game Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Interviews Most widely used selection procedure Interview Design
Structured and semi-structured interviews are more valid than unstructured Structured interviews ensure the same questions will be asked of all applicants. Unstructured interviews lack validity and reliability. Interview Design Structured questions Focus on behavior Systematic scoring Multiple interviewers Interviewer training Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Examples of Questions to Use in a Structured Interview
COMPETENCY BEING ASSESSED: RELATIONSHIP BUILDING Interview Questions Designed to Focus on Behavioral Descriptions 1. Sketch out two or three key strengths you have in dealing with people. Can you illustrate the first strength with a recent example? [Repeat same probes for other strengths.] Probes: • When did this example take place? • What possible negative outcomes were avoided by the way you handled this incident? • How often has this situation arisen? • What happened the next time this came up? 2. Tell me about a time when you used your people skills to solve a customer problem. Probes: • When did this take place? • What did the customer say? • What did you say in response? • How did the customer react? • Was the customer satisfied? 3. Maintaining a network of personal contacts helps a manager keep on top of developments. Describe some of your most useful personal contacts. Probes: • Tell me about a time when a personal contact helped you solve a problem or avoid a major blunder. • How did you develop the contact in the first place? • What did you do to obtain the useful information from your contact? • When was the next time this contact was useful? • What was the situation at that time? • How often in the past six months have personal contacts been useful to you? EX 7.8 Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Comparison of Practices Used in Selected Countries (Part A)

Behavioral Job Interviews
Ask interviewee to describe specific instances of past behavior Instance illustrates relevant competency Research shows past behavior is best predictor of future behavior. Ask interviewee to respond to hypothetical job situations Applicant may describe or role-play what she or he would do. Research shows behavioral intentions predict behavior. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Trained Interviewers Give raters specific criteria and scoring keys to evaluate responses Use panel interviews for efficiency and reliability Train interviewers: Minimize bias and first impressions Ensure job-relatedness and consistency Provide frame-of-reference training Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Medical Tests Testing restrictions under the Americans with Disabilities Act (ADA) of 1990 It is illegal to inquire about disabilities before a job offer is made. General health exams can only be given after a job offer has been made. Employers are expected to make “reasonable accommodations” (but not preferences) for otherwise qualified disabled candidates. Job analysis can support screening (denial of employment) related to physical, sensory, perceptual, and psychomotor disabilities. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Medical Tests Genetic Testing and Screening Drug and Alcohol Testing
Identifies individual’s risks of future medical problems Controversial: Restrictions at state level Federal legislation likely Drug and Alcohol Testing Preemployment testing is permissible and may be mandatory Permissible under ADA Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Comparison of Practices Used in Selected Countries (Part B)

The Perspective of Applicants
Applicants’ reactions to the selection process influence their: Decision to join an organization Decision to remain with an organization Level of work motivation Socialization into the organization Applicants judge selection fairness by: The content of selection measures The fairness of the selection process The results of the selection process Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved. 5

Laws and Regulations That Prohibit Discrimination
Title VII of the Civil Rights Act Executive Order 11246 Age Discrimination in Employment Act Rehabilitation Act Americans with Disabilities Act Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Federal Guidelines and Professional Standards
Equal Employment Opportunity Commission (EEOC) publishes: Uniform Guidelines on Employee Selection Procedures (1978) Other EEOC guidelines (e.g., national origin, age, and religious discrimination) Technical Assistance Manual on Employment Provisions (ADA) Other Professional Standards: American Psychological Association Society for Industrial-Organizational Psychology Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Detecting Unfair Discrimination
Person (plaintiff) alleging discrimination Files complaint with EEOC (Equal Employment Opportunity Commission). EEOC investigates and attempts resolution. If plaintiff continues and files lawsuit, he/she must demonstrate a prima facie case of discrimination. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Detecting Unfair Discrimination (cont’d)
Disparate Treatment Illegal discrimination against an individual Prima Facie Cases of Discrimination Individual belongs to a protected group Individual applied for job for which employer seeking applicants Individual is qualified but was rejected Employer kept looking for people with applicant’s qualifications Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Adverse (Disparate) Impact Discrimination against an entire protected group Based on statistics from large number of hiring decisions Focuses on consequences of selection practices, not employer’s intent May be shown by audit of EEO-1 reports Labor Market Comparisons: Compare representation of protected group to the relevant labor market. Point of contention is what is the “relevant” labor market. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

The 80% (Four-fifths) Rule: Evaluating adverse impact by comparing the representation of a protected group in an applicant pool to its representation among those hired, fired, promoted, transferred or demoted. Example: Selection of firefighters with physical ability test: 10% pass rate for women 30% pass rate for men 10%/30% = 67%. The pass rate for women is less than 80% the pass rate of men; there is evidence of adverse impact. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Bases for employers’ defense in prima facie cases of disparate treatment or disparate impact: Job relatedness Business necessity Bona fide occupational qualification (BFOQ) Bona fide seniority system Voluntary affirmative action program Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Legal Considerations for Global Selection
1991 Civil Rights Act American civil rights laws cover U.S. citizens employed abroad by American multinationals. Foreign companies operating within the U.S. must adhere to U.S. employment laws. There are exceptions (e.g. trade treaties) and this is complex legal and social area. Fortino v. Quasar Co. Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Selecting Managers: Pros and Cons of PCNs, HCNs, and TCNs
PARENT-COUNTRY NATIONALS (PCNS) Advantages Organizational control and coordination is maintained and facilitated. Promising managers are given international experience. PCNs are the best people for the job. The subsidiary will likely comply with the company objectives, policies, and so forth. Disadvantages The promotional opportunities of HCNs are limited. Adaptation to the host country may take a long time. PCNs may impose an inappropriate headquarters style. Compensation for PCNs and HCNs may differ. HOST-COUNTRY NATIONALS (HCNS) Advantages Language and other barriers are eliminated. Hiring costs are reduced, and no work permit is required. Continuity of management improves, since HCNs stay longer in positions. Government policy may dictate the hiring of HCNs. Morale among HCNs may improve as they see the career potentials. Disadvantages Control and coordination of headquarters may be impeded. HCNs have limited career opportunities outside the subsidiary. Hiring HCNs limits opportunities for PCNs to gain overseas experience. Hiring HCNs could encourage a federation of national rather than global units. EX 7.12 Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

Selecting Managers: Pros and Cons of PCNs, HCNs, and TCNs
THIRD-COUNTRY NATIONALS (TCNS) Advantages Salary and benefit requirements may be lower than for PCNs. TCNs may be better informed than PCNs about the host-country environment. Disadvantages Transfers must consider possible national animosities. The host government may resent the hiring of TCNs. TCNs may not want to return to their own countries after assignment. EX 7.12 (cont’d) Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

TERMS TO REMEMBER Ability test Adverse impact Application blank
Assessment centers Behavioral job interviews Biodata test Bona fide occupational qualification (BFOQ) Bona fide seniority system Business necessity Combined approach Compensatory approach Content validation Criteria Criterion-related validation Disparate treatment Economic utility 80% rule Job-relatedness Knowledge test Multiple-hurdles approach Personality tests Predictors Reliability Selection Selection ratio Structured job interview Test-score banding Unstructured job interview Validity Validity generalization Work simulations Copyright © 2005 Thomson Business & Professional Publishing. All rights reserved.

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