DECISION

MAKING
HRM 542
FACULTY OF BUSINESS MANAGEMENT
CHOICE OF ASSESMENT
METHOD
Validity coefficient
Face validity
Correlation with other predictors
Adverse impact
Utility
Validity Coefficient
Validity refers to the relationship between
predictor and criterion scores.

Practical significance
Extent to which predictor adds value to prediction of job
success
Statistical significance
Assessed by probability or p values
Reasonable level of significance is p < .05
A reasonable p value of validity coefficient , it would
yield a similar validity coefficient in the same predictor
were used in different job applicant.

Face validity
Judgments of face validity are closely associated with
applicant reactions.
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Correlation With Other
Predictors
If a predictor is to considered useful, it must add value
to the prediction of job success.
To add value, a predictor must add to prediction of
success above and beyond forecasting powers of
current predictors
A predictor is more useful the
Smaller its correlation with other predictors and
Higher its correlation with the criterion (Job performance)

Predictors are likely to be highly correlated with one

another when their content domain is similar
Ex: biodata and application blanks
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Adverse Impact

Role of predictor
Discriminates between people in terms of
the likelihood of their job success
When it discriminates by screening out a
disproportionate number of minorities and
women

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Utility
Refers to expected gain to be derived from a predictor:
Hiring success gain:
Proportion of new hires who turn out to be successful
on the job.

Economic Gain Formula

Focuses on the monetary impact of using a predictor
Positiveeconomic gains are achieved when revenues
are maximized and costs are minimized.
Revenues are maximized by using the most valid
selection procedures.
Cost are minimized by using the predictors with the
least costs.
DETERMINING ASSESSMENT
SCORES
Single predictors
Easy determining scores
Drawback: Not all employer feel comfortable
using one basis only.
Multiple predictors
Compensatory Model
Multiple Hurdles Model
Combined Model
Compensatory Model
Scores on one predictor are simply added to
scores on another predictor.
Ex: If GPA is the predictor, applicant with a low
GPA still can get a job if they doing well in
interview.
Advantage: Recognized people have multiple
talent
Disadvantage: Not suitable for certain job i.e
Firefighter
Multiple Hurdles Model

An applicant must earn a passing score on each

predictor before advancing in the selection
process.
The first stage of a selection process screens the
applicant pool down to those who meet some
minimal educational or years of experience
requirement.
Does not allow a high score on one predictor to
compensate for a low score on another predictor.
Advantage: Reduce cost and ease decision making

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Combined Model

The selection process starts with two hurdles that

applicants must pass in succession: the application
form and the job knowledge test.
Failure to clear either hurdle results in rejection.
Applicants who pass receive an interview and have
their references checked.
Information from the interview and the references
is combined in a compensatory manner.
Those who pass are offered jobs, and those who do
not pass are rejected.

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Ex. 11.4: Combined Model
for Recruitment Manager

Compensatory

Hurdles

Hurdles

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METHODS TO DETERMINE CUT
SCORES
Minimum competency
Top-down
Banding
METHODS OF FINAL CHOICE
Random selection
Each finalist has equal chance of being
selected
Ranking
Finalists are ordered from most to least
desirable based on results of discretionary
assessments
Grouping
Finalists are banded together into rank-
ordered categories
Ex. 11.8: Methods of Final
Choice

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Decision Makers
Role of human resource professionals
Determine process used to design and manage
selection system
Contribute to outcomes based on initial
assessment methods
Provide input regarding who receives job offers
Role of managers
Determine who is selected for employment
Provide input regarding process issues
Role of employees
Provide input regarding selection procedures
and who gets hired, especially in team approaches
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