Strategic Staffing
Chapter 9 – Assessing
External Candidates
Jean Phillips & Stanley Gully
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Learning Objectives
After studying this chapter, you should be
able to:
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Identify different external assessment goals.
Describe what is meant by an assessment plan.
Describe different assessment methods and how each
is best used.
Discuss how to evaluate external assessment methods.
Identify ways to reduce the adverse impact of an
assessment method.
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External Assessment Goals
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Maximize fit
Accurate assessment
Maximize return on investment
Generate positive stakeholder reactions
Support talent philosophy and business strategy
Establish and reinforce employer image
Identify development needs
Assess ethically
Ensure legal compliance
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Types of Fit
Possible Dimensions of Fit
Person-Job Fit
Intelligence
Job-related skills and competencies
Job knowledge
Previous experience
Personality
Person-Group Fit
Teamwork skills
Expertise relative to other team members
Preference for team-based work
Communication skills
Person-Supervisor Fit
Values
Person-Organization
Fit
Alignment between personal motivations and
organizational purpose
Values
Goals
Person-Vocation Fit
Aptitudes
Interests
Long-term goals
Personality
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Goals
Personal values
9-4
Person-Job Fit
Person
Talents
Motivations
Job
Requirements
Rewards
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Complementary and
Supplementary Fit
• Complementary fit: when a person adds
something that is missing in the
organization or workgroup by being
different from the others
• Supplementary fit: when a person has
characteristics that are similar to those
that already exist in the organization
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Possible Assessment Outcomes
Poor Performer Good Performer
Hired False Positive
Not Hired True Negative
True Positive
False Negative
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Dollar Return on Investment
Economic Value of Improved Performance = (T * Nh * rxy * Zy) – (Na * Cy)
Savings from Avoiding Bad Hires = (Nh * HA * CBH) – (Na * Cy)
ROI = (Economic Value of Improved Performance + Savings from Avoiding Bad
Hires)
T = Average number of years employees stay in the position
Nh = Number of people hired
rxy = Correlation between assessment method and job performance (the amount
of improvement in job performance from using the assessment method)
Zy = Dollar value of improved job performance using the new assessment method
(default value = 40% of average base salary)
Na = Number of job candidates assessed
Cy = Cost per assessment
HA = Percentage of bad hires avoided (default value 5% (.05))
CBH = Average cost of a bad hire (default value $7,500)
ROI = Dollar return on the assessment method investment
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Return on Investment
• The savings from avoiding bad hires reflects the fact that
bad hires can actually cost the organization money.
• The return on investment from a new assessment
method is the sum of the economic value of improved
performance and the savings from avoiding bad hires.
• Although staffing should be seen as an investment rather
than a cost, cost is still important for many companies
that simply don’t have the money to invest in more
expensive systems even if they are more accurate at
identifying the best new hires.
• The formula provides a way to estimate the return on
investment of any new assessment method.
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Identify Development Needs
• Assessment tests can also identify new hires’
developmental needs.
– If a top candidate’s assessment scores show that his
or her organization and time management skills are
good but their customer service skills need further
development, post-hire training can improve these
skills.
• Some assessment methods even identify
applicants’ preferred learning style, which can
decrease training time, improve training
effectiveness, and increase retention.
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Legal Compliance (from the UGESP)
• A test of knowledge and abilities may be used if it measures a
representative sample of knowledge, skills, or abilities that are
necessary to perform the job and are operationally defined.
• Knowledges
– Must be defined in terms of behavior.
– Each knowledge must be part of a body of learned information that is
used in and necessary for necessary and observable job behaviors.
• Abilities
– Must be defined in terms of observable aspects of job behavior.
– Each ability should be necessary for the performance of important work
behaviors.
– Any selection procedure measuring an ability should closely
approximate an observable work behavior.
• To the extent that the setting and manner of the administration of the
selection procedure fail to resemble the work situation, the less likely
it is that the selection procedure is content valid, and the greater the
need for other validity evidence.
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Hiring Stages
• When people first apply for a job, they are considered
job applicants and are evaluated against the minimum
acceptable criteria for the job, such as relevant
education and skills.
• Those applicants passing the initial screen are
considered job candidates and are assessed in more
depth to evaluate their characteristics and qualifications
as defined by the job specification as well as on
dimensions relevant to person-organization and even
person-group and person-supervisor fit.
– A series of evaluative assessments is often performed, with the lowest
performing candidates being screened out after each phase.
• The organization then makes its hiring decision from the
group of finalists that remains after all assessment
methods have been completed.
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•
Some External Assessment
Methods
Screening Methods
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Resumes and cover letters
Background checks
Reference checks
Biographical information
Telephone screens
• Evaluative Methods
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Job applications
Job simulations
Assessment centers
Cognitive and noncognitive ability tests
Personality and value assessments
Integrity tests
Job knowledge tests
Interviews (structured and unstructured)
Situational judgment tests
• Contingent Methods
– Medical and drug tests
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Comparison of Commonly Used
Assessment Methods
Table 9-3
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Steps in Crafting a Structured
Interview
Table 9-7
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Types of Structured Interviews
• Behavioral interviews: using information
about what the applicant has done in the
past to predict future behaviors
• Situational interviews: asking people how
they might react to hypothetical situations
• Both types outperform unstructured
interviews and result in scores that can be
used to compare candidates
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Behavioral Interview
Rating Scale
Table 9-8
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Evaluating an Assessment
Method’s Effectiveness
• Validity—whether the assessment method predicts
relevant components of job performance
• Return on investment—whether the assessment method
generates a financial return that exceeds the cost
associated with using it
• Applicant reactions—including the perceived job
relatedness and fairness of the assessment method;
perceiving sufficient opportunity to perform, or believing
that one had an adequate opportunity to demonstrate
one’s ability to do the job, influences perceptions of the
fairness of the selection process, particularly if the
person is rejected for the job
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Evaluating an Assessment
Method’s Effectiveness
• Selection ratio—having a low selection ratio means
hiring only a few applicants, which allows an assessment
method to have maximal impact in improving the
performance of the people hired
• Usability—people in the organization must be willing and
able to use the method consistently and correctly
• Return on investment—the financial return on the
company’s investment in the assessment method
• Adverse impact—an assessment method is more
effective if it predicts job performance and other
important hiring outcomes without discriminating against
members of a protected class
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Reducing Adverse Impact
• Using targeted recruitment to increase the numbers of
qualified minority applicants
• Expanding the definition of job performance to include
areas of contextual performance such as commitment
and reliability in addition to task performance
• Combining predictors can reduce adverse impact – if a
cognitive ability test predicts job performance but
discriminates against women, using it in conjunction with
another valid assessment method that either does not
have any adverse impact based on sex or that
discriminates against men can reduce or eliminate the
adverse impact of the cognitive ability test
• Using well-developed simulations rather than cognitive
ability tests
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Reducing Adverse Impact
• If only a few applicants are ultimately hired (low selection
ratio), using assessment methods with less adverse
impact early in the selection process and those with
greater adverse impact later in the process
• Using banding and assigning the same score to
applicants who score in a range on the assessment
– Think of grades – students scoring from 93 to 100% are placed
in the A band, from 85 to 95% are placed into the B band, etc.
– Only the banded score (A, B, C, etc.) is used to compare
applicants
– This technique can reduce an assessment’s adverse impact but
will also reduce the validity of the test
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Assessment Plan
• After creating a job requirements matrix, the next step is
to identify the best way of assessing each important job
qualification.
• The assessment plan describes:
– Which assessment method(s) will be used to assess each of the
characteristics on which applicants will be evaluated
– In what sequence the assessments will take place
– What weight each assessment will receive in determining an
overall score for that characteristic based on the importance of
each characteristic to job performance.
• Characteristics that will be trained after hire are not
assigned to any assessment method, but any existing
qualifications required to qualify for the training program
should be listed.
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Assessment Plan
Table 9-10
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Choosing Assessment Methods
• The choice should be based on which methods best
assess the applicant characteristics or competencies
identified as important during the job analysis as well as
the ability of the assessment method to meet other
important goals of the external assessment process.
• Because different methods are good at assessing
different things, and differ in their cost, validity, applicant
reactions, and adverse impact, it is often necessary to
use more than one assessment method.
• Just because an assessment method results in adverse
impact, if it does a good job predicting job performance it
may be worthwhile to investigate the usefulness of
various strategies to reduce its adverse impact so that it
can continue to be used.
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Discussion Questions
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When should employers reassess the
assessment methods they use in hiring?
Discuss the advantages and disadvantages of
both structured and unstructured interviews.
Which would you prefer to use? Why?
Why go to all the trouble of sometimes costly
and time-consuming assessments when there
are no guarantees they will result in a
successful hire?
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Discussion Questions
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•
What do you feel are the least effective
external assessment methods? Why?
Do you think that it is appropriate for
employers to research applicants’
backgrounds? What about credit
histories? Why or why not?
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Opening Vignette Exercise
Southwest Airlines believes that it needs employees with
creativity, humor, and the ability to work well with others to
successfully execute its differentiation strategy. This chapter’s
opening vignette provided some information about how the
company currently assesses job candidates on these
dimensions. Reread the opening vignette and its conclusion,
and answer the following questions in a group of 3-5 people.
Be prepared to share your answers with the class.
– Do you think it’s appropriate for Southwest Airlines to assess
creativity and humor during its assessment process?
– How would you react if you went through Southwest’s assessment
process? Identify some things that you would both like and dislike
and explain why.
– Identify two other assessment methods you think Southwest could
use to assess applicants’ humor and creativity.
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