Organizations are all around us (businesses, hospitals, social clubs etc.) and all have their own particular set of objectives. To function effectively, organizations must subdivide their objectives into various jobs which require people of differing aptitudes. This makes the use of human resources essential. This book considers how applied psychology can contribute to a wiser, more humane use of our human resources.
We are all confronted by organizations in one form or another in our lives. Children are exposed to school organizations, after leaving school they may choose to join a military, business, or government organization, and will later on probably move through several different organizations. Our everyday lives are intertwined with organizational memberships.
What characteristics unite various activities under the collective label “organization”? Multiple definitions of organizations have been suggesting, each reflecting various theoretical points of view. But certain fundamental elements recur. In general, an organization is a collection of people working together in a division of labour to achieve a common purpose. Another concept views an organization as a system of inputs (raw materials), throughputs (materials transformed/modified), and outputs (exported/sold back to the environment as finished products). People are the basic ingredients of all organizations.
The focus is on people as members and resources of organizations and what applied psychology can contribute toward helping organizations make the wisest use of human resources. Personnel psychology concerns individual differences in behaviour and job performance and methods for measuring and predicting such differences. The sources of these differences can come from differences in jobs but also differences in performance and between people.
In an ideal world, the goal would be to assess everyone’s individual aptitudes, abilities, personalities, and interests; profile these characteristics; then place individuals in jobs perfectly suited to them and society. This ideal falls short in practice.
It is useful to make explicit underlying assumptions.
Personnel psychology is a subfield within I/O (industrial and organizational) psychology. It is an applied discipline focusing on individual differences in behaviour and job performance and methods of measuring and predicting these differences. Major areas of interest include job analysis and job evaluation, recruitment, screening, selection, training and development, and performance management.
There is also overlap between psychology and HRM, which is concerned with the management of staffing, retention, development, adjustment, and change in order to achieve individual and organizational objectives. Psychologists have already made substantial contributions to the field of human resource management. The last decade has seen changes in markets, technology, organizational designs, and the roles of managers and workers inspiring a renewed emphasis and interest in personnel psychology. The following sections will consider each of these in more detail.
Globalization refers to commerce without borders and the interdependence of business operations in different locations. In a world where the transfer of capital, goods, and labor happens seamlessly, globalization brings both positive and negative changes.
To facilitate globalization, some firms consider outsourcing. They send teams to dissect the workflow of an entire department and then help build a new IT platform, redesign processes, and administer programs. The contractor then disperses work among global networks of staff across the world. These structural changes have consequences that are beneficial for the global economy but promise more frequent career changes for workers.
It takes trade agreements, technology, capital investment, and infrastructure as well as the skills, and competencies of a well-trained workforce to deliver world-class products and services. Attracting, developing, and retaining talent in a culture that supports ongoing learning is a challenge for all organizations. Human resource professionals are at the center of this effort.
This has an impact on jobs and the psychological contract. Jobs are not being temporarily lost because of a recession, but they are being wiped out permanently as a result of new technology and new ways of organizing work. The final 20 years of the twentieth century saw many corporate cultures and workforces being characterized by downsizing and the loss of the perceived ‘psychological contract’ of lifelong employment with a single employer. The psychological contract refers to an unwritten agreement in which the employee and employer develop expectations about their mutual relationship.
Stability and predictability characterized the old psychological contract. Change and uncertainty are now hallmarks of the new psychological contract. It Is more common nowadays to job hop and hold multiple jobs during your life than it was a few decades ago.
Millions of workers use many products of the digital age, computers, phones, digital assistants, email etc. Anything digital is borderless and the digital revolution is breaking down departmental barriers, making sharing vast amounts of information easier. To succeed in a world where the only constant thing is the increasing pace of change, companies need motivated, technically literature workers who are willing to train continually.
Like other new developments, there are negatives and positives associated with new technology, that need to be acknowledged. Negatives include, mass junk email, potential attacks by hackers, and invasion of employees’ privacy. A common assumption is since production and service processes have become more sophisticated, high technology can substitute for skill in a managing workforce. However, technology ideally will help workers make decisions in organizations that encourage them to do so.
Many factors are driving change, but none are more important than the rise of Internet technologies. The Web enables everyone in an organization to access an array of information instantaneously from anywhere. Organizations these days are global in orientation and all bout speed with no guarantees to workers or managers. Organizations are becoming leaner, with better trained multispecialists. Organizations of the future will come to rely on cross-trained multispecialists. The role of managers is changing dramatically.
In the traditional hierarchy, managers ruled by command from the top, using rigid controls to ensure tasks could be coordinated, and partitioned information into compartments. Information was/is power, and managers clung to power by hoarding information and aimed for stability, predictability, and efficiency. In today’s hypercompetitive work environment, organizations have to respond quickly to shifting market conditions. Key tasks for managers are to articulate a vision of what their organizations stand for, what they are trying to accomplish, and how they compete for business in the marketplace.
A growing number of organizations now recognize that they need to emphasize workplace democracy in order to achieve the vision, which involves breaking down barriers, sharing information, using a collaborative approach to problem solving, and orienting employees toward continuous learning and improvement. This does not necessarily imply a move toward a universal model of organizational and leadership effectiveness. Today’s networked, interdependent, culturally diverse organizations require transformational leadership, which is effective under unstable or uncertain conditions.
Additionally, much of the work resulting in a product, service, or decision is now done in teams. Such teams have many names – autonomous work groups, process teams, self-managing work teams etc. This all implies a reorientation from the traditional view of a manager’s work. In this environment, workers act more like managers, and managers more like workers. Flattened hierarchies also means that there are fewer managers in the first place.
21st century organizations differ in structure, design, and demographics from those of even a decade ago. Demographically, they are more diverse (more women, more multicultural workers, older workers, more disabled workers, robots etc. here is more pressure to do more with less and emphasis on empowerment, cross-training, personal flexibility, self-management, and continuous learning.
Today, the quality of a nation’s workforce is a crucial determinant of its ability to compete and win in world markets. Human resources can be sources of sustained competitive advantage if they meet three requirements: (1) they add positive economic benefits to the process of producing goods and services, (2) skills of the workforce are distinguishable from those of competitors, (3) such skills are not easily duplicated. A human resource system can enhance or destroy this potential competitive advantage.
As personnel psychology moves forward into the 21st century, the biggest challenge is changing the way we think about organizations and their people. There is more demand for comprehensive training policies that focus training efforts on organizational needs 3-5 years out. From an employee’s perspective, these programs are valuable because job security (retaining employment with one organization until retirement) has become less important to workers than employment security (having skills that employers are willing to pay for). Demographic changes are making recruitment and staffing top priorities in many organizations. A diverse workforce is now not something a company should have, but something they all do have or soon will have.
Aside from demographic changes, there are also changes in the nature of work and its impact on workers and society. Potential problems that could arise include insecurity, uncertainty, stress, and social friction. On the other hand, however, work could provide compensations such as challenge, creativity, flexibility, control, and interrelatedness.
This all taken together shows that the need for competent HR professionals with broad training in a variety of areas has never been greater than now.
Comprehensive employment-related legislation, combined with increased motivation from individuals to rectify unfair employment practices, makes the legal aspects of employment one of the more dominant issues in HRM today. All branches of the federal government (in the U.S.) have been actively involved in efforts to guarantee equal employment opportunity as a fundamental individual right, regardless of race, color, age, gender, religion, national origin, or disability. I/O psychologists and HR professionals are being called on to work with attorneys, courts, and federal regulatory agencies. It is therefore important to understand the rights and obligations of individuals and employers under the law and to ensure that these are translated into everyday practice according to legal guidelines by federal regulatory agencies.
The United States Constitution stands as the supreme law of the land. Certain powers and limitations are prescribed to the federal government by the Constitution, those not given to the federal government are reserved for the states. In turn, the states have their own constitutions that are subject to the U.S. Constitution. Certain activities are regulated exclusively by the federal government (e.g., interstate commerce), whereas other areas are subject to concurrent regulation by federal and state governments (e.g., equal employment opportunity).
The legislative branch of government (Congress) enacts laws, which are considered primary authority. Court decisions and guidelines of regulatory agencies are not laws, but interpretations of the law given for situations in which the law is not specific. The judicial power of the U.S. is vested “in one Supreme Court and in such inferior courts as Congress may from time to time ordain and establish” according to the Constitution. The system of ‘inferior’ (lower) courts includes District Courts, the federal trial courts in each state. The state court structure parallels the federal court structure, with state district courts at the lowest level, followed by state appellate (review) courts, and finally by a state supreme court.
Equal Employment Opportunity (EEO) complaints may take any one of several alternative routes. The simplest and least costly alternative is to arrive at an informal, out-of-court settlement with the employer. But often the employer does not have an established mechanism for dealing with such problems. So, the complainant has to choose more formal legal means. But solutions then become time consuming and expensive. Perhaps the wisest course of action an employer can take is to establish a sound internal complaint system to deal with problems before they escalate to formal legal proceedings.
Now law has ever attempted to precisely define the term discrimination. In the employment context, it can be viewed broadly as the giving of an unfair advantage (or disadvantage) to members of a particular group in comparison the members of other groups. Usually this is in the form of denial or restriction of employment opportunities or in an inequality in the terms/benefits of employment. Discrimination is a subtle and complex phenomenon that may assume two broad forms:
Employers are subject to the various nondiscrimination laws. Government contractors and subcontractors are subject to executive orders. While it is beyond the scope of this chapter to analyze all the legal requirements pertaining to EEO, HR professionals should understand the major legal principles as articulated in the following laws of broad scope.
The U.S. Constitution (13th and 14th Amendments): the 13th amendment prohibits slavery and involuntary servitude. The 14th amendment guarantees equal protection of the laws for all citizens. It is from this source of constitutional power that all subsequent civil rights legislation originates.
The Civil Rights Acts of 1866 and 1871: the 1866 act grants all citizens the right to make and enforce contracts for employment. The 1871 act grants all citizens the right to sue in federal court if they feel they have been deprived of any rights or privileges guaranteed by the Constitution and laws.
The Equal Pay Act of 1963: this act was passed as an amendment to the Fair Labour Standards Act of 1938. The Equal Pay Act requires that men and women working for the same establishment be paid the same rate of pay for work that is substantially equal in skill, effort, responsibility, and working conditions.
Title VII of the Civil Rights Act of 1964 (amended by the Equal Employment Opportunity Act of 1972): The Civil Rights Act of 1964 is divided into several sections or titles, each dealing with a particular facet of discrimination. Title VII has been the principal body of federal legislation in the area of fair employment. It established the EEOC to ensure compliance with the law by employers, employment agencies, and labour organizations. Title VII considers: Nondiscrimination on the basis of race, colour, religion, sex, or national origin, apprenticeship programs, retaliation, and employment advertising, suspension of government contracts and back-pay awards. Exemptions to Title VII coverage include:
The Age Discrimination in Employment Act of 1967 (amended in 1986): The Age Discrimination in Employment Act requires employers to provide EEO on the basis of age. It proscribes discrimination on the basis of ages for employees age 40 and over unless the employer can demonstrate that the age is a BFOQ for the job in question.
The Immigration Reform and Control Act of 1986: this law applies to every employer and employee in the United States. It requires that employers do not hire or continue to employ aliens who are not legally authorized to work in the U.S. and that within three days of the hire date, employers verify the identity and work authorization of every new employee. Employers cannot discriminate on the basis of national origin, but when two applicants are equally qualified, they may choose a U.S. citizen over a non-U.S. citizen.
The Americans with Disabilities Act of 1990: it prohibits an employer for discriminating against a qualified individual with a disability as long as they are able to perform the essential functions of a job with or without accommodation.
The Civil Rights Act of 1991: amended the civil rights act of 1866 so workers are protected from intentional discrimination in all aspects of employment, not just hiring and promotion. This Act also overturned six supreme court decisions issued in 1989. Some key provisions that are likely to have the greatest impact in the context of employment include: monetary damages and jury trials, adverse impact cases, protection in foreign countries, racial harassment, challenges to consent decrees, mixed-motive cases, seniority systems, race-norming and affirmative action, and extension to U.S. senate and appointed officials.
The Family and Medical Leave Act of 1993: this law gives workers up to 12 weeks of unpaid leave each year for birth, adoption, or foster care of a child within a year of the child’s arrival; care for a spouse, parent or child with a serious health condition’ or the employee’s own serious health condition if it prevents them from working. In 2008 it was amended and expanded to include military families.
Laws with limited application (nondiscrimination as a basis for eligibility for federal funds):
Legislative and executive branches may write the law and provide for its enforcement, but it is the judicial branch’s responsibility to interpret the law and to determine how it will be enforced. Legal interpretations define what is called case law, which serves as a precedent to guide, but not completely to determine, future legal decisions. This section highlights some significant developments in certain areas:
We have examined the legal and social environments within which organizations and individuals function. For both to function effectively, competent HRM is essential. Fundamental tools are needed to enable HR professionals to develop both a conceptual framework for viewing employment decisions and methods for assessing the outcomes of such decisions.
Comprehensive employment-related legislation, combined with increased motivation from individuals to rectify unfair employment practices, makes the legal aspects of employment one of the more dominant issues in HRM today. All branches of the federal government (in the U.S.) have been actively involved in efforts to guarantee equal employment opportunity as a fundamental individual right, regardless of race, color, age, gender, religion, national origin, or disability. I/O psychologists and HR professionals are being called on to work with attorneys, courts, and federal regulatory agencies. It’s therefore important to understand the rights and obligations of individuals and employers under the law and to ensure that these are translated into everyday practice according to legal guidelines by federal regulatory agencies.
Organizations and individuals frequently are confronted with alternative courses of action, and decisions are made when one alternative is chosen in preference to others.
How does one arrive at sound decisions that will ultimately spell success for the individual or organization affected? Principles are needed to help managers and individuals make the most profitable or beneficial choices among products, investments, jobs, curricula, etc.
Utility theory is engaging as it insists that costs and expected consequences of decisions always be taken into account. It stimulates the decision maker to formulate what he or she is after, as well as to anticipate the expected consequences of alternative courses of action. The ultimate goal is to enhance decisions, and the best way to do that is to identify the linkages between employment practices and the ability to achieve the strategic objectives of an organization.
Much attention has recently been devoted to the concept of ‘systems and the use of ‘systems thinking’ to frame and solve complex scientific and technological problems. A system is a collection of interrelated parts, unified by design and created to attain one or more objectives. The objective is to be aware of the variables involved in executing managerial functions so that decisions will be made in light of the overall effect on the organization and its objectives. These decisions have to consider the organization itself but also the larger systems in which the organization operates. Classical management theories view organizations as closed or self-contained systems whose problems could be divided into their component parts and solved. The closed-system approach concentrated primarily on the internal operation of the organization and tended to ignore the outside environment.
This approach was criticized on several grounds. By concentrating solely on conditions inside the firm, management became sluggish in its response to the demands of the marketplace. The modern view of organizations is therefore that of open systems in continual interaction with multiple, dynamic environments, providing for a continuous import of inputs and a transformation of these into outputs, which are then exported back into these various environments to be consumed by clients or customers. So, the environments provide feedback on the overall process.
The hierarchy of systems should be emphasized as well. A system comprises subsystems of a lower order and is also part of a supersystem. But what constitutes a system is purely relative and largely depends on the level of abstraction/complexity on which one is focusing the analysis. There is a need for an inclusive, almost concentric mode of organizing subsystems into larger systems and supersystems to coordinate activities and processes. This provides a macro-view from which to visualize events or actions in one system and their effects on other related systems or on the organization as a whole.
Systems theory has taken us to the edge of a new awareness – that everything is one big system with infinite, interconnected, interdependent subsystems. Managers need to understand systems theory, but they should resist the rational mind’s instinctive desire to use it to predict and control organizational events. Organizational reality will not conform to any logical, systemic thought pattern.
To appreciate fully the relevance of applied psychology to organizational effectiveness, it is useful to view the employment process as a network or system of sequential, interdependent decisions. Each decision is an attempt to discover what should be done with one or more individuals, and these decisions typically form a long chain. It is a sequential strategy, where information gathered at one point in the overall procedure determines what, if any, information will be gathered next.
There are two general features: (1) different recruitment, selection, and training strategies are used for different jobs; and (2) the various phases in the process are highly interdependent, as the feedback loops indicate. Changes in one part of the system have a ‘reverberating’ effect on all other parts of the system.
Each link of the model will be examined below.
Job analysis is the fundamental building block on which all alter decisions in the employment process must rest. This process begins with a detailed specification by the organization of the work to be performed, skills needed, and training required to perform the job satisfactorily. It supports job evaluation, in which organizations must make value judgments on the relative importance or worth of each job to the organization as a whole – in terms of dollars.
Workforce planning (WP) is concerned with anticipating future staffing requirements and formulating action plans to ensure that enough qualified individuals are available to meet specific staffing needs at some future time. Four conditions must be met:
Equipped with the information derived from job analysis, evaluation, and WP, we can proceed to attracting potentially acceptable candidates to apply for the various jobs. The recruitment machinery is typically set into motion by the receipt by the HR office of staffing requisition from a particular department. Two basic decisions that the organization must make involve:
The resulting applications are subjected to an initial screening process that is more or less intensive depending on the screening policy or strategy adopted by the organization. Because each stage in the employment process involves a cost to the organization and because the investment becomes larger and larger with each successive stage, it is important to consider the likely consequence of decision errors at each stage. There are two types of decision errors:
Information is collected judgmentally (e.g., by interviews), mechanically (e.g., by written tests), or in both ways. Gathered data must be combined judgmentally, mechanically, or via some mixture of both methods. The resulting combination is the basis for hiring, rejecting, or placing on a waiting list every applicant who reaches the selection phase.
HR professions can increase the effectiveness of workers and manages of an organization by employing a wide range of training and development techniques. Payoffs are significant only when training techniques accurately match individual and organizational needs. Most individuals have a need to feel competent. Training programs designed to modify or develop competencies range from basic skills training and development for individuals, to team training, supervisory training and cross-cultural training for employees who will work in other countries.
When selecting and training an individual for a specific job, an organization is essentially taking a risk in the face of uncertainty. It is only after employees have been performing their jobs for a reasonable length of time that we can evaluate their performance and our predictions. When observing and evaluating job behaviour and providing timely feedback, we are evaluating the degree of success of the individual or team in reaching organizational objectives. Promotions, compensation decisions, transfers, and disciplinary actions are dependent on performance management. Performance management focuses on improving performance at the level of the individual or team every day. Performance appraisals on the other hand are done once or twice a year to identify and discuss the job-relevant strengths and weaknesses of individuals or teams.
Eventually everyone who joins an organization must leave. For some this process is involuntary (e.g. termination or forced layoff), for others it is voluntary, and the employee has control over the timing of their departure. Retirement is also a form of organizational exit but is likely to have fewer adverse effects than involuntary exits. The organizational exit influences and is influenced by prior phases in the employment process.
This urges us to consider both costs and anticipated consequences in making decisions. Nowhere are systems thinking more relevant than in the HRM systems of organizations. The very concept of a system implies a design to attain one or more objectives, involving a consideration of desired outcomes.
Organizations and individuals frequently are confronted with alternative courses of action, and decisions are made when one alternative is chosen in preference to others.
Adequate and accurate criterion measurement is a fundamental problem in HRM. Criteria are operational statements of goals or desired outcomes. Although criteria are sometimes used for predictive purposes and sometimes for evaluative purposes, in both cases they represent that which is important or desirable.
In general, applied psychologists are guided by two principal objectives: (1) to demonstrate the utility of their procedures and programs and (2) to enhance their understanding of the determinants of job success.
The development of criteria that are adequate and appropriate is at once a stumbling block and a challenge to the HR specialist. The criterion problem refers to difficulties involved in the process of conceptualizing and measuring performance constructs that are multidimensional, dynamic, and appropriate for different purposes. The effectiveness and future progress of knowledge with respect to most HR interventions depend fundamentally on our ability to resolve this question.
The challenge is to develop theories, concepts, and measurements that will achieve the twin objectives of enhancing the utility of available procedures and programs and deepening our understanding of the psychological and behavioural processes involve din job performance. We should aim to develop a comprehensive theory of the behaviour of men and women at work.
Criteria have been defined from multiple views. From one perspective, criteria are standards that can be used as yardsticks for measuring employees’ degree of success on the job. This definition is useful when prediction is involved, but there are times when we simply want to evaluate without necessarily predicting. If evaluative standards (like written or performance tests) are administered before an employment decision is made, the standards are predictors. If they are administered after an employment decision has been made, the standards are criteria.
A more comprehensive definition is required, regardless of whether we are predicting or evaluating. So, a more general definition is that a criterion represents something important or desirable and is an operational statement of the goals or desired outcomes of the program under study. It is an evaluative standard that can be used to measure a person’s performance, attitude, motivation etc. There are several other requirements of criteria in addition to desirability and importance, but, before examining them, we must first consider the use of job performance as a criterion.
Performance may be defined as observable things people do that are relevant for the goals of the organization. Job performance is multidimensional, and behaviours that constitute performance can be scaled in terms of the level of performance they represent. It is important to distinguish between performance from the outcomes or results of performance, which constitute effectiveness.
The ultimate criterion describes the full domain of performance and includes everything that ultimately defines success on the job. It is ultimate because you cannot look beyond it for any further standard by which to judge the outcomes of performance.
Operational measures of the conceptual criterion may vary along several dimensions. Ghiselli (1956) identified three different types of criterion dimensionality:
Competent criterion research is a pressing need for personnel psychology today. It is been shown that continuing attention to the development of better performance measures results in better predictions of performance. Now we consider three types of challenges faced in the development of criteria, point out potential pitfalls in criterion research, and sketch a logical scheme for criterion development.
Most people would agree that individual levels or performance may be affected by conditions surrounding the performance. But most research investigations are done without regard for possible effects of variables other than those measured by predictors. Here we will mention six possible extraindividual influences on performance. Taken together this is defined as in situ performance: “the specification of the broad range of effects – situational, contextual, strategic, and environmental – that may affect individual, team or organizational performance”.
Guion (1961) outlines a five-step procedure for criterion development.
How can we evaluate the usefulness of a given criteria? There are three yardsticks:
Criterion measures differ in the extent to which they cover the criterion domain. Criteria are deficient when they fail to include an important component of the job. The importance of considering criterion deficiency was highlighted by a study examining the economic utility of companywide training programs addressing certain skills. The amount of change observed in an employee’s performance after attending a training program depends on the percentage of job tasks measured by the evaluation criteria. A measure including only a subset of the tasks learned during training will underestimate the value of the program.
When criterion measures are gathered carelessly with no checks on their worth before use either for research purposes or in the development of HR policies, they are often contaminated. Criterion contamination happens when the operational or actual criterion includes variance that is unrelated to the ultimate criterion. It can be subdivided into two distinct parts.
There are three important and likely sources of bias:
If two criteria correlate (nearly) perfectly after correcting both for unreliability, then they are equivalent. If two criteria are equivalent, then they contain exactly the same job elements, are measuring the same individual characteristics, and occupy the same portion of the conceptual criterion space. They are equivalent if it makes no difference which one is used.
It is agreed that job performance is multidimensional in nature and that adequate measurement of job performance requires multidimensional criteria. But should one combine various criterion measures into a composite score, or should each criterion measure be treated separately?
The two positions differ in terms of (1) the nature of the underlying constructs represented by the respective criterion measures and (2) what they regard to be the primary purpose of validation process itself. Arguments for the composite criterion say that criterion should represent an economic rather than a behavioural construct. The criterion should measure the overall contribution of the individual to the organization. Advocates of multiple criteria argue that criterion should present a behavioural or psychological construct, one that is behavioural homogenous.
There are many possible uses of job performance and program evaluation criteria. Generally, they can be used for research purposes where the emphasis is on the psychological understanding of the relationship between predictors and criterion dimensions. But they can also be used for managerial decision-making purposes they must be combined into a composite representing overall economic worth to the organization.
Adequate and accurate criterion measurement is a fundamental problem in HRM. Criteria are operational statements of goals or desired outcomes. Although criteria are sometimes used for predictive purposes and sometimes for evaluative purposes, in both cases they represent that which is important or desirable.
In general, applied psychologists are guided by two principal objectives: (1) to demonstrate the utility of their procedures and programs and (2) to enhance their understanding of the determinants of job success.
Performance management is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization. It is assessed at regular intervals, and feedback is provided so performance is improved on an ongoing basis. But researchers’ inability to resolve definitively the knotty technical and interpersonal problems of performance appraisal has led to the term the “Achilles’ heel” of HRM. Performance management systems will not be successful if they are not linked to broader work unit and organizational goals. This chapter will focus on both the measurement and the social/motivational aspects of performance management.
Independently of any organizational context, the implementation of performance management system at work confronts the appraiser with five realities.
For any performance management system to be used successfully, it has to have the following nine characteristics:
These nine key characteristics indicate that performance appraisal should be embedded in the broader performance management system and that a lack of understanding of the context surrounding the appraisal is likely to result in a failed system.
Performance appraisal has two distinct processes: observation and judgment. Observation processes are more basic and include the detection, perception, and recall or recognition of specific behavioural events. Judgment processes include the categorization, integration, and evaluation of information. In practice, observation and judgment represent the last elements of a three-part sequence:
Who does the rating is important. Raters must have direct experience with, or first-hand knowledge of, the individual to be rated. In many jobs individuals with varying perspectives have such first-hand knowledge.
So far, it is assumed that ratings are given as an individual exercise. But in practice, appraising performance is not a strictly individual task. Supervisors often use information from outside sources in making performance judgments. It also seems that the presence of indirect information is more likely to change ratings form positive to negative than form negative to positive. If the process of assigning performance ratings is not entirely an individual task, might it pay off to formalize appraisals as a group task? A study found that groups are more effective than individuals at remembering specific behaviours over time, but they also demonstrate greater response bias. Results suggest that groups can be helpful but are not a cure-all for the problems of rating accuracy. Groups can be useful in two conditions: (1) the task needs to have a necessarily correct answer, and (2) the magnitude of the performance cue should not be too large.
To assess interrater agreement (convergent validity) and the ability of raters to make distinctions in performance across dimensions (discriminant validity), a matrix listing dimensions as rows and raters as columns might be prepared. However, across-organizational-level interrater agreement for ratings on all performance dimensions is an unduly severe expectation, and also may be erroneous. Although we should not always expect agreement, we should expect that the construct underlying the measure used should be equivalent across raters. It does not make sense to assess interrater agreement without first establishing measurement equivalence (or measurement invariance (because a lack of agreement could be due to a lack of measurement equivalence. This means that the underlying characteristics being measured are not on the same psychological measurement scale, implying that differences across sources are possibly artifactual, contaminated, or misleading.
Measurement equivalence needs to be established before ratings can be assumed to be directly comparable. Several methods exist for this purpose, including confirmatory factor analysis (CFA) and item response theory.
In the traditional view, judgmental biases result from some systematic measurement error on the part of a rater. So, it is easier to deal with than errors that are unsystematic or random. But every bias has been defined and measured differently in literature. this can lead to opposite conclusions even in the same study. However, in the minds of managers, these behaviours are not errors at all. Here we list some of the most commonly observed judgmental biases, with ways to minimize them.
Objectivity is often violated. Raters subscribe to their own sets of assumptions, and most people have encountered raters who seem either inordinately easy or difficult. Leniency and severity biases can be controlled/eliminated by:
When political considerations predominate, raters may assign their subordinates ratings that are neither too good nor too bad and avoid using extremes of rating scales. This can be minimized by specifying clearly what the various anchors mean.
A rater subject to the halo bias assigns ratings on the basis of a general impression of the ratee. The rater fails to distinguish among levels of performance on different performance dimensions.
We can classify rating systems into two types: relative and absolute, within which various methods may be distinguished.
Enable a rater to describe a ratee without making a direct reference to other ratees.
Factors that can influence subjective appraisals include personal characteristics (gender, race, age, education, interests etc.) and job-related variables (accountability, job experience, leaderships style, job satisfaction etc.). These factors are relevant for both the rater and ratee as well as how they interact during these performance ratings.
Different types of teams require different emphases on performance measurement at the individual and team levels. Depending on the complexity of the task and the membership configuration, we can identify three types of teams:
Assessing team performance should be seen as complementary to the assessment and recognition of (1) individual performance, and (2) individual’s behaviours and skills that contribute to team performance.
There are three broad objectives in rater training: (1) to improve the observational skills of raters by teaching them what to attend to, (2) to reduce or eliminate judgmental biases, and (2) to improve the ability of raters to communicate performance information to ratees in an objective and constructive manner. Rater training also focuses on teaching raters to eliminate judgmental biases and systematic errors.
In implementing a system, information of the social and interpersonal contexts is just as important as the knowledge of systematic errors and biases. To reinforce the view that context must be taken into account and that performance management must be tackled as both a technical as well as an interpersonal issue. The following are recommendations regarding issues that should be explored further:
One of the central purposes of performance management systems is to serve as a personal development tool. To improve, there has to be feedback regarding present performance. A formal system for giving feedback should be implemented because, without such a system, some employees are more likely to seek and benefit from feedback from others. Ideally, there should be a continuous feedback process between superior and subordinate. There are several activities supervisors should engage in before, during, and after appraisal interviews. These include:
Performance management is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization. It is assessed at regular intervals, and feedback is provided so performance is improved on an ongoing basis. But researchers’ inability to resolve definitively the knotty technical and interpersonal problems of performance appraisal has led to the term the “Achilles’ heel” of HRM. Performance management systems will not be successful if they are not linked to broader work unit and organizational goals. This chapter will focus on both the measurement and the social/motivational aspects of performance management.
Measurement of individual differences is the heart of personnel psychology. Individual differences in physical and psychological attributes may be measured on nominal, ordinal, interval, and ratio scales. Psychology’s first law is that “People are different.” Physical and psychological variability is all around us.
Measurement is the assignment of numerals to objects or events according to rules. But this definition says nothing about the quality of the measurement procedure, only that somehow numerals are assigned to objects or events. Psychological measurement is principally concerned with individual differences in psychological trait. A trait is a descriptive label applied to a group of interrelated behaviours that may be inherited or acquired.
The first step in a measurement procedure is to specify the dimension or trait to be measured. Then a series of operations can be developed that will allow us to describe individuals in terms of that dimension or trait. Variation among individuals can be:
There are four levels of measurement that are hierarchically related.
Psychological measurement scales are mostly nominal- or ordinal-level scales, although many scales and tests commonly used in behavioural measurement and research approximate interval measurement well enough for practical purposes. Strictly speaking, intelligence, aptitude, and personality scales are ordinal-level measures. They indicate their rank order with respect to the traits in question, not the amounts. Yet we can often assume an equal interval scale.
Should the value of psychological measures be judged in terms of the same criteria as physical measurement? Physical measurements are evaluated in terms of the degree to which they satisfy the requirements of order, equality, and addition. In behavioural measurement, the operation of addition is undefined, since there seems to be no way physically to add one psychological magnitude to another to get a third, even greater in amount. But other more practical criteria exist by which psychological measures may be evaluated.
Psychological measures are more appropriately evaluated in terms of their social utility. The important question is how psychological measures’ predictive efficiency compares to other available procedures and techniques. It is important for HR specialists to be well grounded in applied measurement concepts.
We use the word test in the broad sense to include any psychological instrument, technique, or procedure. Testing is systematic in three areas: content, administration, and scoring. Item content is chosen systematically from the behavioural domain to be measured. Procedures for administration are standardized. Scoring is objective.
When selecting a test, as opposed to evaluating its technical characteristics, important factors to consider are its content, the ease to which it may be administered, and the method of scoring.
Additional factors need to be considered in selecting a test – cost, interpretation, and face validity.
The process of creating new tests involves evaluating the technical characteristics of reliability and validity. But reliability and validity information should be gathered not only for newly created measures but also for any measure before it I put to use. Why is reliability so important? The main purpose of psychological measurement is to make decisions about individuals. If measurement procedures are to be useful practically. They have to produce dependable scores. Reliability of a measurement procedure refers to its freedom from unsystematic errors of measurement.
Since all types of reliability are concerned with the degree of consistency or agreement between two sets of independently derived scores, the correlation coefficient (or reliability coefficient) is a particularly appropriate measure of such agreement. In practice, reliability coefficients may serve one of both of two purposes: (1) estimating the precision of a particular procedure as a measuring instrument, and (2) estimating the consistency of performance on the procedure by the examinees. These purposes can easily be seen in the various methods used to estimate reliability.
There is no fixed value below which reliability is unacceptable and above which it is satisfactory. It depends what one plans to do with the scores. The more important the decision to be reached, the greater the need for confidence in the precision of the measurement procedure and the higher the required reliability coefficient. A procedure used to compare individuals should have a reliability above 0.9. but many standard tests with reliabilities as low as 0.7 prove to be very useful, and even lower may be useful for research purposes.
This statement needs to be tempered by considering other factors that may influence the size of an obtained reliability coefficient, including:
Scale coarseness is related to measurement error, but it is a distinct phenomenon that also results in lack of measurement precision. A measurement scale is coarse when a construct that is continuous in nature is measured using items such that different true scores are collapsed into the same category. Errors are introduced because continuous constructs are collapsed.
The lack of precision introduced by coarse scales has a downward biasing effect on the correlation coefficient computed using data collected form such scales for the predictor, the criterion, or both variables.
Generalizability theory conceptualizes the reliability of a test score as the precision with which that score, or sample, represents a more generalized universe value of the score. Observations are seen as samples from a universe of admissible observation. An examinee’s universe score is defined as the expected value of his or her observed scores over all admissible observations.
In personnel psychology, knowledge of each person’s individuality is essential in programs designed to use human resources effectively. This allows us to make predictions about how individuals are likely to behave in the future. To interpret the results of measurement procedures intelligently, we need some information about how relevant others have performed on the same procedure. Norms must provide a relevant comparison group for the person being tested.
Measurement of individual differences is the heart of personnel psychology. Individual differences in physical and psychological attributes may be measured on nominal, ordinal, interval, and ratio scales. Psychology’s first law is that “People are different.” Physical and psychological variability is all around us.
Scores from measures of individual differences derive meaning only insofar as they can be related to other psychologically meaningful characteristics of behaviour. Reliability is a necessary but not sufficient property for two scores to be useful in HR research and practice.
Theoretically it’s possible to develop a perfectly reliable measure whose scores were wholly uncorrelated with any other variable. Such a measure would have no practical value, nor could it be interpreted meaningfully, since its scores could be related to nothing other than scores on another administration of the same measure. It would be highly reliable but have no validity.
High reliability is a necessary, but not sufficient, condition for high validity. The concepts of reliability and validity are closely interrelated. We can’t understand whether the inferences made based on test scores are correct if our measurement procedures are not consistent. So, reliability places a ceiling on validity, and the use of reliability estimates in correcting validity coefficients requires careful thought about what the sources of error affecting the measure in question and how the reliability coefficient was computed.
Validity was traditionally viewed as the extent to which a measurement procedure actually measures what it is designed to measure. This kind of view is inadequate, it implies that a procedure only has one validity determine by a single study. On the contrary, a thorough knowledge of the interrelationships between scores from a particular procedure and other variables typically requires many investigations. The investigative process of gathering or evaluating the necessary data are called validation. Methods of validation revolve around two issues:
Thus, validity is not a dichotomous variable, but a matter of degree. It is also a unitary concept, there aren’t different “kinds” of validity, only different kinds of evidence for analyzing validity. Though there are numerous procedures available for evaluating validity, Standards for Educational and Psychological Measurement describes three principal strategies: content-related evidence, criterion-related evidence, and construct-related evidence.
Inferences about validity based on content-related evidence are concerned with whether or not a measurement procedure contains a fair sample of the universe of situations it is supposed to represent. An evaluation of content-related evidence is made in terms of the adequacy of the sampling. The criterion is expert judgment. Three assumptions underlie the use of content-related evidence:
When measures of individual differences are used to predict behaviour, and it’s technically feasible, criterion-related evidence is called for. With this approach, we test the hypothesis that test scores are related to performance on some criterion measure. The criterion is a score or rating that is either available at the time of predictor measurement (concurrent evidence) or will become available at a later time (predictive evidence).
Any predictor measure will be no better than the criterion used to establish its validity. As is true for predictors, anything that introduces random error into a set of criterion scores will reduce validity. It’s too often assumed that criterion measures are relevant and valid. It is important that the criterial be reliable. The performance domain must be defined clearly before we proceed to developing tests that will be used to make predictions about future performance. Finally, we should beware of criterion contamination in criterion-related validity studies. It’s essential that criterion data is gathered independently of predictor data.
Neither content- nor criterion-related validity strategies have as their basic objective the understanding of a trait or construct that a test measures. Content-related evidence concerns the extent to which items cover the intended domain, and criterion-related evidence is concerned with the empirical relationship between a predictor and a criterion. A conceptual is required to organize and explain our data and provide direction for further investigation. The framework specifies the meaning of the construct, distinguishes it from other constructs, and indicates how measures of the construct should relate to other variables. This is the construct-related evidence of validity’s function; it provides the evidential basis for the interpretation of scores. The construct is defined not by an isolated event, but by a nomological network – a system of interrelated concepts, propositions, and laws that relates observable characteristics to another theoretical construct.
The prediction of criteria using test scores is often implemented by assuming a linear and additive relationship between the predictors and the criterion. These relationships are typically operationalized using ordinary least squares (OLS) regression, in which weights are assigned to the predictors so that the difference between observed criterion scores and predicted criterion scores is minimized. Cross-validity refers to whether the weights derived from one sample can predict outcomes to the same degree in the population as a whole or in other samples drawn from the same population. There are two approaches:
Often, local validation may not be feasible due to logistics or practical constraints, including lack of access to large samples, inability to collect valid and reliable criterion measures, and lack of resources to conduct a comprehensive validity study. There are several strategies available to gather validity evidence in such situations: synthetic validity, test transportability, and validity generalization.
The process of inferring validity in a specific situation from a systematic analysis of jobs into their elements, a determination of test validity for these elements, and a combination or synthesis of the elemental validities into a whole. Research shows that synthetic validation is feasible and legally acceptable and resulting coefficients are comparable to validity coefficients resulting from criterion-related validation research.
To be able to use a test that has been used elsewhere locally without the need for a local validation study, evidence must be provided regarding the following:
Meta-analyses are literature reviews that are quantitative as opposed to narrative in nature, they aim to understand the relationship between two variables across studies and the variability of this relationship across studies. Meta-analyses conducted with the goal of testing the situational specificity hypothesis have been labelled psychometric meta-analysis or VG studies.
Local validation and VG both have weaknesses, so the use of empirical Bayesian estimation is proposed as a way to capitalize on the advantages of both of these approaches. This approach involves first calculating the average inaccuracy of meta-analysis and a local validity study under a wide variety of conditions and then computing an empirical Bayesian estimate, which is a weighted average of the meta-analytically derived and local study estimates.
The various strategies available to gather validity evidence when the conduct of a local validation study isn’t possible are not mutually exclusive. There is evidence supporting validation efforts that include a combination of strategies.
Scores from measures of individual differences derive meaning only insofar as they can be related to other psychologically meaningful characteristics of behaviour. Reliability is a necessary but not sufficient property for two scores to be useful in HR research and practice.
Fairness is a social, not a statistical, concept. But when it is technically feasible, users of selection measures should investigate potential bias, which involves examining possible differences in prediction systems for racial, ethnic, and gender subgroups. A complete test bias assessment involves an examination of possible differences in standard errors of estimate and in slopes and intercepts of subgroup regression lines, not just subgroup validity coefficients.
Measures of individual differences are discriminatory. This makes sense since in employment settings random acceptance of candidates can only lead to misuse of human and economic resources. Ignoring individual differences means abandoning potential economic, societal, and personal advantages to be gained by taking into account individual patterns of abilities and job requirements. Matching people and jobs accurately start with appraising individual patterns of abilities through selection measures. These measures are designed to discriminate and possess adequate validity. It is recommended that users of selection measures investigate differences in patterns of association between test scores and other variables for groups based on variables like sex, ethnicity, age, etc. – known as differential prediction/predictive bias. Differential validity refers to differences in validity coefficients across groups.
In a bivariate scatterplot of predictor and criterion data, each dot represents a person’s score on the predictor and the criterion. Depending how the dots cluster – in the shape of an ellipse in opposite quadrants (positive validity) or uniformly around the center, equally spread across the quadrants (zero validity) – we can see what kind of validity exists. When there is no differential validity, the predictor is useless because it supplies no information of a predictive nature. So, there is no point in investigating differential validity in the absence of an overall pattern of predictor-criterion scores that allows for the prediction of relevant criteria.
An important consideration in assessing differential validity is whether the test in question produces adverse impact. Adverse impact means that members of one group are selected at substantially greater rates than members of another group. To understand if this is the case, one compares selection ratios across the considered groups. Numerous possibilities exist when heterogenous groups are combined in making predictions. When differential validity exists, the use of a single regression line, cut score, or decision rule can lead to serious errors in prediction. While one legitimately may question the use of race or gender as a variable in selection, the problem is really one of distinguishing between performance on the selection measure and performance on the job. The implementation of differential systems is difficult in practice because fairness of any procedure that uses different standards for different groups is likely to be viewed with suspicion.
Evidence of differential validity provides information only on whether a selection device should be used to make comparisons within groups. Evidence of unfair discrimination between subgroups cannot be inferred from differences in validity alone; mean job performance must also be considered. A selection procedure may be fair and yet predict performance inaccurately or discriminate unfairly yet predict performance within a given subgroup accurately.
Differential validity exists when (1) there is a significant difference between the validity coefficients obtained for two subgroups and (2) the correlations found in one or both of these groups are significantly different from zero. Single-group validity is different from but related to differential validity, where a given predictor exhibits validity significantly different from zero for one group only, and there is no significant difference between the two validity coefficients.
The possibility of predictive bias in selection procedures is a central issue in any discussion of fairness and EEO. It requires a consideration of the equivalence of prediction systems for different groups. Lack of differential validity does not assure lack of predictive bias. When there is differential prediction based on a grouping variable such as gender or ethnicity, this grouping variable is called a moderator.
Testing for predictive bias involves using moderated multiple regression (MMR), where the criterion measure is regressed on the predictor score, subgroup membership, and an interaction term between the two. One can test the overall hypothesis of differential prediction by comparing R2’s resulting from the two models. If there is a statistically significant difference, you then explore if differential prediction is due to differences in slopes, intercepts, or both.
When prediction systems are compared, usually slope-based differences are not found, and intercept-based differences, if found, are such that they favour members of the minority group. Could it be that researchers find lack of differential prediction partially because the criteria themselves are biased? The assumption based on research is that if performance data are provided by supervisors of the same ethnicity as the employees being rated, the chances that the criteria are biased are minimized or even eliminated. Evidence indicates an overall lack of differential prediction based on ethnicity and gender for cognitive abilities and other types of tests. When differential prediction is found, results indicate that differences lie in intercept differences and not slope differences across groups and that the intercept differences are such that the performance of women and ethnic minorities is typically overpredicted, which means that the use of test scores supposedly favours these groups.
Anguinis et al. (2010) challenged conclusions based on 40 years of research on test bias in preemployment testing. Results indicate that the established and accepted procedure to assess test bias is itself biased: slope-based bias is likely to go undetected, and intercept-based bias favouring minority-group members is likely to be “found” when it does not exist. Preemployment testing is often described as the cradle of the I/O psychology field. These results open an important opportunity for I/O psychology researchers to revive the topic of test bias and make contributions with measurable and important implications for organizations and society.
There are several remedies for the low-power problem of moderated MMR. These include:
And many more. The bottom line is to carefully plan a validation study so that the differential prediction test is technically feasible and the results credible.
The previous section on validity and adverse impact showed that a test can be valid and still yield adverse impact. So, the presence of adverse impact is not a sufficient basis for a claim of unfair discrimination. A selection measure is unfairly discriminatory when some specified group performs less well than a comparison group on the measure but performs just as well as the comparison group on the job for which the selection measure is a predictor. This is what is meant by differential prediction or predictive bias.
It would be efficient to reduce adverse impact by using available test procedures. The following strategies are available before, during, and after test administration:
Adverse impact may occur even when there is no differential validity across groups. But the presence of adverse impact is likely to be concurrent with the differential prediction test, and specifically with differences in intercepts.
So far, we have emphasized mostly technical issues around test fairness, but we should not minimize the importance of social and interpersonal processes in test settings. An organization’s adherence to fairness rules is not simply required because it is part of good professional practice. When applicants and examinees perceive unfairness in the testing procedures, their perceptions of the organization and the procedures can be negatively affected. So to understand fairness and the impact of the selection system in place, it is necessary to conduct technically analyses on the data as well as consider the perceptions of people who are subjected to the system. There are two dimensions of fairness from the perspective of applicants:
Employers do not have control over the distributive aspect, but they do have control over the procedural perceptions of the test processes. Although tests may be technically fair and lack predictive bias, the process of implementing testing and making selection decisions can be such that applicants still perceive unfairness.
Unfair discrimination is hardly endemic to employment testing, but testing is certainly a visible target for public attack. Public interest in measurement embraces three essential functions:
As far as the future is concerned, it is the position of these authors that staffing procedures will yield better and fairer results when we can specify in detail the linkages between the personal characteristics of individuals and the requirements of jobs for which the procedures are most relevant, taking contextual factors into consideration.
Fairness is a social, not a statistical, concept. But when it is technically feasible, users of selection measures should investigate potential bias, which involves examining possible differences in prediction systems for racial, ethnic, and gender subgroups. A complete test bias assessment involves an examination of possible differences in standard errors of estimate and in slopes and intercepts of subgroup regression lines, not just subgroup validity coefficients.
Organizations recruit in order to add to, maintain, or readjust their workforces, prior planning is critical to the recruiting process and includes:
The internet is revolutionizing the recruitment process, opening up labour markets and removing geographical constraints. Cost and quality are necessary to evaluate the success of the recruitment effort.
When human resources must be expanded or replenished, a recruiting system of some kind must be established. Advances in technology, as well as growing intensity of competition in domestic and international markets, have made recruitment a top priority as organizations struggle continually to gain competitive advantage through people. Recruitment is a business that demands serious attention from management because any business strategy will falter without the talent to execute it. It is difficult to find good workers and talent acquisition is becoming more difficult. There is a levelling of the information playing field brought about by Web technology. As open systems, organizations demand a dynamic equilibrium for their own maintenance, survival, and growth.
The process of recruitment planning starts with a clear specification of HR needs and the time frame within which such requirements must be met. This is especially relevant to the setting of workforce diversity goals and timetables. Labour-force available availability and internal workforce representation of women and minorities are critical factors in this process.
Two other important questions need to be addressed, whom and where to recruit. It is important to answer both questions to determine recruitment objectives. Objectives are also critical to recruitment evaluation, if an employer wants to compare what it hoped to accomplish with actual recruitment outcomes.
Among the questions an employer might address in establishing a recruitment strategy are:
Primed with a comprehensive workforce plan for the various segments of the workforce, recruitment planning can begin. To do this, three key parameters must be estimated: the time, the money, and the staff necessary to achieve a given hiring rate. The basic statistic needed to estimate these parameters is the ‘number of leads needed to generate a given number of hires in a given time’. The easiest way to do this is based on prior recruitment experiences.
If no experience data exists, then it is necessary to use best guesses or hypothesis and monitor performance as the operational recruitment program unfolds.
A labour market is a geographical area within which the forces of supply interact with the forces of demand and thereby determine the price of labour. But it is impossible to define the boundaries of a local labour market in a clear-cut manner since geographical areas where employers extend their recruiting efforts depend partly on the type of job being filled.
Traditionally, employees are brought into organizations through a small number of entry-level jobs and are then promoted up through a hierarchy of increasingly responsible and lucrative. But recently, internal labour markets have weakened, high-level jobs have not been restricted to internal candidates, and new employees have been hired from the outside at almost all levels.
Yield ratios and time-lapse data are valuable for estimating recruiting staff and time requirements. Recruitment planning is not complete, however, until the costs of alternative recruitment strategies have been estimated. At the most general level, the gross cost-per-hire figure can be determined by dividing the total cost of recruiting (TCOR) by the number of individuals hired (NH). This is useful for a first step but falls short of the cost information necessary for thorough advance planning and later evaluation of the recruiting effort. The following cost estimates are also essential:
Analysis of recruiting sources facilitates effective planning. Three types of analyses are typical: cost per hire, time lapse from candidate identification to hire, and source yield. The most expensive sources generally are private employment agencies and executive-search firms. Time-lapse studies of recruiting sources are very useful for planning purposes, since the time from initial contact to report on board varies across sources. Source yield is the ratio of the number of candidates generated from a particular source to hires from that source. After examining source yield, we are almost ready to start recruiting operations. Recruiting efficiency can be heightened once employment requirements are defined thoroughly in advance. Research shows clearly that characteristics of organizations and jobs have greater influence on the likelihood of job acceptance by candidates than do characteristics of the recruiter. But there are at least three reasons why the recruiters might matter. Different recruiters may be important because:
The first step in recruiting operations is to examine internal sources for qualified or qualifiable candidates. This is especially true of large organizations with globally distributed workforces that are likely to maintain comprehensive talent inventories with detailed information on each employee. These inventories can facilitate global staffing and expatriate assignments.
There are a variety of external recruiting sources available. Available sources include:
In terms of the most popular sources used by employers, evidence indicates that:
Administratively, recruitment is one of the easiest activities to foul up – with potentially long-term negative publicity for the firm. Traditionally, recruitment was intensively paper based. But today the entire process is computer based. For example, Hiring Gateway from Yahoo! Resumix, automation replaces the entire manual process. These online recruiting processes often reduces the cost per hire and shortens hiring cycles.
How are measurement, evaluation, and control involved in the recruiting process?
If advance recruitment planning has been thorough, later evaluation of the recruitment effort is simplified considerably. A number of cost and quality analyses might be performed, but it is critical to choose those that are strategically most relevant to a given organization. Another consideration is choosing measures of recruiting success that are most relevant to various stages in the recruitment process. Ultimately, the success of recruitment efforts depends on the number of successful placements made. Other possible metrics include:
How do individuals identify, investigate, and decide among job opportunities? Research has found that many job applicants:
At the same time, evidence indicates that the job-choice process is highly social, with friends and relatives playing large role in the active phase of job searching.
Individuals possessing inflated job expectations are thought to be more likely to become dissatisfied with their positions and more likely to quit than applicants who have more accurate expectations. A way to counter this tendency is to provide realistic information to job applicants. Generally, though, it has been found that when the naïve expectations of job applicants are lowered (through a realistic job preview) to match organizational reality, results show that:
Finally, the effect of RJPs on voluntary turnover is moderated by job complexity. Smaller reductions in turnover can be expected in low-complexity jobs than in high-complexity jobs.
At the level of the individual job applicant, RJPs are likely to have the greatest impact when the applicant:
RJP’s should be balanced in their orientation, they should be conducted to enhance overly pessimistic expectations and reduce overly optimistic expectations. This helps bolster the applicant’s perceptions of the organization as caring, trustworthy, and honest. However, a multimethod approach to RJPs makes the most sense if the objective is to develop realistic expectations among job applicants.
Organizations recruit in order to add to, maintain, or readjust their workforces, prior planning is critical to the recruiting process and includes:
The internet is revolutionizing the recruitment process, opening up labour markets and removing geographical constraints. Cost and quality are necessary to evaluate the success of the recruitment effort.
Despite dramatic changes in the structure of work, individual jobs remain the basic building blocks necessary to achieve broader organizational goals. The objective of job analysis is to define each job in terms of the behaviours necessary to perform it and develop hypothesis about the personal characteristics necessary to perform those behaviours. Job descriptions specify the work to be done. Job specifications indicate the personal characteristics necessary to do the work.
To appreciate why the analysis of jobs and work is relevant and important, consider the following situation. If we start a brand-new organization, or new division of a larger organization, we are immediately faced with a host of problems, many which involve decisions about people. What are the broad goals of the new organization/division, and how should it be structured in order to achieve these goals? How many positions will we have to staff, and what will be the nature of these positions? What knowledge, abilities, skills, and other characteristics (KSAO’s) will be required? Before any decisions can be made, we must first define the jobs in question, specify what employee behaviours are necessary to perform them, and then develop hypotheses about personal characteristics necessary to perform those work behaviours. This process is known as job analysis.
Job analysis can underpin an organization’s structure and design by clarifying roles and is a fundamental tool that can be used in every phase of employment research and administration.
HR has its own jargon:
It is important to emphasize that there’s a wide variety of methods and techniques for collecting information about jobs and work. They vary on a number of dimensions and this variation creates choices.
A job analyst is confronted with at least eight different choices. These choices, briefly, include the following:
Job analysis consists of defining a job, specifying what employee behaviours are necessary to perform them, and developing hypotheses about the personal characteristic necessary to perform those work behaviours. The analyst produces a job description or written statement of what a worker actually does, how he or she does it, and why. This information can be used to determine what KSAOs are required to perform the job. Elements include:
This is a traditional, task-based job description. But some organizations are starting to develop behavioural job descriptions, which comprise broader abilities that are easier to alter as technologies and customer needs change.
Job specifications represent the KSAOs deemed necessary to perform a job. For example, astronauts and test pilots are required to have 20/20 uncorrected vision. But many job specifications are not rigid and inflexible and serve only as guidelines for recruitment, selection, and placement. Job specifications depend on the level of performance deemed acceptable and the degree to which some abilities can be substituted for others. Some people might be restricted from certain jobs because the specifications are inflexible, artificially high, or invalid. So, job specifications should indicate minimally acceptable standards for selection and later performance.
Job specifications identify personal characteristics that are valid for screening, selection, and placement. How are minimal qualifications (MQs) set? Levine et al. (1997) developed a methodology for determining MQs that was court approved.
A recent meta-analysis identified average levels of inter- and intra-rater reliability of job-analysis ratings. Job descriptions are valid to the extent that they accurately represent job content, environment, and conditions of employment. Job specifications are valid to the extent that persons possessing the personal characteristics believed necessary for successful job performance in fact do perform more effectively on their jobs than persons lacking such personal characteristics. However, many job-analysis processes are based on human judgment, and this judgment is often fallible. Sources of inaccuracy can be due to social and cognitive factors.
In actual organizational settings, there is not a readily available standard to assess the accuracy of job analysis. Job analysis reflects subjective judgment and is best viewed as an information-gathering tool to aid researchers in deciding what to do next.
Many methods exist for describing jobs, but they differ widely in the assumptions they make. Some are work oriented and some are worker oriented, each method has their own advantages and disadvantages. They will be discussed.
Observation of job incumbents and actual performance of the job by the analyst are two methods of gathering job information. Job observation is appropriate for jobs requiring a lot of manual, standardized, short-cycle activities, and job performance is appropriate for jobs that the job analyst can learn readily. Observations should include a representative sample of job behaviours. A job analyst should also be unobtrusive in their observations, lest the measuring process per se distort what is being measured, they shouldn’t get ‘in the way’. Observations and job performance are inappropriate for jobs requiring mental activity and concentration (lawyer, architect, network analyst etc.).
A functional job analysis (FJA) is often used to record observed tasks and attempts to identify exactly what the worker does in the job, as well as results of the worker’s behaviour (what gets done). There are certain work settings where direct, in-person observation isn’t feasible, for example in restaurants. But it is possible to obtain good views of work activity using digital cameras. The video can then be reviewed and coded offline.
The interview is probably the most commonly used technique for establishing the tasks, duties, and behaviours necessary both for standardized or non-standardized activities and for physical as well as mental work. The worker acts as their own observer and can report activities/behaviours that wouldn’t often be observed as well as those occurring over long time spans. The worker can report information that may not be available to the analyst from any other source. Questions used by interviewers may be checked for their appropriateness against the following criteria:
Panels of SMEs are often convened for different purposes in job analysis:
Failure to include a broad cross-section of experience in a sample of SMEs could lead to distorted ratings. SMEs are encouraged to discuss issues and resolve disagreements openly.
Questionnaires are usually standardized and require respondents either to check items that apply to a job or to rate items in terms of their relevance to the job in question. Generally, they are cheaper and quicker to administer than other job-analysis methods and can be completed at the respondent’s leisure, thereby avoiding lost production time. However, they are often time consuming and expensive to develop, and ambiguities or misunderstandings that might have been clarified in an interview are likely to go uncorrected. It can also be more difficult to follow up and augment information obtained in the questionnaires. Task inventories and checklists are questionnaires that are used to collect information about a particular job or occupation.
Since task inventories are work oriented and make static assumptions about jobs, behavioural implications are hard to established. Conversely, worker-oriented information describes how a job gets done and is concerned with generalized worker behaviours. The position analysis questionnaire (PAQ) is based on statistical analyses of primarily worker-oriented job elements and lends itself to quantitative statistical analysis. It consists of 194 items/job elements that fall into the following categories:
Individual items require the respondent either to check a job element if it applies or to rate it on an appropriate rating scale such as importance, time, or difficulty. Personal and organizational factors seem to have little impact on PAQ results. Research seems to indicate that the PAQ is more suited for use with blue-collar manufacturing jobs than it is for professional, managerial, and some technical jobs. Some limitations include:
To make the worker-oriented approach more applicable. The job element inventory (JEI) was developed, which is a structured questionnaire modelled after the PAQ, but with a lower reading level.
The F-JAS is one of the most thoroughly researched approaches to job analysis. Its objective I to describe jobs in terms of the abilities required to perform them. The ability-requirements taxonomy is intended to reflect the fewest independent ability categories that describe performance in the widest variety of tasks.
The critical-incidents approach involves the collection of a series of anecdotes of job behaviour that describe especially good or especially poor job performance. The method has value as it typically yields static and dynamic dimensions of jobs. Each anecdote describes:
Several sources of job information are available and may serve as useful supplements to the methods already described.
The general problem of how to group jobs together for purposes of cooperative validation, validity generalization, and administration of performance appraisal, promotional, and career-planning systems has a long history. Jobs may be grouped based on the abilities required to do them, task characteristics, behaviour description, or behaviour requirements.
The DOT contains descriptive information on more than 12,000 jobs. But that information is job specific and doesn’t provide a cross-job organizing structure that would allow comparisons of similarities and differences across jobs. To solve this, the U.S. Department of Labour sponsored a large-scale research project called the occupational informational network (O*Net). O*Net is a national occupational information system that provides comprehensive descriptions of the attributes of workers and jobs. It is based on four broad design principles:
The O*Net remains a work in progress. The basic framework for conceptualizing occupational information is now in place and future research will enhance the value of the O*Net. Once behavioural requirements have been specified, organizations can increase their effectiveness if they plan judiciously for the use of available human resources.
Despite dramatic changes in the structure of work, individual jobs remain the basic building blocks necessary to achieve broader organizational goals. The objective of job analysis is to define each job in terms of the behaviours necessary to perform it and develop hypothesis about the personal characteristics necessary to perform those behaviours. Job descriptions specify the work to be done. Job specifications indicate the personal characteristics necessary to do the work.
People are among any organization’s most critical resources; yet systematic approaches to workforce planning (WP), forecasting, and action programs designed to provide trained people to fill needs for particular skills are still evolving. Ultimate success in WP depends on many factors: the degree of integration of WP with strategic planning activities, the quality of the databases used to produce the talent inventory and forecasts of workforce supply and demand, the calibre of the action programs established, and the organization’s ability to implement the programs.
The judicious use of human resources is a perpetual problem in society. Emphasis on improved HR practice has arisen as a result of recognition by many top managers of the crucial role that talent plays in gaining and sustaining a competitive advantage in a global marketplace. It’s the source of innovation and renewal.
The purpose of WP is to anticipate and respond to needs emerging within and outside the organization, determine priorities, and allocate resources where they can do the most good. WP can mean different things to different people, but general agreement exists on its ultimate objective – the wisest, most effective use of scarce or abundant talent in the interest of the individual and the organization. So, we can broadly define WP as an effort to anticipate future business and environmental demand on an organization and to meet the HR requirements dictated by these conditions. This view of WP suggests several interrelated activities that together comprise a WP system:
With a clear understanding of the surpluses or deficits of employees in terms of their numbers, skills, and experience that are projected at some future point in time, it is possible to initiate action plans to rectify projected problems.
Strategies are the means that organizations use to compete, for example, through innovation, quality, speed, or cost leadership. How firms compete with each other and how they attain and sustain competitive advantage are the essence of what is known as strategic management. But organizations need to plan in order to develop strategies. Planning leads to success and helps organizations do a better job of coping with change. It also requires managers to define the organization’s objectives (thereby providing context, meaning, and direction for work) and without planning, objectives effective control is impossible.
The methodology above is a conventional view of the strategy-development process, and it answers two fundamental questions that are critical for managers:
While this is an exciting exercise for those crafting the strategy, it is not particularly engaging to those charged with implementing the strategy. In the alternative, or values-based, approach to developing strategy, organizations begin with a set of fundamental values that are energizing and capable of unlocking the human potential of their people. Then they sue these values to develop, or evaluate, management policies and practices that express organizational values in pragmatic ways on day-to-day basis.
The biggest benefit of strategic planning is its emphasis on growth, as it encourages managers to look for new opportunities rather than simply cutting workers to reduce expenses. But the danger of strategic planning is that it may lock companies into a particular vision of the future – one that may not come to pass. So how does one plan for the future when the future changes so quickly? The answer is to make the planning process more democratic. It needs to include a wide range of people, form line managers, to customers to suppliers.
HR strategy parallels and facilitates implementation of the strategic business plan. HR strategy is a set of priorities a firm uses to align its resources, policies, and programs with its strategic business plan. It requires a focus on planned major changes in the business and on critical issues. Planning proceeds top-down while execution proceeds bottom-up. There are four links in Boudreau’s model of HR strategy, starting from the top:
A talent inventory is a fundamental requirement of an effective WP system. It is an organized database of the existing skills, abilities, career interests, and experience of the current workforce. Prior to actual data collection, certain questions must be addressed:
Answers to these questions will provide direction and scope to subsequent efforts. When a talent inventory is linked to other databases, the set of such information can be used to form a complete human resource information system that is useful in a variety of situations.
Specific information to be stored in the inventory varies across organizations. At a general level, information is typically included in a profile developed for each individual, including the following:
Although secondary uses of the talent-inventory data may emerge, it’s important to specify the primary uses at the concept-development stage. This provides direction and scope regarding who and what kinds of data should be included. Some common uses of a talent inventory include identification of candidates for promotion, succession planning, assignments to special projects, transfer, training, work-force diversity planning, and more.
Talent inventories and workforce forecasts must complement each other; an inventory of present talent is not particularly useful for planning purposes unless it can be analyzed in terms of future workforce requirements. But workforce requirement forecasts are useless unless it can be evaluated relative to the current and projected future supply of workers available internally.
Workforce forecasts are attempts to estimate future labour requirements. There are two component processes in this task:
Forecasts of labour supply should be considered separately from forecasts of demand because each depends on a different set of variables and assumptions.
When an organization plans to expand, recruitment and hiring of new employees may be anticipated. Even when an organization isn’t growing, the aging of the present workforce, coupled with normal attrition, makes some recruitment and selection a virtual certainty for most firms. It’s therefore wise to examine forecasts of the external labour market for the kinds of employees that will be needed.
An organization’s current workforce provides a base from which to project the future supply of workers. It is a form of risk management. Perhaps the most common type of internal supply forecast is the leadership-succession plan.
Succession planning is one activity that is pervasive, well accepted, and integrated with strategic business planning among firms that do WP. Succession planning focuses on a few key objectives:
Demand forecasts are largely subjective, mainly because of multiple uncertainties regarding trends like changes in technology; consumer attitudes and patterns of buying behaviour; local, national, and international economics; number, size, and types of contracts won or lost; and government regulations that might open new markets or close off old ones. These forecasts are consequently more subjective than quantitative, though in practice a combination of the two is often used.
Pivotal jobs drive strategy and revenue and differentiate an organization in the marketplace. The objective is to deconstruct the business strategy to understand its implications for talent.
To develop a reasonable estimate the numbers and skills mix of people needed over some future time period, it’s important to tap into the collective wisdom of managers who are close to the scene of operations.
Accuracy in forecasting the demand for labour varies considerably by firm and by industry type. Factors like the duration of the planning period, the quality of the data on which forecasts are based, and the degree of integration of WP with strategic business planning all affect accuracy.
If forecasts provide genuinely useful to managers, they must result in an end product that is understandable and meaningful. Initial attempts at forecasting may result in voluminous printouts, but what’s really required is a concise statement of projected staffing requirements that integrates supply and demand forecasts.
Workforce demand forecasts affect a firm’s programs in many different areas, including recruitment, selection, performance management, training, transfer, and many other types of career-enhancement activities. These activities comprise “action programs” that help organizations adapt to changes in their environments.
Control and valuation are necessary features of any planning system, but organization-wide success in implementing HR strategy won’t occur through disjointed efforts. Broader systems are necessary to monitor performance. The function of control and evaluation is to guide the WP activities through time, identifying deviations from the plan and their causes.
Goal and objectives are fundamental to this process to serve as yardsticks in measuring performance. Qualitative as well as quantitative standards may be necessary in WP, though quantitative standards are preferable, since numbers make the control and evaluation process more objective and deviations from desired performance may be measured more precisely.
Effective control systems include period sampling and measurement of performance. In long-range planning efforts, the shorter-run, intermediate objectives must be established and monitored in order to serve as benchmarks on the path to more remote goals. Shorter-run objectives allow the planner to monitor performance through time and to take corrective action before the ultimate success of longer-range goals is jeopardized.
We noted earlier that qualitative and quantitative objectives can both play useful roles in WP. But the nature of evaluation and control should always match the degree of development of the rest of the WP process. An obvious advantage of quantitative information is that it highlights potential problem areas and can provide the basis for constructive discussion of the issues.
Responsibility for WP is a basic responsibility of every line manager in the organization. The line manger ultimately is responsible for integrating HR management functions, which include planning, supervision, performance appraisal, and job assignment. The role of the HR professional is to help line managers manage effectively by providing tools, information, training, and support.
To summarize, we plan in order to reduce the uncertainty of the future. We don’t have an infinite supply of any resources, and it’s important not only that we anticipate the future, but that we also actively try to influence it. Ultimate WP success rests on the quality of the action programs established to achieve HR objectives and on the organization’s ability to implement these programs.
People are among any organization’s most critical resources; yet systematic approaches to workforce planning (WP), forecasting, and action programs designed to provide trained people to fill needs for particular skills are still evolving. Ultimate success in WP depends on many factors: the degree of integration of WP with strategic planning activities, the quality of the databases used to produce the talent inventory and forecasts of workforce supply and demand, the calibre of the action programs established, and the organization’s ability to implement the programs.
There are many selection methods available. When selection is done sequentially, the earlier stages often are called screening, which the term selection being reserved for the more intensive final stages. New technological developments now allow for the collection of information using procedures other than the traditional paper pencil. These technologies allow for more flexibility regarding data collection, but also present some unique challenges.
Most initial screening methods are based on the applicant’s statement of what he or she did in the past. But recommendations and reference checks rely on the opinions of relevant others to help evaluate what and how well the applicant did in the past. Generally, four kinds of information are obtainable:
Certain preconditions must be satisfied for a recommendation to make a meaningful contribution to the screening and selection process.
Decisions are made on the basis of letters of recommendations, although they are considered by some to be of little value for not discriminating between candidates enough. If the letters are to be meaningful, they should contain the following information:
Records and references checks are the most frequently used method to screen outside candidates for all types and levels of jobs. Reference checking is a valuable screening tool. To be useful, however, reference checks should be:
Reference checking can also be done via telephone interviews. Implementing a procedure called structured telephone reference check (STRC). Questions focus on measuring three constructs: conscientiousness, agreeableness, and customer focus. Recruiters ask each referee to rate the applicant compared to others they have known in similar positions and to elaborate on their responses.
Recommendations and reference checks can provide valuable information despite some sources providing sketchy information for fear of violating some legal or ethical constraint. Few organizations are willing to abandon the practice of recommendation and reference checking despite the shortcomings. A key issue to consider is the extent to which the constructs assessed by recommendations and reference checks provide unique information above and beyond other data collection methods, such as the employment interview and personality tests.
Selection and placement decisions can often be improved when personal history data are considered along with other information. One of the most widely used selection procedures is the application form. They can be sued to sample past or present behaviour briefly but reliably. To avoid potential problems, consider omitting questions that:
The scoring of application forms capitalizes on three hallmarks of progress in selection: standardization, quantification, and understanding.
One might suspect that certain aspects of an individual’s total background should be related to later job success in a specific position. The WAB technique provides a means of identifying which aspects reliably distinguish groups of effective and ineffective employees. Weights are assigned according to the predictive power of each item.
It is a self-report instrument, but items are exclusively in a multiple-choice format, typically a larger sample of items is included, and items are included that are not normally covered in a WAB. Usually, BIBs are developed specifically to predict success in a particular type of work.
Can application forms and biographical data be distorted intentionally by job applicants? Yes, they can. For example, the ‘sweetening’ of résumés is not uncommon, one study reported that 20-25% of all applications include at least one major fabrication. The extent of self-reported distortion was found to be even higher when data were collected using the randomized-response technique, which guarantees response anonymity and allows for more honest self-reports.
There are numerous situational and personal characteristics that can influence whether someone is likely to fake. Some of these characteristics include beliefs about faking, which are beyond the control of an examiner. But there are situational characteristics that an examiner can influence. For example, the extent to which information can be verified. More objective and verifiable items are less amenable to distortion.
Some have advocated that only historical and verifiable experiences, events, or situations be classified as biographical items. Using this approach, most items on an application blank would be considered biographical. But if only historical, verifiable items are included on a BIB, then questions like “Did you ever build a model airplane that flew?” would not be asked.
Properly cross-validated WABS and BIBs have been developed for many occupations. Criteria include turnover, absenteeism, rate of salary increase, performance ratings, number of publications, success in training, creativity ratings, sales volume, credit risk, and employee theft. Evidence shows that the validity of personal history data as a predictor of future work behaviour is quite good.
However, commonly, biodata keys are developed on samples of job incumbents, and it is assumed that the results generalize to applicants. So, the implication is to match incumbent and application samples as closely as possible, do not assume that predictive and concurrent validities are similar for the derivation and validation of BIB scoring keys.
Since the passage of TITL VII of the 1964 Civil Rights Act, personal history items have come under intense legal scrutiny. While not necessarily unfairly discriminatory, such items legitimately may be included in the selection process only if it can be shown that (1) they are job related and (2) do not fairly discriminate against either minority or non-minority subgroups. Results from several studies have concluded that biodata inventories are relatively free of adverse impact, particularly when compared to the degree of adverse impact typically observe din cognitive ability tests.
Criterion-related validity is not the only consideration in establishing job relatedness. Items that bear no rational relationship to the job in question are unlikely to be acceptable to courts or regulatory agencies, especially if total scores produce adverse impact on a protected group. The rational approach is more prudent and reasonable, including job analysis information to deduce hypotheses concerning success on the job under study and to seek form existing, previously researched sources either items or factors that address the hypothesis. The rational approach has the advantage of enhancing both the utility of selection procedures and our understanding of how and why they work. It is also probably the only legally defensible approach for the use of personal history data in employment selection. But in this approach, the validity of biodata items can be affected by the life stage in which the item I anchored. Framing an item around a specific, hypothesized developmental time is likely to help applicants provide more accurate responses by giving them a specific context to which to relate their response.
Written honesty tests (integrity tests) fall into two major categories:
Both these tests have a common latent structure reflecting conscientiousness, agreeableness, and emotional stability.
Although there are encouraging findings for the validity of honesty tests there are four issues that have yet to be resolved:
Researchers are thus exploring alternative ways to assess integrity and other personality-based constructs. One promising approach is conditional reasoning, which focuses on how people solve what appear to be traditional inductive-reasoning problems. But the true intent of the scenarios presented is to determine respondents’ solutions based on their implicit biases and preferences.
Judgmental evaluations of the previous work experience and training of job applicants is a common part of initial screening. Sometimes evaluation is subjective and informal, and sometimes it’s accomplished in a formal manner according to a standardized method. Evaluating job experience isn’t as easy as you may think because experience includes both qualitative and quantitative components that interact and accrue over time. Work experience is multidimensional and temporally dynamic.
The behavioural consistency method shows the highest mean validity. It requires applicants to describe their major achievements in several job-related areas (behavioural dimensions). A similar approach to evaluation, one most appropriate for selecting professionals, is the accomplishment record (AR) method. It is an objective method for evaluating those records. It’s a type of biodata/maximum performance/self-report instrument that appears to tap a component of an individual’s history that isn’t measured by typical biographical inventories.
CBS can be used to simply convert a screening tool from paper to an electronic format that is called an electronic page turner. Another method is computer-adaptive testing (CAT), which presents all applicants with a set of items of average difficulty, and, if responses are correct, items with higher levels of difficulty. CAT uses IRT to estimate an applicant’s level on the underlying trait based on the relative difficulty of the items answered correctly and incorrectly.
HR specialists now have the opportunity to implement CBS in their organizations. If implemented well, CBS can carry many advantages. The use of computers/the internet is making testing cheaper and faster, and it may serve as a catalyst for even more widespread use of tests for employment purposes.
Drug screening tests started in the military, spread to the sports world, and now are becoming common in employment. Critics see it as an invasion of privacy, but they do concede that employees in jobs where public safety is crucial should be screened for drug use. If drug screening will be used with employees and job applicants, tell them in advance that drug testing will be a routine part of their employment. To enhance perceptions of fairness, employers should provide advance notice of drug tests, preserve the right to appeal, emphasize that drug testing is a means to enhance workplace safety, attempt to minimize invasiveness, and train supervisors.
Polygraphs are intended to detect deception and are based on the measurement of physiological processes and changes in those processes. The polygraph’s accuracy in distinguishing actual or potential security violators form innocent test takers is insufficient to justify reliance on its use in employee security screening in federal agencies. In spite of the overall conclusion that polygraphs aren’t very accurate, potential alternatives (like measuring brain activity through electrical and imaging studies, haven’t yet shown to outperform the polygraph. So, it’s likely that polygraphs will continue to be used for employee security screening until other alternatives become available.
Use of the interview in selection today is almost universal. Maybe because the interview serves as much more than just a selection device. It is a communication process where the applicant earns more about the job and the organization and begins to develop some realistic expectations about both. As a selection device, the interview performs two vital functions:
Well-designed interviews can be helpful because they allow examiners to gather information on constructs that are not typically assessed via other means, like empathy and personal initiative.
Distortion of interview information is probable, the general tendency being to upgrade rather than downgrade prior work experience. Interviewees tend to be affected by social desirability bias. Applicants also tend to engage in influence tactics to create a positive impression by displaying self-promotion behaviours as well as impression-management behaviours. According to a study, candidates tend to report their GPAs and SAT scores more accurately to computers than in face-to-face interviews.
Interviewing is a difficult cognitive and social task. Managing a smooth social exchange while simultaneously processing information about an applicant makes interviewing uniquely difficult among all managerial tasks. Research continues to focus on cognitive factors.
Literature attests to the fact that the decision-making process involved in the interview is affected by several factors. Posthuma et al. (2002) provided a useful framework summarizing and describing this research. This taxonomy considers factors affecting the interview decision-making process in the following areas:
Emphasis on employment interview research within a person-perception framework should continue and consider the social and interpersonal dynamics of the interview, including affective reactions on the part of both the applicant and the interviewer. The interviewer’s job is to develop accurate perceptions of applicants and to evaluate those perceptions in light of job requirements.
As technology progresses, HR specialists will be able to take advantage of new tools. It’s suggested that VRT can be one such technological advance that has the potential to alter the way screening is done. The implementation of VRT presents some challenges, however.
But even the pace of technological advances we should expect that some of the present limitations will soon be overcome.
There are many selection methods available. When selection is done sequentially, the earlier stages often are called screening, which the term selection being reserved for the more intensive final stages. New technological developments now allow for the collection of information using procedures other than the traditional paper pencil. These technologies allow for more flexibility regarding data collection, but also present some unique challenges.
Managerial selection is a topic that deserves separate treatment because of the unique problems associated with describing the components of managerial effectiveness and developing behaviourally based predictor measures to forecast managerial effectiveness accurately. An assortment of data-collection techniques is currently available – cognitive ability tests, objective personality inventories, personal history data, peer ratings – each demonstrating varying degrees of predictive success in particular situations.
HR specialists engaged in managerial selection face special challenges associated with the choice of predictors, criterion measurements, and the many practical difficulties encountered in conducting rigorous research in this area. Results from several studies suggest that different knowledge, skills, and abilities are necessary for success at the various levels within management. It is appropriate to examine managerial selection in some detail.
Objective and subjective indicators are frequently used to measure managerial effectiveness. Effective management can be defined in terms of organizational outcomes. To be a successful optimizer, a manager needs to possess implicit traits, like business acumen, customer orientation, results orientation, strategic thinking, innovation and risk taking, integrity, and interpersonal maturity. The emphasis in this definition is on managerial actions or behaviours judged relevant and important for optimizing resources. Many managerial prediction studies have used objective, global, or administrative criteria. But overall measures or ratings of success include multiple factors, so such measures often serve to obscure more than they reveal about the behavioural bases for managerial success.
To summarize the managerial criterion problem, we point out that global estimates of managerial success have proven useful in man validation studies but contribute little to our understanding of the wide varieties of job behaviours indicative of managerial effectiveness. Employers have to consider supplementing global criteria with systematic observations and recordings of behaviour, so that a richer, fuller understanding of all the paths to managerial success might emerge.
Management-selection decisions take place in the context of both organizational conditions and environmental conditions. This may partially explain why predictors of initial performance are not necessarily as good for predicting subsequent performance as other predictors. Contextual factors also explain differences in HR practices across organizations. A model of executive selection and performance should consider the person as well as situational characteristics.
We have discussed tests as signs or indicators of predispositions to behave in certain ways rather than as samples of the characteristic behaviour of individuals. Some argue, however, that prediction efforts are likely to be much more fruitful if we focus on meaningful samples of behaviour rather than on signs or predispositions. Because selection measures are really surrogates or substitutes of for criteria, we should be trying to obtain. Measures that are as similar to criteria as possible. In the context of managerial selection, two types of work samples are used.
The most popular types of work samples will be discussed in the next sections.
A group of participants is asked to carry on a discussion about some topic for a period of time. Face validity is enhanced if the discussion is about a job-related topic. Raters observe and rate the performance of each participant. Seven characteristics are rated: aggressiveness, persuasiveness/selling ability, oral communications, self-confidence, resistance to stress, energy level, and interpersonal contact.
Individual work sample designed to simulate important aspects of the manager’s position. Different types of in-basket tests may be designed, corresponding to the different requirements of various levels of managerial jobs. Each candidate faces the same complex set of problem situations, although the situation is relatively unstructured. At the conclusion of the test, each candidate leaves behind a packet of notes, memos, letters, and so forth, which constitute the record of his behaviour. The test is scored in terms of job-relevant characteristics enumerated at the outset.
The business game is a ‘live’ case. For example, in assessing candidates for jobs as Army recruiters, two exercises required participants to make phone calls to assessors who role-played two prospective recruits and then to meet for follow-up interviews with these role-playing assessors. A desirable feature of the business game is that intelligence, as measured by cognitive ability tests, seems to have no effect on the success of players. A variation focuses on the effects of measuring ‘cognitive complexity’ on managerial performance, which concerns how people think and behave. It is independent of the content of executive thought and action and reflects a style that is difficult to assess with paper-and-pencil instruments.
They are considered a low-fidelity work sample. They consist of a series of job-related situations presented in written, verbal, or visual form, and therefore it can be argued that they are not truly work samples as hypothetical behaviours are assessed instead of actual behaviours.
The AC is a method that brings together many of the instruments and techniques of managerial selection. Because of its nature, the likelihood of successfully predicting future performance is enhanced. They have been found successful at predicting long-term career success. The three most popular reasons for developing an AC are selection, promotion, and development planning. The duration of the center varies with the level of candidate assessment, as does the ratio of assessors to participants.
Some organizations mix managers with HR department or other staff members as assessors. Generally, assessors hold positions about two organizational levels above that of the individuals being assessed. Few use professional psychologists despite evidence indicating that AC validities are higher when assessors are psychologists rather than line managers.
The performance-feedback process is crucial. Most organizations emphasize to candidates that the AC is only one portion of the assessment process. It’s just a supplement to other performance-appraisal information and each candidate has an opportunity on the job to refute negative insights gained from assessment.
Interrater reliabilities vary across studies between 0.6 to 0.95. raters tend to appraise similar aspects of performance in candidates. In terms of temporal stability, an important question concerns the extent to which dimension ratings made by individual assessors change over time. Standardizing an AC program, so that each candidate receives the same treatment, is important so that differences in performance can be attributed to differences in candidates’ abilities and skills, and not to extraneous factors.
Applicants tend to view ACs as more face valid than cognitive ability tests and, as a result, tend to be more satisfied with the selection process, the job, and the organization. Reviews of the predictive validity of AC ratings and subsequent promotion and performance generally have been positive. Adverse impact is less of a problem in an AC compared to an aptitude test designed to assess the cognitive abilities that are important for the successful performance of work behaviours in professional occupations.
The cost of the procedure is incidental compared to the possible losses associated with promotion of the wrong person into a management job. Given large individual differences in job performance, use of a more valid procedure has a substantial bottom-line impact.
Different combinations of predictors lead to different levels of predictive efficiency, and also to different levels of adverse impact. Both issues deserve serious attention when choosing (a combination) of selection procedures.
Managerial selection is a topic that deserves separate treatment because of the unique problems associated with describing the components of managerial effectiveness and developing behaviourally based predictor measures to forecast managerial effectiveness accurately. An assortment of data-collection techniques is currently available – cognitive ability tests, objective personality inventories, personal history data, peer ratings – each demonstrating varying degrees of predictive success in particular situations.
If variability in physical and psychological characteristics were not so pervasive a phenomenon, there would be little need for selection of people to fill jobs. Without variability in abilities, aptitudes, interests, and personality traits, we’d forecast identical levels of job performance for all job applicants. In personnel selection decisions are made about individuals and are concerned with the assignment of individuals to courses of action whose outcomes are important to the institutions or individuals involved.
This chapter will look first at the traditional/classical validity approach to personnel selection. Then will consider decision theory and utility analysis and present alternative models. The overall aim is to arouse and sensitize the reader to thinking in terms of utility and the broader organizational context of selection decision making.
Individual differences provide the basic rationale for selection. The goal of the selection process is to capitalize on individual differences in order to select people who possess the greatest amount of particular characteristics judged important for job success. In the classical approach, job analysis is the cornerstone of the entire process. Based on this, information sensitive, relevant, and reliable criteria are selected. Simultaneously, predictors are selected that presumably bear some relationship to the criteria to be predicted. Predictors should be chosen based on competent job analysis information; this information provides clues about the type(s) of predictor(s) most likely to forecast criterion performance accurately. After this, the predictor/criterion relationship is assessed and if the relationship is strong, the predictor is accepted and cross-validated. If it is not strong, the predictor is rejected and another one selected.
The statistical technique of simple and multiple linear regression are based on the general linear model. Linear models are very robust, and decision makers use them in various contexts. Suppressor variables can affect a given predictor-criterion relationship, even though such variables bear little or no direct relationship to the criterion itself. But they do bear a significant relationship to the predictor. Horst (1941) pointed out that variables that have exactly the opposite characteristics of conventional predictors may act to produce marked increments in the size of multiple regression. Suppressor variables are characterized by a lack of association with the criterion and a high intercorrelation with one or more other predictors. Since the only function suppressor variables serve is to remove redundancy in measurement, comparative predictive gain often can be achieved by using a more conventional variable as an additional predictor.
Following a taxonomy developed by Meehl (1954), we will distinguish between strategies for combining data and various types of instruments used. Data-combination strategies are mechanical (statistical) if individuals are assessed on some instrument(s), if they are assigned scores based on that assessment, and if the scores subsequently are correlated with a criterion measure. Predictions are judgmental (clinical) if a set of scores or impressions must be combined subjectively in order to forecast criterion status. Data collection can also be judgmental or mechanical, leading to six prediction strategies.
The best strategy of all (in that it always has proven to be either equal to or better than competing strategies) is the mechanical composite, in which information is collected both by mechanical and judgmental methods but is combined mechanically.
Although the multiple-regression approach constitutes the basic prediction model, its use in any particular situation requires that its assumptions, advantages, and disadvantages be weighed against those of alternative models. We will now discuss other approaches. When the assumptions of multiple regression are untenable, then a different strategy is called for.
In some selection situations, proficiency on one predictor cannot compensate for deficiency on another. When some minimal level of proficiency on one or more variables is crucial for job success and no substitution is allowed, a simple or multiple cutoff approach is appropriate. Selection is then made from the group of applicants who meet or exceed the required cut-offs on all predictors.
In multiple hurdle, or sequential, decision strategies, cutoff scores on some predictor may be used to make investigatory decisions. Applicants are provisionally accepted and assessed further to determine whether or not they should be accepted permanently. The investigatory decisions may continue through several additional stages of subsequent testing before final decisions are made regarding all applicants.
The general objective of the classical validity approach can be expressed concisely: the best selection battery is the one that yields the highest multiple R. this will minimize selection errors, total emphasis is, therefore, placed on measurement and prediction. Overall, there is a need to consider broader organizational issues so that decision making is not simply legal-centric and validity-centric but organizationally sensible.
Taylor and Russel (1939) pointed out that utility depends not only on the validity of a selection measure but also on:
They published tables illustrating how the interaction among these three parameters affects the success ratio (the proportion of selected applicants who subsequently are judged successful). A decision-theory approach considers not only validity, but also SR, BR, and other contextual and organizational issues, unlike the classical approach.
There are four decision-outcome combinations (erroneous rejections, correct acceptances, erroneous acceptances, and correct rejections). The classical validity approach treats both kinds of decision errors as equally costly, but in most practical selection situations, organizations attach different utilities to these outcomes. The classical approach is deficient to the extent that it emphasizes measurement and prediction rather than the outcomes of decisions.
By focusing only on selection, the classical validity approach neglects the implications of selection decisions for the rest of the HR system. When an organization focuses solely on selection, the exclusion of other related functions, the performance effectiveness of the overall HR system may suffer considerably. The procedure must be evaluated in terms of its total benefits to the organization. The main advantage of decision-theory to selection is that it addresses the SR and BR parameters and compels the decision maker to consider explicitly the kinds of judgments they have to make.
Operating executives demand estimates of expected costs and benefits of HR programs. Unfortunately, few HR programs actually are evaluated in these terms, although techniques for doing so have been available for years. The utility of a selection device is the degree to which its use improves the quality of the individuals selected beyond what would have occurred had that device not been sued. Quality may be defined in terms of:
While certain generic economic objectives (profit maximization, cost minimization) are common to all private-sector firms, strategic opportunities are not, and they don’t occur within firms in a uniform, predictable way. As strategic objectives (economic survival, growth in market share) vary, so must the “alignment” of labour, capital, and equipment resources. Strategic goals change over time, so assessment of the relative contribution of a selection system is likely to also change.
To be more useful to decision makers, utility models should therefore be able to provide answers to the following questions:
Russel et al. (1993) presented modifications of the traditional utility equation to reflect changing contributions of the selection system over time (validity and SDy) and changes in what is important to strategic HR decision makers (strategic needs). Such modifications yield a more realistic view of how firms benefit form personnel selection.
If variability in physical and psychological characteristics were not so pervasive a phenomenon, there would be little need for selection of people to fill jobs. Without variability in abilities, aptitudes, interests, and personality traits, we’d forecast identical levels of job performance for all job applicants. In personnel selection decisions are made about individuals and are concerned with the assignment of individuals to courses of action whose outcomes are important to the institutions or individuals involved.
Training and development imply changes – change sin skill, knowledge, attitude, or social behaviour. Although there are many strategies for effecting changes, training and development are common and important ones. Various theoretical models can help guide training and development efforts. These include the individual differences model, principles of learning and transfer, motivation theory, goal setting, and behaviour modelling. Each offers a systematic approach to training and development, and each emphasizes a different aspect of the training process.
Change, growth, and development are bald facts of organizational life. As companies lose workers in one department, they are adding people with different skills in another, continually tailoring their workforces to fit the available work and adjusting quickly to swings in demand for products and services. Additionally, modern organizations face other major challenges:
These trends suggest a dual responsibility: the organization is responsible for providing an atmosphere that will support and encourage change, and the individual is responsible for deriving maximum benefit from the learning opportunities provided.
Both training and development entail the following general properties and characteristics:
We start by examining organizational and individual characteristics related to effective training. Then we consider fundamental requirements of sound training practice.
Surveys of corporate training and development practices have found consistently that four characteristics seem to distinguish companies with the most effective training practices:
Evidence indicates that training success is determined not only by the quality of training, but also by the interpersonal, social, and structural characteristics that reflect the relationship of the trainee and the training program to the broader organizational context. Variables like organizational support, and the individual’s readiness for training, can enhance or detract from the direct impact of training.
To reach the full potential of the training and development enterprise, it is important to resist the temptation to emphasize technology and techniques; instead, define first what is to be learned and what the content of training and development should be. Program development comprises three major phases, each of which is essential for success:
There are six steps in defining what is to be learned and what the substantive content of training and development should be:
Failure to consider the broader organizational environment often contributes to programs that either result in no observable changes in attitudes or behaviour or, worse yet, produce negative results that do more harm than good. To promote better alignment, organizations should do three things:
The purpose of needs assessment is determining if training is necessary before expending resources on it. In general, the methods proposed for uncovering specific training needs can be subsumed under a three-facet approach. These are:
Each of these facets contributes something but to be most fruitful, all three must be conducted in a continuing, ongoing manner and at all three levels.
A fruitful approach to identify individual training needs is to combine behaviourally based performance-management systems with individual development plans (IDPs) derived from self-analysis. IDPs provide a road map for self-development and should include statements of aims, definitions, and ideas about priorities.
Specification of training objectives becomes possible once training and development needs have been identified. This is the fundamental step in training design. Each objective should describe:
There are seven features of the learning environment that facilitate learning and transfer:
The basic principles of training design consist of:
There has been an increasing emphasis on team performance. A team is a group of individuals working together toward a common goal. Researchers have developed a systematic approach to team training that includes four steps.
How to acquire appropriate responses is an important aspect to consider because different people have their own favourite ways of learning. The growing popularity of forms of technology-delivered instruction offers the opportunity to tailor learning environments to individuals and transfers more control to learners about how and what to learn. This can have a negative effect, especially among low-ability or inexperienced learners. Individual differences in abilities, interests, and personality play a central role in applied psychology. Mental ability alone predicts success in training in a wide variety of jobs, so does trainability.
If training and development are to have any long-term benefit, then efficient learning, long-term retention, and positive transfer to the job situation are essential. Important learning principles include:
Training and development imply changes – change sin skill, knowledge, attitude, or social behaviour. Although there are many strategies for effecting changes, training and development are common and important ones. Various theoretical models can help guide training and development efforts. These include the individual differences model, principles of learning and transfer, motivation theory, goal setting, and behaviour modelling. Each offers a systematic approach to training and development, and each emphasizes a different aspect of the training process.
The literature on training and development techniques is massive. Generally, however, it falls into three categories: information-presentation techniques, simulation methods, and on-the-job training. Selecting a technique will yield maximal payoff when designers of training follow a two-step sequence: first, specify clearly what is to be learned; then choose a specific method or technique that matches training requirements. When measuring training and development outcomes, be sure to include:
Once defining what trainees should learn and what the content of training and development should be, the critical question becomes “how should we teach the content and who should do it?”. We will highlight some of the more popular techniques, with special attention to computer-based training, and then present a set of criteria for judging the adequacy of training methods. Training and development techniques fall into three categories:
CBT is the presentation of text, graphics, video, audio, or animation via computer for the purpose of building job-relevant knowledge and skill. It is a form of technology-delivered instruction. To be effective, learner-centered instructional technologies have to be maximally effective and have to be designed to encourage active learning in participants. To do that, consider incorporating the following four principles into the CBT design:
A training method can be effective only if it’s used appropriately. Here, appropriate use means rigid adherence to a two-step sequence: first, define what trainees are to learn, and only then choose a particular method that best fits these requirements. The following checklist is useful in selecting a particular technique, the technique should:
Either a program has value, or it does not. But in practice, matters are rarely so simple, for outcomes are usually a matter of degree. To assess outcomes, we need to document how trainees actually behave back on their jobs and the relevance of their behaviour to the objectives of the organization.
There are at least four reasons to evaluate training:
These can be summarized as decision making, feedback, and marketing.
The task of evaluation is counting. The most difficult tasks of evaluation are deciding what things to count and developing routine methods for counting them. In the context of training, here is what counts:
Trainers must address these issues before they can conduct a truly meaningful evaluation of training’s impact.
Regardless of the measures used, the goal is to be able to make meaningful inferences and rule out alternative explanations for results. To do this, it’s important to administer the measures according to some logical plan or procedure. Many designs are available for this purpose.
There continue to be calls for establishing the return on investment (ROI) for training, particularly as training activities continue to be outsourced and new forms of technology-delivered instruction are marketed as cost effective. ROI includes the following:
The major advantage of a ROI is that it’s simple and widely accepted, blending in one number all the major ingredients of profitability and it can be compared to other opportunities. A major disadvantage is that there is much subjectivity in some of its items and that ROI calculations focus on one HR investment at a time and fail to consider how those investments work together as a portfolio.
The real payoff from program-evaluation data is that when the data lead to organizational decisions that are strategically important. To do that it’s important to embed measures in a broader framework that derives strategic change.
An experimental design is a plan, an outline for conceptualizing the relations among the variables of a research study. It also implies how to control the research situation and how to analyze the data. Experimental designs can be used with internal or external criteria.
The following table presents examples of several experimental designs. They are by no means exhaustive; they merely illustrate the different kinds of inferences that researchers may draw and, therefore, underline the importance of considering experimental designs before training.
Exclusive emphasis on the design aspects of measuring training outcomes is rather narrow in scope. An experiment usually settles on a single criterion dimension, and the whole effort depends on observations of that dimension. So experimental designs are quite limited in the information they can provide. Ideally an experiment should be part of a continuous feedback process rather than just an isolated event or demonstration.
Meta-analytic reviews have shown that effect sizes obtained from single group pretest-posttest designs (design B) are systematically higher than those obtained from control or comparison-group designs.
It is important to ensure that any attempt to measure training outcomes through the use of an experimental design has adequate statistical power.
Lastly, experiments often fail to focus on the real goals of an organization.
In field settings, there are often major obstacles to conducting experiments. True experiments need manipulation of at least one independent variable, the random assignment of participants and treatment groups. Some less-complete designs can provide useful data even though a true experiment is not possible. Like a true experiment, a quasi-experimental design aims to establish a cause-and-effect relationship between variables. But unlike a true experiment, a quasi-experiment does not rely on random assignment. Subjects are instead assigned to groups based on non-random criteria. Examples of quasi-experimental designs are:
The problem of statistical versus practical significance is relevant for the assessment of training outcomes. Demonstrations of statistically significant change scores may mean little in a practical sense. Researchers must show that the effects of training do make a difference to organizational goals in terms of lowered production costs, increased sales, fewer grievances, and so on. External criteria are important.
The real test is whether a new training program is superior to previous or existing methods for accomplishing the same objectives. Firms need systematic research to evaluate the effects of independent variables that are likely to affect training outcomes to show this. The concept of statistical significance, while not trivial, doesn’t guarantee practical or theoretical significance.
Experimental control is just one strategy for responding to criticisms of the internal or statistical conclusion validity of a research design. A logical analysis of the process and content of training programs can further enhance our understanding of why we obtained the results we did. The ‘systems’ aspects of training impact integrated with the consideration of qualitative and quantitative issues can make training outcomes much more meaningful.
The literature on training and development techniques is massive. Generally, however, it falls into three categories: information-presentation techniques, simulation methods, and on-the-job training. Selecting a technique will yield maximal payoff when designers of training follow a two-step sequence: first, specify clearly what is to be learned; then choose a specific method or technique that matches training requirements. When measuring training and development outcomes, be sure to include:
Organizational responsibility (OR) is defined as context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance. The challenge of being responsible and ethical in managing people does not lie in the mechanical application of moral prescriptions. It is found in the process of creating and maintaining genuine relationships from which to address ethical dilemmas that cannot be covered by prescription. One’s personal values play an important part in this process.
By taking into account stakeholders’ expectations, the chances of causing harm are reduced and, therefore, OR leads to more ethical actions and policies. To be ethical is to conform to moral standards or to conform to the standards of conduct of a given group.
The purpose of this chapter is to highlight emerging ethical concerns in several important areas. We cannot prescribe the content of responsible and ethical behaviour across all conceivable situations, but we can prescribe processes that can lead to an acceptable (and temporary) consensus among interested parties regarding an ethical course of action.
Some important definitions:
The more encompassing term ‘organizational’ instead of the narrower term ‘corporate’ is used to emphasize that responsibility refers to any type of organization. Though initially seen as an exclusive realm of large corporations, we see OR as also possible and necessary for start-ups and small and medium-sized organizations if they want to be successful in today’s globalized and hypercompetitive economy. Finally, the term ‘responsibility’ is used instead of the narrower phrase ‘social responsibility’ to highlight that responsibility refers to several types of stakeholders, including employees and suppliers, and issues that subsume but also go beyond topics defined as being in the social realm. The definition of OR refers to the triple bottom line of economic, social, and environmental performance. The traditional view is that these performance dimensions are negatively correlated.
In spite of the scepticism surrounding OR, there are two factors that now serve as important catalysts of OR: changes in twenty-first-century organizations and accountability. To summarize, twenty-first-century organizations find it increasingly difficult to hide information about their policies and actions. Additionally, the twenty-first-century organization is increasingly dependent on a global network of stakeholders who have expectations about the organization’s policies and actions. These factors have led to increased accountability, which is an important motivator for organizations to act responsibly.
Empirical evidence suggests that pursuing social and environmental goals is related to positive economic results. There are clear benefits for organizations that choose to pursue the triple bottom line instead of economic performance exclusively. Organizations are successful in the long run only if they both please shareholders and also please other stakeholders. The challenge is ‘how to ensure that the firm pays wider attention to the needs of multiple stakeholders whilst also delivering shareholder value.
Evidence thus far indicates that there is an overall positive relationship between social and environmental performance and financial performance, but the strength of this relationship varies depending on how one operationalizes social and/or environmental performance and financial performance.
Anguinis proposed a new concept of strategic responsibility management (SRM). It is a process allowing organizations to approach responsibility actions in a systematic and strategic manner. It involves the following steps:
Since its inception, the field of HRM has walked a tightrope trying to balance employee well-being with maximization of organization performance and profits. This dual role is a source of tension, as is reflected in the test-score banding literature and the staffing decision making literature. OR is consistent with HRM’s mission as well as the scientist-practitioner model. However, there is still concern and scepticism on the part of some that OR is more rhetoric and public relations than reality. OR gives an opportunity for HRM research and practitioners to make contributions consistent with the field’s mission and that have the potential to elevate the field in the eyes of society.
The U.S. Constitution and other federal state laws and executive orders defines legally acceptable behaviour in the public and private sectors of the economy. But while illegal behaviours are by definition unethical, meeting minimal legal standards does not necessarily imply conformity to accepted guidelines of the community. These legal standards have affected HR research and practice in a few ways. Employees are aware of these issues and are willing to take legal action when they believe their privacy rights have been violated by their employers.
Attention in this area centers on three main issues: the kind of information retained about individuals, how that information is used, and the extent to which that information can be disclosed to others. Unfortunately, many companies are failing to safeguard the privacy of their employees. Privacy concerns affect applicants’ test-taking motivation, organizational attraction, and organizational intentions. Employees are likely to provide personal information electronically that they would not provide in person, so organizations should take extra care in handling electronically gathered information. It is important for employers to establish a privacy-protection policy that sets up guidelines on requests for various types of data, informs employees of information-handling policies, and is familiar with state and federal laws regarding privacy.
HR decisions to select, promote, train, or transfer are often major events in individual’s careers. Often these decisions are made with the aid of tests, interviews, situational exercises, performance appraisals, and other techniques developed by HR experts, often I/O psychologists. They must be concerned with questions of fairness, propriety, and individual rights, as well as other ethical issues. They have obligations to their profession, to job applicants and employees, and to their employers.
We have discussed regulations, policies, and procedures that encourage individuals to behave ethically. But there are individual differences in the ethical behaviour of individuals, even when contextual variables are the same. Although the implementation of ethics programs can certainly mitigate unethical behaviour, the ultimate success of such efforts depends on an interaction between how the system is implemented and individual differences regarding such variables as cognitive ability, moral development, gender, and personal values. One should expect variability in the success rate of corporate ethics programs.
In field settings, researchers encounter social systems comprising people who hold positions in a hierarchy and who also have relationships with consumers, government, unions, and other public institutions. It’s proposed that most ethical concerns in organizational research arise from researchers’ multiple and conflicting roles within the organization where research is being conducted. Researchers have their own expectations and guidelines concerning research, while organizations, managers, and employees may hold different sets of beliefs concerning research. For example, a researcher may view the purpose of a concurrent validation study of an integrity test as a step to justify its use for selecting applicants. Management may perceive it as a way, unbeknown to employees, to weed out current employees who may be stealing. Ethical issues may arise in:
Organizations can be viewed as role systems – as sets of relations among people that are maintained partly by the expectations people have for one another. Problems must be resolved through mutual collaboration and appeal to common goals. Ethical dilemmas arise as a result of:
Tackling the sources of ethical issues will help minimize them. The achievement of ethical solutions to operating problems is plainly a matter of concern to all parties.
Organizational responsibility (OR) is defined as context-specific organizational actions and policies that take into account stakeholders’ expectations and the triple bottom line of economic, social, and environmental performance. The challenge of being responsible and ethical in managing people does not lie in the mechanical application of moral prescriptions. It is found in the process of creating and maintaining genuine relationships from which to address ethical dilemmas that cannot be covered by prescription. One’s personal values play an important part in this process.
Globalization is a fact of modern organizational life, it refers to commerce without borders, along with the interdependence of business operations in different locations. This chapters emphasizes five main areas:
Though the behavioural implications of globalization can be addressed from various perspectives, we choose to focus only on five of them.
The demise of communism, the fall of trade barriers, and the rise of networked information have unleashed a revolution in business. Market capitalism guides every major country on earth. Many factors drive change, but none are more important than the rise of Internet technologies. The Internet, as it continues to develop, has changed the ways that people live and work. Examples include:
As every advanced economy becomes global, a nation’s most important competitive asset becomes the skills and cumulative learning of its workforce. The one element that is unique about a nation or a company is its workforce. Triandis (1998; 2002) emphasizes that culture provides implicit theories of social behaviour that act like a ‘computer program’, controlling the actions of individuals. He notes that cultures include unstated assumptions, the way the world is. These assumptions influence thinking, emotions, and actions without people noticing that they do. To understand what cultural differences, imply, consider the theory of vertical and horizontal individualism and collectivism.
Culture determines the uniqueness of a group the same way that personality determines the uniqueness of an individual.
Geert Hofstede identified five dimensions of cultural variation in values in more than 50 countries and 3 regions (east Africa, west Africa, and Arab countries).
These five dimensions reflect basic problems that any society has to cope with, but for which solutions differ.
Psychological measurement and research in applied psychology is increasing in importance worldwide. Topics like computerized adaptive testing, item-response theory, item analysis, generalizability theory, and the multitrait-multimethod matrix are currently being studied in several countries.
Psychological measures are often developed in one country and then transported to another. The problem is that each culture views life in a unique fashion depending on the norms, values, attitudes, and experiences particular to that specific culture. So, the comparability of any phenomenon can pose a major methodological problem in international research that uses, for example, surveys, questionnaires, or interviews.
Before measures developed in one culture can be used in another, it is important to establish translation, conceptual, and metric equivalence. This will enhance the ability of a study to provide a meaningful understanding of cross-cultural similarities and differences.
The work of the executive is becoming more international in orientation. An international executive is one who is in a job with some international scope, whether in an expatriate assignment or in a job dealing with international issues more generally. Early identification of individuals with potential for international management is important to a growing number of organizations. Spreitzer et al. (2997) speculated that four broad processes facilitate the development of future international executives:
These processes can provide a starting point for the creation of a theoretical framework that specifies how current executive competencies, coupled with the ability to learn form experience and the right kind of developmental experiences, may facilitate the development of successful international executives.
Validities of domestic selection instruments may not generalize to international sites, because different predictor and criterion constructs may be relevant, or, if the constructs are the same, the behavioural indicators may differ. Recent reviews indicate that the selection process for international managers is, with few exceptions, largely intuitive and unsystematic. A major problem is that the selection of people for overseas assignments is often based solely on their technical competence and job knowledge. But technical competence has nothing to do with one’s ability to adapt to a new environment, to deal effectively with foreign co-workers, or to perceive and, if necessary, imitate foreign behavioural norms. Various factors determine success in an international assignment, including:
To maximize the effectiveness of employees sent to other countries to conduct business, companies often provide opportunities for CCT prior to departure. Cross-cultural training (CCT) refers to formal programs designed to prepare people of one culture to interact effectively in another culture or to interact more effectively with people from different cultures. An effective way to train employees to adapt is to expose them to situations like they will encounter in their assignments that require adaptation. Such a strategy has two benefits:
CCT includes several components. The first is awareness or orientation, and a second is behavioural, providing opportunities for trainees to learn and practice behaviours that are appropriate to the culture in question.
Performance management is just as important in the international context as it is in domestic operations. The major difference is that implementation is much more difficult in the international arena. It refers to the evaluation and continuous improvement of individual or team performance and includes goals, appraisal, and feedback. Factors that may affect the performance of expatriates include:
A thorough review of research proposes the following working model of the dimensions of expatriate job performance:
This list reflects intangibles that are often difficult to measure using typical performance appraisal methods. It also suggests that performance criteria for expatriates fall into three broad categories:
The problems of repatriation, for those who succeed abroad as well as for those who do not, have been well documented. All repatriates experience some degree of anxiety in three areas: personal finances, reacclimation to the home-country lifestyle, and readjustment to the corporate structure. “Reverse culture shock” may be more challenging than the culture shock experienced when going overseas. Possible solutions to these problems fall into three areas:
Globalization is a fact of modern organizational life, it refers to commerce without borders, along with the interdependence of business operations in different locations. This chapters emphasizes five main areas:
Though the behavioural implications of globalization can be addressed from various perspectives, we choose to focus only on five of them.
Summary with the 6th edition of Applied psychology in human resource management by Cascio
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Summary with the 6th edition of Applied psychology in human resource management by CascioJob security = the belief that one will retain employment with the same organization until retirement à has become less important to workers than:
Employment security = having the kinds of skills that employers in the labor market are willing to pay for.
Organization = a collection of people working together in a division of labor to achieve a common purpose/ a system of inputs, throughputs and outputs.
Personnel Psychology = individual differences in behavior and job performance and methods for measuring and predicting such differences.
Differences in individual performance: difference in ability, difference in motivation or both.
Major areas of interest to personnel psychologists:
Psychologists have already made substantial contributions to the field of HRM: in fact, most of the empirical knowledge available in such areas as motivation, leadership, and staffing is due to their work. Over the past decade, dramatic changes in markets, technology, organizational design, and the respective roles of managers and workers have inspired renewed emphasis on and interest in personnel psychology.
Markets
The free (labor) markets that the United States has enjoyed throughout its history have now become a global passion.
Some jobs aren’t being lost temporarily because of a recession; rather, they are being wiped out permanently as a result of new technology, improved machinery, and new ways of organizing work à dramatic effects on organizations and their people.
Psychological contract = an unwritten agreement in which the employee and employer develop expectations about their mutual relationship. Job mobility (instead of stability and predictability) is now the norm, rather than the exception.
Technology
Digital revolution: distance means nothing if you have a digital infrastructure.
Darkside: junkmail (spam), hackers.
Organizational design
Organizations must adapt to management via the Web, they must be predicated on constant changes, not stability. Organizations are becoming smaller, with better trained ‘multispecialists’ (those who have in-depth knowledge about a number of different aspects of the business).
Role of the Manager
Traditional: stability, predictability and efficiency.
Now: to survive, organizations have to be able to respond quickly to shifting market
conditions. Task for managers is to articulate a vision, what they are trying to
accomplish and how they compete for business in the marketplace.
Workers are acting more like managers and managers are acting more like workers.
Workers
Diverse. Paternalism is out, self-reliance is in. Do more with less: empowerment, cross-training, personal flexibility, self-managed work teams, continuous learning.
Human Resources can be sources of sustained competitive advantage as long as they meet three basic requirements:
1. They add positive economic benefits to the process of producing goods or delivering services;
2. The skills of the workforce are distinguishable from those of competitors;
3. Such skills are not easily duplicated.
A diverse workforce is not something a company have to have, it’s something all companies do have or soon will have.
Problems could surface: insecurity, uncertainly, stress, social friction
Compensations: challenge, creativity, flexibility, control, interrelatedness
The future world of work will not be a place for the timid, the insecure, or the low skilled. The need for competent HR professionals with broad training in a variety of areas has never been greater.
Utility Theory
A framework for making decisions by forcing the decision maker to define clearly his or her goal, to enumerate the expected consequences (and costs) or possible outcomes of the decision, and to attach differing utilities or values to each.
The unique features of decision theory/utility theory is that it specifies evaluations by means of a pay off matrix or by conversion of the criterion to utility units. (see tables p.40/41).
Utilize theory = extremely useful tool for the I/O psychologist or HR professional.
Systemstheory = everything is one big system with infinite, interconnected, interdependent subsystems. System = a collection of interrelated parts, unified by design and created to attain one or more objectives.
- Closed-system approach = concentrated primarily on the internal operation of the organization and tended to ignore the outside environment.
- Open system = the modern view of organizations. In continual interaction with multiple, dynamic environments, providing for a continuous import of inputs and a transformation of these into outputs, which are then exported back into these various environments to be consumed by clients or customers.
Systems thinking is a discipline for seeing wholes. A system comprises subsystems of a lower order and is also part of a supersystem. (see figure 3-1, p.42)
People à groups à departments à divisions à companies à industry à economy.
Managers need to understand system theory:
- ability to scan and sense changes in the outside environment
- ability to bridge and manage critical boundaries and areas of interdependence
- ability to develop appropriate strategic responses.
Employment process (figure 3-2 p.44)
- different recruitment, selection and training strategies are used for different jobs
- the various phases in the process are highly interdependent, as the feedback loops indicate
Job Analysis & Job Evaluation à Workforce Planning à Recruitment à Initial (1e) Screening à Selection à Training & Development à Performance Management à Organizational Exit.
Job Analysis & Job Evaluation
Job Analysis is the fundamental building block on which all later decisions in the employment process must rest. Detailed specification by the organization of the work to be performed, the skills needed and the training required in order to perform the job satisfactorily.
Both job analysis and job evaluation are performed independently of the particular individuals who currently happen to be performing the jobs.
Workforce Planning
Anticipating future staffing requirements and formulating action plans to ensure that enough qualified individuals are available to meet specific staffing needs at some future time.
1. Organization devise an inventory of available knowledge, abilities, skills, and experiences of present employees
2. Forecasts of the internal and external human resource supply and demand
3. Various action plans and programs can be formulated in order to meet predicted staffing needs (training, promotions or recruitment)
4. Control and evaluation procedures.
Adequate and accurate WP is essential.
Recruitment
= Attracting potentially acceptable candidates to apply for the various jobs.
Two decisions:
1. Costs of recruiting
2. Selection ratio (the number hired relative to the number that apply)
Recruitment is critically important in the overall selection-placement process.
Initial Screening
Decision errors:
- erroneous acceptance (individual who is passed on from preceding stage, but who fails at the following stage)
- erroneous rejection (individual who is rejected at one stage, but who can succeed at the following stage if allowed to continue.
Different costs are attached to each of these errors, but the costs of an erroneous acceptance are immediately apparent, the costs of erroneous rejections are much less obvious.
Selection
Matching individual and job. During this phase, information is collected judgmentally (interviews), mechanically (written tests) or both. The resulting combination is the basis for hiring or rejecting.
There is not a systematic or one-to-one relationship between the cost of a selection procedure and its subsequent utility.
Training & Development
Most individuals have a need to feel competent (= a cluster of interrelated knowledge, abilities, skills, attitudes, or personal characteristics that are presumed to be important for successful performance on a job). Personnel selection and placement strategies relate closely to training and development strategies. In lower-level jobs, training objectives can be specified rather rigidly and defined carefully.
Performance Management
It is only after employees have been performing their jobs for a reasonable length of time that we can evaluate their performance and our predictions. In observing, evaluating, and documentating on-the-job behavior and providing timely feedback about it to individuals or teams, we are evaluating the degree of success of the individual or team in reaching organizational objectives. Success can be assessed by objective indices (dollar volume of sales, number of errors), in most cases, judgments about performance play a significant role.
Organizational Exit
Involuntary:
Psychological process à anticipatory job loss; shock, relief, and relaxation; concerted effort; vacillation; self-doubt, and anger; resignation and withdrawal.
Organizational process à communication, participation, control, planning, and support.
Individual à depression, hostility, anxiety, and loss of self-esteem.
Reactions of survivors to layoffs à stress in response to uncertainly about their ability.
Retirement is voluntary.
Organizational exit influences, and is influenced by, prior phases in the employment process.
Criteria = operational statements of goals or desired outcomes. Predictive or evaluative purpose! Evaluative standard that can be used to measure a person’s performance, attitude, motivation, etc.
“Criterion Problem” = the difficulties involved in the process of conceptualizing and measuring performance constructs that are multidimensional, dynamic, and appropriate for different purposes.
Ultimate criterion = the full domain of performance. Includes everything that defines success on the job. A concept that is strictly conceptual and, therefore, cannot be measured or observed. Long-term effectiveness
Operational measures of the conceptual criterion may vary along several dimensions:
Four challenges before human performance can be studies en better understood:
“In Situ performance” is the specification of the broad range of effects (situational, contextual, strategic, and environmental) that may affect individual, team, or organizational performance. 6 possible extraindividual influences on performance:
Steps in Criterion Development:
Utility à researcher find the highest and most useful validity coefficient.
Understanding à researchers advocates construct validity.
How can we evaluate the usefulness of a given criterion?
Criteria measuring problems:
Research Design and Criterion Theory
See figure 4-3, p. 70. Criterion related à
- a predictor (BF score) should be related to an operational criterion (sales made) measure;
- the operational criterion (sales made) measure should be related to the performance domain it represents (selling furniture).
Composite criteria models focus on outcomes, multiple criteria focus on behaviors, together they form a performance domain.
Performance management = a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with strategic goals of the organization. Not a one-time event.
Performance appraisal = the systematic description of job-relevant strengths and weaknesses within and between employees or groups.
There are technical and human issues involved. N addition, performance management needs to be placed within the broader context of the organization’s vision, mission and strategic priorities.
Purposes for performance management
Realities of Performance Management Systems
Barriers to implementing effective Performance Management Systems:
Fundamental requirements of successful Performance Management Systems:
This 9 key requirements indicate that performance appraisal should be embedded in the broader performance management system and that a lack of understanding of the context surrounding the appraisal is likely to result in a failed system.
Performance appraisal à
1). Observation: detection, perception, and recall or recognition of specific behavioral events.
2). Judgment: categorization, integration, and evaluation of information.
In practice, observation and judgment represent the
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