Staffing & Selection

© Nancy Brown Johnson

Staffing and Selection

Making decisions about how to get work done in your organization

HR Planning

Forecasting Demand Product Demand

labor derived demand past demand (if stable) other leading indicators

Forecasting Supply Turnover Promotions

Reconciliation of Supply & Demand

Shortages Plan for training Counter-cyclical hiring Wage increases Innovative recruiting Overtime Subcontract Temporary help Other trends in staffing arrangements

Temporary Workers

Fewer benefits Try out employees Already trained Tension with permanent employees

second class citizens permanent employees threatened lack commitment

Outsourcing

Contract entire operations Less expensive labor Economies of scale Gain expertise

Oversupply

Downsizing increased or decreased productivity loss of good employees commitment among survivors

Recruiting

The process of attracting people to apply to your organization for work

Selection

The process of choosing employees for your organization.

Traditionally

Tried to optimize job based skills and abilities.

Today more consideration of the match between the person and the organization

Attraction-Selection-Attrition (ASA) Theory People are attracted to

organizations where they feel comfortable.

Organizations try to select people who fit within the organization.

People who do not fit, will leave.

ASA Results

Organizations become more homogeneous over time

Recognizes the need to consciously select people that fit within organization

Organizations may also need to consciously change recruiting to attract people who are different.

Realistic Job Previews

Recruiter's information is accurate. Realistic Job Preview Vaccination - prevents formation of

unrealistic expectations. Choice based on accurate and balanced

information - judging job based upon needs.

More freedom & choice More committed when free to choose.

Realistic Job Previews

Works best when: candidate can be selective in accepting a job offer has unrealistic job expectations would have difficulty coping with job demands

without RJP

Two Ways to Staff Job Recruiting

Externally - recruiting people from outside the organization.

a. brings in fresh blood

b. costly

c. new people may hinder group morale

Second Way to Staff

Internally - moves between jobs in an organization. Important for organization

Affects career decisions Can be a reward

less expensive know more about the people rewards past performance can enhance

morale

Signaling Theory

When you go into the marketplace to buy a good or service you may get a lemon

This is because there is information asymmetry- you know more about the quality of what you are selling than the buyer (e.g., you know more about your job skills than a potential employer)

Consequently, there is the potential for adverse selection: hiring the wrong person because you did not have enough information

This is expensive-you could get stuck with a lemon

What sort of workforce does the firm want?

Fits with firm culture, technology, strategy, & environment

Diversity: diverse workforce increases innovation, less diversity better for efficiency

Signaling Theory

Policies and practices of the firm can signal in the labor market what type of worker the firm wants Screening practices Compensation practices can help screen workers

Similarly, firms use signals that applicants send to make decisions (where they go to school)

Applicant self-selection: Output v. Input Pay Ideally what you want is for applicants to self-select

Firms use their general reputation through pay, training, and selection practices

What types of signals would a firm send who pays above market v. below market?

McDonalds will hire almost anyone; Toyota is hard to get hired

Thus, it is important that firms send signals of the type of employees they want

One example of signaling

Output based pay: pay based upon what you produce

Input based pay: amount of time or effort spent on an activity

Output Pay

Screening workers induces inefficient

workers to leave will leave when pay falls

short of next best alternative

more productive workers will go to A

Pay

Sales5

500

A

B

Signals

Incentive compensation signals to potential employees must be productive or they will not be successful

May discourage less potentially productive employees not to even want to work for that firm

External environment influences

Labor market - loose/tight markets affect abundance of candidates

Legal - legal concerns salient in recruiting.

Types of Labor Markets

Local Regional National International

Recruiting Sources

College Students Walk-ins Employee Referrals Advertising Job Fairs Private Employment Agencies Public Employment Agencies

Effectiveness of Methods

Two ways to judge effectiveness Does technique generate good candidates? Does technique generate good employees?

Effectiveness of Recruiting Newspapers and other advertising generates

most candidates Referrals and rehires of previous employees

have best attendance & performance Informal techniques appear best: employee

referrals, rehires & walk-ins.

Selection

Selection is the process of determining which individuals will staff the organization.

Trying to find people who will best staff the organization.

Includes: interviewing, tests, weighing education & experience, recommendations

Good Selection Pays Off

25% of firms spend at least $1,000 for salesperson

50% - $1000-$5,000. Most employees don't pay back salary for a

year. Wrong person can cost 3½X their salary.

Selection Instruments

How to decide whether they are useful.

Reliability

Am I measuring the attribute consistently?

Reliability

test-re-test: give people same test at two time periods

parallel or equivalent forms: give different tests that measure the same thing

internal consistency: a single test is subdivided to see if people respond in the same way.

Inter-rater reliability: do different raters rate consistently

Validity

Validity - are you measuring what you want to measure?

In Selection: Does our selection instrument predict job performance?

Use statistical techniques to correlate the score on the test/interview with job performance

Key Definitions

Predictors - personnel selection devices. Interviews Ability Tests Recommendations

Criterion - variable used to measure job performance. Turnover Absenteeism Productivity Performance Appraisal

Utility

Is the payoff from implementing new predictor worth it?

Weighs the potential benefits against the potential costs.

Utility of selection devises depends whether it improves the quality of individuals selected over what they would have been had the devise not been used.

Utility= quantity X quality - cost Quantity = Number People Selected/Year Quality = validity coefficient (how useful is the test?)

What proportion of those selected considered successful?

What is good job performance worth? What is the variation in good & bad job

performance How selective can you be?

Cost = N(C) What does the selection test cost?

Changes in Cut Score

False positive-test says to hire but it was a mistake

False negatives-test says not to hire but would have been good employee

Raising Cut Score

Decreases false positives

Increases false negatives

Test Score

Job Performance

Good

Good

False Negative

False Positive

Interviews

Most frequently used and most controversial method of selection.

Other functions: public relations, organization communicates what it has to offer the applicant, and can fill in gaps in application blank.

However, recent evidence suggests that individual interviewers may be highly accurate in predicting job success

Interviews Unreliable and Invalid

Difficult cognitive task: manage conversation listen process information remember

Improving Interview Validity

Restrict the use of interviews to the KSAs that interviews can assess most effectively: personal relations, sociability & citizenship

Use structure - consistent information from applicants

Job related questions - direct and specific information about the job.

Behavioral interviews ask about how applicants have performed jobs or handled problems in the past

Situational interviews: provide a scenario typical of the job and then ask how to handle it

More Improving Interview Validity Formalize scoring - rating scales on a series

of characteristics. Team approach - several interviewers as a

group interview the applicant. Train the interviewer

1. accurately receive information 2. critically evaluate information 3. regulate their own behavior in asking questions.

Applications

Used to get person's background & experience minimum requirements comparing their strengths and weaknesses

EEOC guidelines recommend against certain questions with adverse impact. The questions need to be job related.

Lying

Applications were compared with factual data. 25% listed previous employers that said they were

never employed 25% disagreement on reasons for leaving 57% duration of previous employment 72% on salary

References

Validity

Misuse and Bias

Weighted application blanks - scoring of application blank. Weight questions related to job success Must insure no weights for age, sex and marital

status.

Ability Tests

Intelligence tests - yield a single intelligence score.

Mental ability tests - multiple scores: verbal work fluency, math, spatial relations.

Relatively high validity

Personality Tests

Personality - unique characteristics that define an individual. determines individual's pattern of interaction

Personality not related to job performance except for some situations and for some purposes tests don't identify dimensions important for job

performance

Combining Methods

Multiple hurdle - Each test represents hurdle and if fails any level then don't get job. Advantage - inexpensive

Compensatory - all tests given to everyone. Exceptional performance may offset poor

performance on another. Advantage - higher validity.

Probationary Period

Probably the best way is to try people out Internal labor markets use to some degree by

not promoting those who are not deemed worthy Costs: you have to spend resources selecting

and training Workers may work hard just in probationary

period Maybe harder to get rid of employee following the

probationary period

Credentials as a signal

MBA from a top notch school maybe just getting in to that school

Signals desirable talents However, applicants will figure this out and

start getting MBAs Thus, there is noise and might require

additional screening

Summary

Recruiting & Selection extends beyond just finding the right skills for the job

Includes signals that you want to send that may attract and retain certain types of people

Must screen to work out noisy signals Improves validity