2. Staffing & Selection © Nancy Brown Johnson

3. Staffing and Selection Making decisions about how to get work done in your organization

4. HR Planning Forecasting Demand  Product Demand labor derived demand past demand (if stable) other leading indicators Forecasting Supply  Turnover  Promotions

6. Reconciliation of Supply & Demand Shortages  Plan for training  Counter-cyclical hiring  Wage increases  Innovative recruiting  Overtime  Subcontract  Temporary help  Other trends in staffing arrangements

7. Temporary Workers Fewer benefits Try out employees Already trained Tension with permanent employees  second class citizens  permanent employees threatened  lack commitment

8. Outsourcing Contract entire operations Less expensive labor Economies of scale Gain expertise

9. Oversupply Downsizing  increased or decreased productivity  loss of good employees  commitment among survivors

10. Recruiting The process of attracting people to apply to your organization for work

11. Selection The process of choosing employees for your organization.

12. Traditionally Tried to optimize job based skills and abilities. Today more consideration of the match between the person and the organization

13. 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.

14. 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.

16. 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.

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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)

23. 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

24. 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

25. 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 Sales 5 500 A B

26. 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

27. External environment influences Labor market - loose/tight markets affect abundance of candidates Legal - legal concerns salient in recruiting.

28. Types of Labor Markets Local Regional National International

29. Recruiting Sources College Students Walk-ins Employee Referrals Advertising Job Fairs Private Employment Agencies Public Employment Agencies

30. Effectiveness of Methods Two ways to judge effectiveness  Does technique generate good candidates?  Does technique generate good employees?

31. 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.

32. 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

33. 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.

34. Selection Instruments How to decide whether they are useful.

35. Reliability Am I measuring the attribute consistently?

36. 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

37. 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

38. Key Definitions Predictors - personnel selection devices.  Interviews  Ability Tests  Recommendations Criterion - variable used to measure job performance. TTurnover AAbsenteeism PProductivity PPerformance Appraisal

39. 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.

40. 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?

41. 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

42. Raising Cut Score Decreases false positives Increases false negatives Test Score Job Performance Good False Negative False Positive

43. 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

44. Interviews Unreliable and Invalid Difficult cognitive task:  manage conversation  listen  process information  remember

45. 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

46. 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.

47. Applications Used to get person's background & experience mminimum requirements ccomparing their strengths and weaknesses EEOC guidelines recommend against certain questions with adverse impact. TThe questions need to be job related.

48. 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

49. References Validity

50. 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.

51. Ability Tests Intelligence tests - yield a single intelligence score. Mental ability tests - multiple scores: verbal work fluency, math, spatial relations. Relatively high validity

52. 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

53. 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.

54. 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

55. 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

56. 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