\u00a9 2007 SHRM. Marc C. Marchese, Ph.D. 15
\nEmployee Selection
\nstaffing
\nCase Study\u2014Structured Exercises
\nStudent Workbook
\n\u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\n16 \u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\nAbout This Structured Exercise
\nThis exercise introduces undergraduate students to the concept of employee selection,
\nits benefits to organizations and its complexities. At the end of this exercise, students
\nwill learn the steps required to design, implement and assess an employee selection
\nprocess for a job position. This exercise is intermediate in difficulty level.
\nLearning Objectives
\nDuring this exercise, students will learn to:
\n1. Choose selection methods relevant to a job.
\n2. Create various options to operationalize the selection methods.
\n3. Apply a scoring system to a set of applicants.
\n4. Devise a compensatory selection strategy and apply it.
\n5. Devise a noncompensatory selection strategy and apply it.
\n6. Conduct an adverse impact analysis.
\n7. Determine the decision-making accuracy for the selection system.
\n8. Reflect on the complexities of employee selection.
\nEmployee Selection\u2014Structured Exercise
\nEmployee Selection\u2014Structured Exercise
\n\u00a9 2007 SHRM. Marc C. Marchese, Ph.D. 17
\nEmployee Selection\u2014Structured Exercise
\nIntroduction to Employee Selection
\nMany people without a background in human resource management mistakenly equate hiring with employee
\nselection. Hiring is a broad concept that can take several approaches, such as offering a job to someone because
\nof who he\/she knows (e.g., my dad is the boss, so I got the job) or taking the first person who walks through
\nthe door to a get a \u201cbody\u201d on the sales floor as soon as possible. Employee selection is a formal process in which
\nthe organization (1) identifies the tasks, duties and responsibilities (TDRs) associated with the job; (2) assesses
\napplicants\u2019 readiness to successfully perform these TDRs; and (3) offers the job to the most qualified applicant
\nfor the position.
\nOrganizations that adopt an employee selection approach to hiring must make a series of decisions to develop
\nan effective process that identifies the most-qualified applicant.
\n1. Review and Revise the Job Description
\nThe first step to establish an employee selection process is to review and possibly revise the job description for
\nthe position. An accurate job description contains a job specification section, which includes the knowledge,
\nskills, abilities and other characteristics (e.g., college degree, driver\u2019s license, relevant work experience), or
\nKSAOs, needed for the job incumbent.
\n2. Choose the Appropriate Selection Methods
\nAfter identifying the significant KSAOs, the next step is to choose the selection methods. Selection methods
\nmay include an employment interview, a personality inventory, submission of a r\u00e9sum\u00e9, etc. These selection
\nmethods are used to assess the identified KSAOs.
\n3. Create an Implementation Schedule
\nOnce the selection criterion and methods are decided, an implementation schedule must be created. An
\nimplementation schedule determines the order in which selection methods are administered. After the schedule
\nis determined, selection methods are applied to the applicant pool. As a result, some applicants will no longer
\nbe considered for the opening. In addition, a scoring system may be used to identify the strongest candidates.
\nAt the end of the selection process, the \u201cbest\u201d applicant is selected and offered the job.
\n4. Assess the Effectiveness of the Selection System
\nOnce the top applicant accepts the job, the selection process itself is complete. It is recommended, however,
\nthat the process be evaluated from time to time to ensure its effectiveness. When evaluating the selection
\nsystem, two approaches can be used: an adverse impact analysis and\/or a study to assess decision-making
\naccuracy.
\nEven if a selection process treats applicants equally, a discrimination lawsuit may still result if the equal
\ntreatment had an unequal effect on a particular protected class. An adverse impact analysis can be conducted
\nto determine if the selection system has an unequal effect based on a protected class of applicants.
\nThe selection system can also be evaluated to assess its predictive accuracy for job success or decision-making
\naccuracy. Even if the selection system is working properly in terms of nondiscrimination, it does not make
\nsense for an organization to use a hiring approach that is not effective at predicting successful employees. In
\nthis exercise, you will have an opportunity to conduct both of these Assessment approaches.
\nIntroduction to Employee Selection
\n18 \u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\nTHE EXERCISE: DEVELOP, IMPLEMENT AND ASSESS AN EMPLOYEE SELECTION SYSTEM FOR A
\nBANK TELLER POSITION
\nPart 1: Employee Selection and Assessment
\nFor this exercise, assume you are employed as an HR consultant for a mid-sized bank. The bank employs
\n200 tellers across its branches. The following is a partial job description and specification for the bank teller
\nposition, based on information obtained from O*Net. O*Net, or the Occupational Information Network
\nResource Center, is an online database containing information on hundreds of standardized and occupationspecific descriptors.
\nBank Teller Tasks\/Duties\/Responsibilities
\n\u2022 Cash checks for customers after verification of signatures and sufficient funds in the account.
\n\u2022 Receive checks and cash for deposit.
\n\u2022 Examine checks for endorsements and verify other information such as dates, bank names and
\nidentification.
\n\u2022 Enter customers\u2019 transactions into computers to record transactions.
\n\u2022 Count currency, coins and checks received to prepare them for deposit.
\n\u2022 Identify transaction mistakes when debits and credits do not balance.
\n\u2022 Balance currency, coins and checks in cash drawers at ends of shifts.
\nKSAOs
\n\u2022 Customer service skills.
\n\u2022 Basic math skills.
\n\u2022 Knowledge of verification requirements for checks.
\n\u2022 Ability to verify signatures and proper identification of customers.
\n\u2022 Ability to use accounting software.
\n\u2022 High school diploma required, associate\u2019s or bachelor\u2019s degree preferred.
\n\u2022 Previous work experience as a teller or related occupation (cashier, billing clerk) desired.
\nKey statistics (from O*Net):
\n\u2022 The median 2005 wage for tellers was $10.24 (hourly), $21,300 (annually).
\n\u2022 In 2004, there were approximately 558,000 tellers in the United States.
\n\u2022 Projected growth for this job is slower than average.
\nBased on this information, the bank decides that the ideal candidate for this position will possess the
\nfollowing factors:
\n1. Have at least a high school education (bachelor\u2019s or associate\u2019s degree desirable).
\n2. Have experience as a teller or in a related field (cashier, billing clerk).
\n3. Be able to perform basic math skills related to banking (for example, count currency quickly and
\naccurately and balance a cash drawer correctly).
\n4. Be knowledgeable of verification requirements for bank transactions (for example, errors in checks and
\nproper identification to authorize transactions).
\n5. Have good interpersonal skills (for example, speak clearly, make good eye contact and develop rapport
\neasily).
\n6. Be motivated to work.
\nPart 1: Employee Selection and Assessment
\n\u00a9 2007 SHRM. Marc C. Marchese, Ph.D. 19
\nEmployee Selection Exercise
\n[A] Choose the selection methods: Identify which selection method (e.g., r\u00e9sum\u00e9, interview, test, role-play
\nexercise, reference check or personality inventory) you would recommend for each of the six factors listed
\nabove. You can use the same selection method more than once if you believe it is appropriate for more than
\none factor. Below is an example of how you might justify using an application form as an appropriate selection
\nmethod for education.
\n1. Education \u2013 selection method: Application form
\nJustification: A question on the application form can ask applicants to describe their education. This selection
\nmethod makes it easy and inexpensive to obtain this information.
\n2. Work experience \u2013 selection method: _________________________________________
\nJustification:
\n3. Math skills \u2013 selection method: ______________________________________________
\nJustification:
\n4. Verification knowledge \u2013 selection method: ___________________________________
\nJustification:
\n5. Interpersonal skills \u2013 selection method: _______________________________________
\nJustification:
\n6. Work motivation \u2013 selection method: _________________________________________
\nJustification:
\nPart 1: Employee Selection and Assessment
\n20 \u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\n[B] Operationalize your assessments: Now that you have identified selection methods for the six factors,
\nyou must decide how to score each of these assessments. Based on your responses in part A (\u201cChoose the
\nselection methods\u201d), think about how each factor may be scored and develop a point system for that factor.
\nA common approach to performing this task is to have some type of numerical rating system that may include
\none or two minimum requirements. Your task is to develop a rubric (point system) to \u201cscore\u201d applicants for
\neach of the six factors. In developing your rubric, review the job description information. The \u201ceducation\u201d
\nfactor is provided for you below. Remember that tellers need to have a high school diploma, according to the
\njob specification. Applicants who do not meet this requirement are rejected. College degrees are preferred and
\nreceive more points in the example below.
\n1. Education assessed via application form.
\nMy assessment:
\nPoints Highest Level of Education
\n10 Bachelor\u2019s level or higher
\n6 Associate\u2019s degree
\n3 High school diploma
\nReject Less than high school diploma
\n2. Work experience assessed via _________________________________________________
\nMy assessment:
\n3. Math skills assessed via _____________________________________________________
\nMy assessment:
\n4. Verification knowledge assessed via ___________________________________________
\nMy assessment:
\n5. Interpersonal skills assessed via_______________________________________________
\nMy assessment:
\n6. Work motivation assessed via ________________________________________________
\nMy assessment:
\nPart 1: Employee Selection and Assessment
\n\u00a9 2007 SHRM. Marc C. Marchese, Ph.D. 21
\n[C] Apply your assessment systems: Listed below are applicants for the teller position. Based on your
\nanswers in part B (\u201cOperationalize your assessments\u201d), score each of the applicants.
\nSample applicant information
\nMaria Lori Steve Jenna
\nEducation Associate\u2019s degree H.S. diploma G.E.D. Bachelor\u2019s degree
\nWork experience 4 years as a cashier 1 year as a teller 5 years as a sales
\nclerk at a national
\nretail clothing store
\nchain
\nCompleted a
\nsemester internship
\nat a bank
\nMath skills Very strong Marginal Satisfactory Good
\nVerification
\nknowledge
\nMarginal Strong Satisfactory Strong
\nInterpersonal skills Very strong Good Good Good
\nWork motivation Good Good Marginal Strong
\nScore the applicants
\nMaria Lori Steve Jenna
\nEducation 6 3 3 10
\nWork experience
\nMath skills
\nVerification
\nknowledge
\nInterpersonal skills
\nWork motivation
\n(a) Which applicants scored best based on the scores you entered into the table?
\n(b) What difficulties did you have applying your scoring system?
\n(c) Based on this applicant data, would you make any changes to your rubrics? If yes, please describe.
\nPart 1: Employee Selection and Assessment
\n22 \u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\nPart 2: Selection Strategy
\nNow that you have created a system to assess applicants on the six key factors, you must decide how to
\nprocess this information. Employee selection systems have multiple assessments, and organizations must
\ndecide how to integrate them.
\nOne assessment strategy is compensatory and allows an applicant\u2019s strengths to compensate for weaknesses
\nin another area. For example, a recent college graduate may score highly in the educational requirements
\nfor a job opening but score low in terms of work experience. A compensatory strategy will help the recent
\ngraduate\u2019s limited work experience be \u201ccompensated\u201d by his or her high level of education.
\nA compensatory selection strategy may be unweighted or weighted. In an unweighted strategy, all of the
\nfactors have the same highest score possible and scores are simply added together. The applicant with the
\nhighest score is considered the best and offered the job. To apply this strategy to this exercise, convert all
\nsix factors to a possible high score of 100. For example, multiply each education score by 10 (highest score
\npossible for education = 10, so 10 x 10 = 100). Then, add the scores for each applicant.
\nMaria Lori Steve Jenna
\nEducation 60 30 30 100
\nWork experience
\nMath skills
\nVerification knowledge
\nInterpersonal skills
\nWork motivation
\nTOTAL<\/p>\n
1. Who scored the highest? ______________________________________________________
\n2. Do you think this person is the best applicant? Why or why not?
\n3. Who scored the lowest? _______________________________________________________
\nPart 2: Selection Strategy
\n\u00a9 2007 SHRM. Marc C. Marchese, Ph.D. 23
\nYou have just completed an unweighted compensatory approach to employee selection. The other option is a
\nweighted compensatory approach. In this approach, one or two factors are identified as more important than
\nthe other factors and, hence, deserve more weight in deciding the best applicant. Additionally, one or two
\nfactors may be considered least important and would have less weight.
\nTo try this out, answer the following questions:
\n1. Which of the six factors do you consider the most important in terms of selecting bank tellers? Defend
\nyour choice.
\n2. Based on your answer to the first question, double the points for the four applicants for this factor. Record
\nthe answers in the table below.
\n3. Of the remaining five factors, which two do you see as least important for selecting bank tellers? Defend
\nthese choices.
\n4. Based on your answer to question 3, divide the points in half for the four applicants for these two factors.
\nRecord the answers in the table below.
\n5. For the three factors not mentioned in questions 1 and 3, copy the scores from the previous table into the
\ntable below. Total the scores for the four applicants.
\nMaria Lori Steve Jenna
\nEducation
\nWork experience
\nMath skills
\nVerification knowledge
\nInterpersonal skills
\nWork motivation
\nTOTAL
\n1. Who scored the highest? __________________________________________________
\n2. Do you think this person is the best applicant? Why or why not?
\n3. Who scored the lowest? ___________________________________________________
\n4. When you compare your answers using the unweighted to the weighted approach, which approach do you
\nthink was better? Why?
\nPart 2: Selection Strategy
\n24 \u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\nThe other selection strategy is called noncompensatory. Instead of adding the scores on all of the
\nassessments, a noncompensatory strategy establishes cutoffs for each assessment. An applicant who fails to
\nmeet or exceed a cutoff is rejected from the selection process. The cutoff can be a passing score on a test\/
\ninventory, a rating level (e.g., good) or a characteristic relevant to the job (e.g., valid driver\u2019s license). The
\njob description is used as a guide to determine what the cutoff(s) should be.
\nFor example, in terms of education for the teller position, the job specification indicates that a high school
\ndiploma is required, and so the cutoff is established at this level. The challenge occurs for factors that do not
\nhave clear guidance as to the cutoffs. If a requirement is not specified in the job description, then subject
\nmatter experts (people knowledgeable about the job\u2014usually either long-term incumbents or supervisors)
\ndetermine cutoffs based on their own experience with the job. They will also consider the expected
\nqualifications of applicants when determining these cutoffs.
\nBased on your knowledge and experience with bank tellers, create a cutoff for each of the six factors in the
\ntable below.
\nCutoff for each assessment
\nEducation The applicant must have at least a high school diploma or GED.
\nWork experience
\nMath skills
\nVerification knowledge
\nInterpersonal skills
\nWork motivation
\nSimilar to the compensatory strategy, there are two options for a noncompensatory approach. One
\nnoncompensatory option is called a multiple cutoff approach. In this approach, cutoffs are applied for
\nevery factor for all applicants. Apply your cutoffs listed in the table above to the four applicants.
\n1. Which applicant(s) remains? _______________________________________________________
\n2. If no applicant met all of the cutoffs, would you rather lower the cutoffs or restart the recruiting process?
\nWhy?
\n3. If many applicants exceed the cutoffs, would you rather increase the cutoff levels, hire all remaining
\napplicants (if possible) or take a compensatory approach for those that exceeded all of the cutoffs? Why?
\nPart 2: Selection Strategy
\n\u00a9 2007 SHRM. Marc C. Marchese, Ph.D. 25
\nAnother noncompensatory method is called a multiple hurdle approach. In this approach, cutoffs are
\narranged sequentially. The first cutoff is applied to the entire applicant pool. Those applicants who fail to meet
\nor exceed the cutoff are rejected. The remaining applicants are then subjected to the next cutoff, where more
\napplicants will be rejected. This process reduces the applicant pool at each hurdle. At the final hurdle, only a
\nselect few will remain.
\nOrganizations usually set cutoffs that are less costly and more objective as the initial hurdles. More subjective
\nand often more time-consuming assessments are set at the end of the selection process. The multiple hurdle
\napproach saves organizations money because not all of the applicants are assessed on all of the factors. This
\napproach, however, can be time-consuming because each cutoff must be applied and then evaluated before
\nmoving to the next cutoff.
\nReflect on your cutoffs and arrange them in the table below to establish your own multiple hurdle system.
\nMultiple hurdle system
\nRejected applicant
\nHurdle 1: Education None, all applicants have at least high school diploma or GED.
\nHurdle 2:
\nHurdle 3:
\nHurdle 4:
\nHurdle 5:
\nHurdle 6:
\n1. At the end of hurdle 6, which applicant(s) remained?
\n2. What would you recommend if you had no remaining applicants or several applicants remaining?
\n3. Do you prefer this method over the multiple cutoff method? Why or why not?
\nPart 2: Selection Strategy
\n26 \u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\nPart 3: Evaluating the Selection System
\nYou have now created a selection system for the job of a teller.
\nThe final step in a selection system is to make sure the system works properly.
\nAs discussed in the overview, there are two ways to ensure that the system is working. One approach takes a legal
\nperspective to ensure that organizations do not discriminate in hiring.
\nThere are two types of discrimination: disparate treatment and disparate impact (also known as adverse impact).
\nDisparate treatment discrimination refers to treating applicants differently based on a protected characteristic
\n(for example, age, sex, national origin, religion). An example of disparate treatment discrimination is not
\nconsidering women for leadership positions. This type of discrimination is considered intentional and therefore
\neasy to identify and correct or prevent.
\nDisparate impact discrimination is considered unintentional. This form of discrimination indicates that all
\napplicants were treated equally; however, this equal treatment had an unequal effect related to a protected
\ncharacteristic. The most common approach to identify adverse impact is to apply the four-fifths rule. The fourfifths rule states that adverse impact exists if the selection ratio of the minority group is less than four-fifths (or 80
\npercent) of the selection ratio of the majority group. A selection ratio is the percentage of those hired based on
\nthe percentage of those who applied for the job. Selection ratios must be calculated for each protected group. The
\nselection ratio of the minority group is compared with the selection ratio of the majority group (often \u201cmales\u201d or
\n\u201cCaucasians\u201d). The simplest way to calculate adverse impact is to divide the selection ratio of the minority group
\nby the selection ratio of the majority group. If the result is less than 80%, then adverse impact exists.
\nFor example, the bank collected the following data over the past five years:
\nMales applied = 200 Females applied = 300
\nMales hired = 40 Females hired = 45
\nBased on this information, the selection ratio for men is 20% (40\/200), whereas the selection ratio for women is
\n15% (45\/300). Dividing the minority group (the group with the lower selection ratio, women) by the majority
\ngroup (in this case, men) results in an answer of 75% (15%\/20%). Since the result is less than 80%, adverse impact
\nexists. The organization needs to explore the selection process to identify what may be the cause of this disparity.
\nIn this part of the exercise, you will conduct this analysis.
\nThe bank compiled selection data on three racial groups during the past year: Caucasians, African-Americans and
\nLatinos. The data is as follows:
\nNumber applied Number hired
\nCaucasians 90 27
\nAfrican-Americans 50 10
\nLatinos 40 10
\n1. The selection ratios for the three groups are:
\nCaucasians = _________________________
\nAfrican-Americans = ___________________
\nLatinos = ____________________________
\nPart 3: Evaluating the Selection System
\n\u00a9 2007 SHRM. Marc C. Marchese, Ph.D. 27
\n2. Does adverse impact exist when you compare the African-American applicant pool with the Caucasian
\napplicant pool? Show your work.
\n3. Does adverse impact exist when you compare the Latino applicant pool with the Caucasian applicant pool?
\nShow your work.
\nAnother way to assess the effectiveness of the selection system is to examine the decision-making accuracy.
\nEmployee selection is basically a system to predict which applicants will succeed on the job. Highly qualified
\napplicants are expected to perform well on the job. Similarly, seemingly less qualified applicants are not
\nexpected to perform well on the job. Unfortunately, the hiring process is complex. Some applicants can put
\non a \u201cgood show\u201d and still be mediocre employees, whereas other applicants may interview poorly but still
\nbe excellent employees. Organizations cannot assume the selection process is working well without collecting
\nand analyzing data.
\nOne option to calculate the decision-making accuracy of a selection system is to classify applicants into one
\nof two categories: strong applicants (ones who appear to be highly qualified and are predicted to do the job
\nwell\u2014a good hire) and weak applicants (ones who do not appear to be highly qualified and are predicted to
\nnot do the job well\u2014a poor hire). Once hired and after sufficient time (typically six months to a year) has
\npassed, employees can also be classified into two categories: good hire or poor hire. After all of this data is
\ncollected, the overall decision-making accuracy of the selection process (the total hit ratio) can be calculated
\nas the percentage of correct predictions.
\nThe table below shows data about the 200 tellers employed at the bank.
\nPoor hire Good hire Totals
\nStrong applicant 20 80 100
\nWeak applicant 70 30 100
\n1. Calculate the total hit ratio by adding the correct predictions and then dividing that number by the total
\nnumber of decisions made. What is this percentage? Do you think this percentage is impressive?
\n2. What percentage of weak applicants turned out to be good hires?
\n3. What percentage of strong applicants turned out to be good hires? This percentage is known as the
\npositive hit ratio.
\n4. Compare your answers to questions 2 and 3. Do you think the bank\u2019s system is effective?
\nPart 3: Evaluating the Selection System
\n28 \u00a9 2007 SHRM. Marc C. Marchese, Ph.D.
\nPart 4: Reflection on Employee Selection
\n1. You have made a number of decisions in creating, implementing and evaluating a selection system for bank
\ntellers. Which of these decisions do you think is most critical? Why?
\n2. An employee selection approach to hiring is more complex than hiring employees based on who they
\nknow or casually scanning a r\u00e9sum\u00e9 and asking a few \u201coff the cuff\u201d questions for an interview. When you
\nthink about your work experiences, do you think the organizations you worked for took an employee
\nselection approach when hiring?
\n3. If you answered yes to question 2, do you think the organization was effective in hiring employees? If you
\nanswered no to question 2, do you think the organization should have adopted a selection approach to
\nhiring? Explain your response.
\n4. What do you perceive as the overall advantages and disadvantages of an employee selection approach to
\nhiring?
\n5. After reflecting on this exercise, would you recommend an employee selection process to hiring for
\nvirtually any job? Why or why not?
\nPart 4: Reflection on Employee Selection<\/p>\n
1800 Duke Street
\nAlexandria, VA 22314<\/p>\n","protected":false},"excerpt":{"rendered":"
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