1 Copyright © 2015 Pearson Education, Inc.

2 Chapter 11 – Choosing and Hiring CandidatesCopyright © 2015 Pearson Education, Inc.  

3 Copyright © 2015 Pearson Education, Inc. Learning Objectives After studying this chapter, you should be able to: Describe different ways of combining candidates’ scores on different assessment methods to calculate an overall score. Describe three different ways of making a final choice of whom to hire. Discuss the factors that influence the content of a company’s job offer. Describe the four different job offer strategies. Describe different types of fairness and explain why candidates’ perceptions of fairness are important to staffing. Copyright © 2015 Pearson Education, Inc.  

4 Combining Assessment ScoresWhen using more than one assessment method, as is usually the case because the validity of the candidate’s assessment is more valid when using multiple predictors, a candidate’s scores must be meaningfully combined to calculate an overall score that can be compared across candidates or to a minimum hiring standard. There are two ways of combining assessment scores: multiple hurdles and compensatory approaches. Copyright © 2015 Pearson Education, Inc.  

5 Copyright © 2015 Pearson Education, Inc. Multiple Hurdles Multiple hurdles: candidates must receive a passing score on an assessment before being allowed to continue in the selection process Costly and take more time due to the need for candidates to make repeated visits for the different assessments Used when the cost of poor performance on that characteristic is high For example, when safety is at risk Copyright © 2015 Pearson Education, Inc.  

6 Compensatory ApproachesCompensatory approach: high scores on some assessments can compensate for low scores on other assessments. This approach is less useful for jobs in which specific talents must exist at a minimum level. Copyright © 2015 Pearson Education, Inc.  

7 Executing the Compensatory ApproachUnit weighting: giving multiple assessments equal weight in computing an overall score Rational weighting: experts assign a different subjective weight to each assessment score Statistical weighting: using a statistical technique, such as multiple regression, to assign a different weight to each assessment score Multiple regression: the most scientific approach to determining how to weight each assessment in computing a candidate’s overall score Copyright © 2015 Pearson Education, Inc.  

8 Unit-Weighted ApproachCopyright © 2015 Pearson Education, Inc.  

9 Statistical Weighting ApproachThe output of a multiple regression includes a formula like: Overall score = c + (b1 * a1) + (b2 * a2) + (b3 * a3)… In this formula, c is a constant, the b’s are the statistical weights applied to each assessment method to maximize the validity of the group of assessment methods, and the a’s are a candidate’s scores on each of the assessment methods. Any number of assessment methods can be used. For example, if the regression equation looked like this: Overall score = 24 + (.20 * Cognitive Ability) + (.25 * Interview) + (.15 * Personality) And the candidate’s cognitive ability score was 70, interview score was 75, and personality score was 50, then the candidate’s overall score would be 64.25: 64.25 = 24 + (.2*70) + (.25*75) + (.15*50) Copyright © 2015 Pearson Education, Inc.  

10 Statistical Weighting ApproachTo be most accurate, the statistical approach requires a sample of several hundred or more hires, a low inter-correlation among assessment methods, and a relatively small number of assessment methods. Because the weights can differ when derived from different groups of people, it is best to check the stability of the multiple regression equation in different groups to assess its actual effectiveness. If estimating the regression equation on a large sample size is not possible, unit weighting or even rational weighting may be a better choice. Validity can sometimes be enhanced by combining the multiple regression approach with global expert judgment. Copyright © 2015 Pearson Education, Inc.  

11 Combining Multiple Hurdles and Compensatory ApproachesOften, some job requirements are essential to job performance but others can compensate for each other. A data entry hire may need to type a certain number of words per minute with a minimum number of errors, which would be a minimum hurdle, but cognitive ability and personality may be compensatory factors. A typing test can be used at the beginning of the assessment process as a hurdle to weed out candidates who do not meet the minimum typing requirements, then a compensatory approach balancing cognitive ability and personality used at the end. Scores on cognitive ability and personality would be weighted and combined in a compensatory manner and the highest scoring candidates offered jobs. Copyright © 2015 Pearson Education, Inc.  

12 Copyright © 2015 Pearson Education, Inc. Final Choice Cut score: a minimum assessment score that must be met or exceeded to advance to the next assessment phase or to be eligible to receive a job offer. Rank ordering: ranking candidates from highest to lowest scoring. Banding: Everyone who scores within a certain range of scores is considered to have performed equivalently and assigned the same grade. Hiring within the band is done randomly or based on other factors (EEO or affirmative action goals, etc.). Banding allows for the consideration of other factors in making a final choice, including whether an internal candidate is at risk of leaving the company if passed up for a promotion. Band widths are generally calculated on the basis of the standard error of measurement. Copyright © 2015 Pearson Education, Inc.  

13 Copyright © 2015 Pearson Education, Inc. Banding Copyright © 2015 Pearson Education, Inc.  

14 Copyright © 2015 Pearson Education, Inc. Final Choice When using cut scores or rank ordering, an additional decision needs to be made about whether to hire from the top of the list down, or to create a pool of finalists from which to make a final choice. This pool of finalists can then be rank ordered based on global or specific assessments, selected from randomly, or banded. There is no one best method of choosing the candidates to whom to extend job offers. Whenever possible, the ability of the assessment scores to predict job success should be carefully evaluated, and cutoff scores should be set high enough to ensure that new hires are likely to meet or exceed minimum standards of success. Copyright © 2015 Pearson Education, Inc.  

15 Copyright © 2015 Pearson Education, Inc. Legal Issues The Fair Labor Standards Act: covers working hours and the payment of overtime or compensatory time off to nonexempt employees. If an applicant is not hired because the applicant has previously exercised his or her rights under the FLSA, a court may conclude that the applicant’s rights have been violated. The Family and Medical Leave Act (FMLA): entitles qualified applicants up to 12 weeks of unpaid leave for certain reasons. If an applicant is not hired because he or she had previously exercised his or her rights under the FMLA, a court may conclude that the applicant’s rights have been violated. For example, a federal appellate court held that an employer who failed to hire an applicant because she “took a lot of FMLA” violated this statute. Copyright © 2015 Pearson Education, Inc.  

16 Uniform Guidelines on Employee Selection ProceduresThe UGESP require the elimination of adverse impact or its justification through validation studies. The Guidelines generally state that cut scores should be set no higher than necessary to achieve acceptable proficiency among those hired. The determination of this minimum proficiency level is up to the firm. Even if an assessment method or battery is highly valid, it is not advisable to set a cut score that generates adverse impact and that screens out minority applicants whose scores are consistent with normal expectations of acceptable proficiency. The UGESP also state that “the way in which normal expectations of proficiency within the workforce were determined and the way in which the cutoff score was determined” should be described. To deal with adverse impact problems, the UGESP also discuss the use of “alternative procedures” that cause less adverse impact but that have similar validity to the problematic procedure. Copyright © 2015 Pearson Education, Inc.  

17 Preference for Diversity During Final ChoiceAffirmative action and diversity programs need to be carefully implemented to avoid the potential for legal trouble. Pursuing diverse hires should not begin during the assessment stage of the hiring process. If qualified diverse candidates do not become part of the applicant pool, no selection system can identify them. If sourcing and recruiting activities identify and attract qualified diverse applicants, then applying a valid assessment system that has little to no adverse impact should generate quality, diverse hires. Successfully attracting qualified diverse applicants eliminates the need to consider any protected characteristic as a “plus factor” in the final candidate choice. Copyright © 2015 Pearson Education, Inc.  

18 Copyright © 2015 Pearson Education, Inc. Job Offer Strategies Particularly for firms with a talent philosophy of viewing employees as investors rather than assets, the job offer should maximize the employee value proposition offered to the finalist. Before extending a job offer, or deciding on the content of the job offer, it is always a good idea to verify the truthfulness of any statements made by the applicant that were relied on in assessing the candidate or deciding on the offer’s contents Grade point average, prior work experience, prior salary, etc. It is also a good idea to identify a backup hire in case your first choice does not take the job. Copyright © 2015 Pearson Education, Inc.  

19 Copyright © 2015 Pearson Education, Inc.

20 Compensation DecisionsLow job offer: below-market rewards package Competitive job offer: total rewards package is competitive with the market High job offer: total rewards package is above the market Maximum job offer: the company’s best and final offer Copyright © 2015 Pearson Education, Inc.  

21 Copyright © 2015 Pearson Education, Inc. Employment Contract Implicit employment contract: an understanding that is not part of a written or verbal contract. Because binding contracts for employment or for future compensation can be created verbally, great care should be taken during discussions with prospective new hires. To be legally binding and enforceable, any contract must consist of an offer outlining the terms and conditions of employment (and possibly a deadline for accepting the contract) that is accepted on the terms offered. Something of value (consideration), usually promises of pay in exchange for promises for labor, must also be exchanged. An agent authorized by the receiver can negotiate on the finalist’s behalf, and agents authorized by the organization such as executive recruiters and search consultants can negotiate on behalf of the company. Offer letter: written letter describing in clear and precise terms exactly what the compensation structure and terms of employment will be. Copyright © 2015 Pearson Education, Inc.  

22 Common Employment Contract ContentCopyright © 2015 Pearson Education, Inc.  

23 Common Employment Contract Content (cont.)Copyright © 2015 Pearson Education, Inc.  

24 Copyright © 2015 Pearson Education, Inc. Employment Contracts Statements on a job application blank (e.g., a statement that providing false information is grounds for termination), statements in employee handbooks, and statements in other documents may become interpreted as enforceable contracts. Often focus more on termination issues than on employment. Copyright © 2015 Pearson Education, Inc.  

25 Additional AgreementsFirst rights to their inventions and patents Nondisclosure agreements Incompete clauses Non-solicitation agreements It is a good idea to consult legal counsel before preparing any contract forms or statements on application forms Because states’ laws differ, employment law counsel should also be consulted to determine whether your state’s law enforces non-compete covenants and, if so, under what circumstances Copyright © 2015 Pearson Education, Inc.  

26 Copyright © 2015 Pearson Education, Inc. Presenting a Job Offer In writing Verbally Showing your company as a unique or exciting place to work can help close the deal Emphasizing the selling points of the job itself and the career development opportunities that exist, as well as selling the company’s image and brand, can increase the appeal of the opportunity to the candidate The job rewards analysis should help identify some of a job’s most attractive features Copyright © 2015 Pearson Education, Inc.  

27 Copyright © 2015 Pearson Education, Inc. Presenting a Job Offer Should reinforce the company image and the positive impression formed by the candidate during the hiring process While the candidate is considering the offer, it is a good idea to stay in contact with him or her to reinforce your enthusiasm Copyright © 2015 Pearson Education, Inc.  

28 Negotiable Job Offer ElementsCopyright © 2015 Pearson Education, Inc.  

29 Salary Negotiating ZoneCopyright © 2015 Pearson Education, Inc.  

30 Job Offer Negotiation TipsDo not look at a negotiation as an either/or proposition Identify what you can and cannot part with and be realistic Try to identify and use sources of leverage Suppress your emotions Know your BATNA Take time to evaluate the offer Practice your negotiation skills Document and be prepared to discuss your skills and accomplishments Be appreciative and respectful; remember that employment is an ongoing relationship Copyright © 2015 Pearson Education, Inc.  

31 Copyright © 2015 Pearson Education, Inc. Closing the Deal For job offer acceptances: Ensure that the finalist followed the proper procedures, accepted the job offer as written, and responded before the deadline. Congratulate the new hire and express your enthusiasm about having him or her onboard. It can also be helpful to ask what persuaded the person to say yes, and what he or she thought of each company contact and the hiring process. To begin the new hire’s transition into the company, stay in contact with the new hire and encourage his or her supervisor and coworkers to do the same. Once a job offer has been accepted, the recruiter’s role is to begin building the new hire’s commitment to the company and enhancing his or her ability to succeed on the job. Copyright © 2015 Pearson Education, Inc.  

32 Copyright © 2015 Pearson Education, Inc. Closing the Deal, cont. When the company rejects a candidate: Do so respectfully. Distributive fairness will be perceived as low, and to reduce negative spillover effects, efforts should be made to enhance the procedural and interactional fairness perceptions of rejected applicants. Negative reactions of rejected internal candidates may be reduced by explaining why they were not chosen, and what they can do to be more competitive for the position in the future. Development plans can be created to help the rejected employees enhance their experience and qualifications. Copyright © 2015 Pearson Education, Inc.  

33 Copyright © 2015 Pearson Education, Inc. Closing the Deal, cont. When a finalist rejects a job offer: Try to find out why and whether an enhanced offer might be acceptable if the firm is willing to negotiate. Promptly and respectfully acknowledge the rejection. Be sure to keep appropriate records of all applicants for EEO/AA computations, such as applicant flow. If a rejected applicant is qualified for a different position or if they might be hirable in the future for the job to which he or she applied, requesting permission to retain the applicant’s information for a period of time can help to build a talent pipeline and facilitate the future sourcing and recruiting of pre- qualified applicants. Copyright © 2015 Pearson Education, Inc.  

34 Copyright © 2015 Pearson Education, Inc. Fairness Perceptions Distributive fairness: the perceived fairness of the outcomes received Because most applicants don’t get a job offer, distributive fairness perceptions are often low Procedural fairness: the perceived fairness of the policies and procedures used to determine the hiring outcome Interactional fairness: perceptions of the degree of respect and the quality of the interpersonal treatment received Attending to procedural and interactional fairness perceptions can increase finalists’ willingness to accept job offers and can help reduce the negative spillover effects among those applicants turned down for the job who perceive low distributive fairness Copyright © 2015 Pearson Education, Inc.  

35 Copyright © 2015 Pearson Education, Inc. Reneging Reneging is backing out of a contract after it is accepted. Job seekers should never accept an offer unless willing to commit Employers should never pressure candidates to renege on other employers If an employer must renege on a job offer or new hire, perhaps because business conditions have changed, the individual often receives compensation for breaking the contract Honesty and respect can reduce subsequent feelings of unfairness and inequity and maintain the individuals’ willingness to work for the firm in the future Copyright © 2015 Pearson Education, Inc.  

36 Copyright © 2015 Pearson Education, Inc. Discussion Questions Which approach to combining candidates’ assessment scores would you favor for choosing candidates? Why? Is it ethical for some new hires to receive different levels of pay and benefits than other new hires? Why or why not? If you received a job offer via , with no phone or personal contact, how would you feel? Would it influence your decision to accept the offer? Copyright © 2015 Pearson Education, Inc.  

37 Copyright © 2015 Pearson Education, Inc. Discussion Questions If you received a very appealing job offer one week after accepting a different job offer with another company, what would you do? Think about different job offers you have received. What made some of them better than others? Copyright © 2015 Pearson Education, Inc.  

38 Develop Your Skills ExerciseThis chapter’s “Develop Your Skills” feature provided several tips on negotiating a job offer. In this exercise, you and a partner will use these tips to role-play a job offer negotiation. When you have finished, switch roles and negotiating partners so that you each have a chance to be the company representative and a chance to be the finalist with someone else. Your instructor will provide you each with more information and goals for your role. Copyright © 2015 Pearson Education, Inc.  

39 Opening Vignette ExerciseIn this chapter’s opening vignette you learned how MarineMax tries to tailor its job offers to specific candidates. Working in a group of 3-5 students, reread the vignette and be prepared to share with the class your answers to the following questions: Do you think that it is ethical for MarineMax to give different new hires for the same job different amounts of pay and benefits? Should MarineMax use a low, competitive, or high job offer? Why? Should the company present a maximum job offer or leave room to negotiate? Why? What can MarineMax do to increase the likelihood that the top sales candidates it recruits will accept its job offers? Copyright © 2015 Pearson Education, Inc.  

40 Chern’s Case AssignmentDevelop a rational way of combining the scores on the assessment methods you recommended. Recommend either a multiple hurdles, compensatory, or combined approach and explain. Describe the weights for each assessment method when calculating the overall score. Using your interview score results, candidate résumés, and scores on the assessment methods you included in your assessment plan, identify which two candidates should receive an offer. Submit this information along with your rationale. Copyright © 2015 Pearson Education, Inc.  

41 Chern’s Case Assignment, cont.Explain what additional information you would like to have had before making a hiring decision. Write a job offer letter to the top candidate of your two chosen hires (you only need to write one letter). Receive feedback from your instructor on the outcomes for the candidates you chose. Calculate the ROI or net return of your staffing investment for the two people you selected. Interpret the ROI or net return. Copyright © 2015 Pearson Education, Inc.  

42 Copyright © 2015 Pearson Education, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2015 Pearson Education, Inc.