Decision Making
© 2013 by Nelson Education
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Chapter Learning Outcomes

After reading this chapter you should:
◦ Appreciate the complexity of decision making in
the employee selection context
◦ Be familiar with the sources of common decisionmaking errors in employee selection
◦ Understand the distinction between judgmental
and statistical approaches to the collection and
combination of applicant information
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Chapter Learning Outcomes
(continued)
◦ Understand the advantages and disadvantages of
various decision-making models
◦ Appreciate issues involved with group decision
making
◦ Know the basic principles in the application of
cut-off scores, banding, and top-down selection
◦ Be able to discuss the benefits of using best
practices in recruitment and selection
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The Context of Selection Decisions


Satisficing: making an acceptable or
adequate choice rather than the best or
optimal choice
Organizational fit: an applicant’s overall
suitability for the organization and its
culture
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Selection Errors

Implicit theories: personal beliefs that are
held about how people or things function,
without objective evidence and often
without conscious awareness
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Outcomes of the Selection Process


False positive error: occurs when an
applicant who is assessed favourably turns
out to be a poor choice
False negative error: occurs when an
applicants who is rejected would have been
a good choice
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Methods of Collecting and
Combining Applicant Information
Table 10.1


Pure judgment approach: an approach in
which judgemental data are combined in a
judgmental manner
Trait rating approach: an approach in which
judgmental data are combined statistically
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Methods of Collecting and
Combining Applicant Information
Table 10.1(continued)


Profile interpretation: an approach in which
statistical data are combined in a
judgmental manner
Pure statistical approach: an approach in
which data are combined statistically
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Methods of Collecting and
Combining Applicant Information
Table 10.1(continued)


Judgmental composite: an approach in
which judgmental and statistical data are
combined in a judgmental manner
Statistical composite: an approach in which
judgmental and statistical data are
combined statistically
Group Decision Making

Researchers conclude that groups are
generally better at problem solving and
decision making than the average individual
◦ Groups make better selection decisions than
individuals
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Class Activity
1.
2.
Think about the types of decisions you
make on a daily basis. What would be
some examples of routine and nonroutine decisions?
Is it better to discuss the decision making
process as a group or on an individual
basis? What has been your experience in
this area?
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Incremental Validity and Cut-off
Score



Incremental validity: the value in terms of
increased validity of adding a particular
predictor to an existing selection system
Cut-off score: a threshold; those scoring at
or above the cut-off score pass, those
scoring below fail
Selection ratio: the proportion of applicants
for one or more positions who are hired
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Decision-Making Models






Unit and Rational Weighting
Multiple Regression Model
Multiple Cut-Off Model
Multiple Hurdle Model
Combination Model
Profile Matching Model
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Making Selection Decisions

Top-down selection: involves ranking
applicants on the basis of their total score,
selecting from the top down until the
desired number of candidates has been
selected
◦ Based on the assumption that individuals scoring
higher will be better performers on the job than
those scoring low
◦ Considered the best approach for maximizing
organizational performance
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Banding

Banding: refers to a grouping process that
takes into account the concept of standard
error of measurement involves grouping
applicants based on ranges of scores
◦ Cut-off scores are actually a form of banding
where there are two bands
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Making Selection Decisions:
Conclusions

1.
2.
3.
Selection systems are made more effective
by the following recommendations:
Use valid selection instruments
Dissuade managers from making selection
decisions based on gut feelings or
intuition
Encourage managers to keep track of their
own selection “hits” and “misses”
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Making Selection Decisions:
Conclusions (continued)
4.
5.
Train managers to make systematic
selection decisions
Periodically evaluate or audit selection
decisions in order to identify areas
needing improvement
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Recruitment and Selection
Notebook 10.1

Making the Selection Decision
1.
1.
1.
Identify all of the sources of information
about the applicant available to you
Use reliable, valid selection instruments
whenever possible
Determine which decision-making
model you will use
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Recruitment and Selection
Notebook 10.1(continued)
4.
5.
If using the regression or combination
models, collect and save data over a
period of time for all predictors as well
as job performance data for those
applicants who are hired
If using multiple cut-off or multiple
hurdle models, determine appropriate
cut-off scores for each predictor
Recruitment and Selection
Notebook 10.1(continued)
6.
7.
Combine data from different predictors
statistically to yield an overall score
Offer the position(s) to the candidate(s)
with the highest overall score(s)
Summary



Selection decisions are made by groups,
rather than by individuals
Methods that involve combining applicant
information in a statistical manner are
better methods in reducing errors and
predicting job performance
Various decision-making models are used
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Discussion Questions
1.
2.
What are the common decision-making
errors made in employee selection? Can
these be eliminated? If so, how? If they
cannot be eliminated, can they be
reduced? If so, how?
What is the difference between judgmental
and statistical approaches to the
collection and combination of applicant
information?
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Discussion Questions (continued)
3.
4.
Why do organizations tend to use groups
to make selection decisions? What are the
advantages and disadvantages of group
decision making?
Why is it better to use predictors that are
uncorrelated or that have a low correlation
with each other than predictors that are
highly correlated with each other.
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