MGTO 324 Recruitment and Selections

1. MGTO 324 Recruitment and Selections Personnel Judgment and Decision Making Kin Fai Ellick Wong Ph.D. Department of Management of Organizations Hong Kong University of Science & Technology

2. Prologue • Recruitment and selection are • Prediction process • We predict the future performance of job applicants • Judgment process • We judge the future performance of job applicants • Decision making process • We have to decide which applicants to hire

3. Prologue • We know that human beings are subject to judgment and decision biases • How do these biases influence personnel selections? • Which aspects in decision making should we pay attention to?

4. Outline

5. Part 1: Hiring Standards • Hiring standards • The cut scores representing a passing score • A single score from a single predictor • A total score or an average score from multiple predictors • Applicants with scores higher than the cut scores are predicted or judged to be successful • should be hired • Applicants with scores lower than the cut scores are predicted or judged to be not so successful • Should be rejected

6. Part 1: Hiring Standards • Hiring standards • When the predictor’s validity is 1 • There is no error, indicating that the prediction is perfect • All applicants with scores higher than the cut scores (i.e., > X) are indeed successful • All applicants with scores < X are indeed unsuccessful • When the predictor’s validity is lower than but close to 1 • There are some errors, indicating that the prediction is not perfect • Most applicants with scores > X are indeed successful (no errors) • Most applicants with scores < X are indeed unsuccessful (no errors) • Some applicants with scores > X are indeed unsuccessful (errors) • Some applicants with scores < X are indeed successful (errors)

7. Part 1: Hiring Standards • Hiring standards • When the predictor’s validity is close to 0 • There are some errors, indicating that the prediction is not perfect • About _____ applicants with scores > X are indeed successful (no errors) • About _____ applicants with scores < X are indeed unsuccessful (no errors) • About _____ applicants with scores > X are indeed unsuccessful (errors) • About _____ applicants with scores < X are indeed successful (errors)

8. Part 1: Hiring Standards

9. Part 1: Hiring Standards

10. Part 1: Hiring Standards

11. Part 1: Hiring Standards

12. Part 1: Hiring Standards

13. Part 1: Hiring Standards • Effects of setting the cut scores on errors • When a high score is used • No. of True positive (correct hit): increase or decrease? ↓ ↓ • No. of True negative (correct rejection): increase or decrease? ↑↑ • No. of False positive (false alarm): increase or decrease? ↓ ↓ • No. of False negative (miss): increase or decrease? ↑↑ • When a low score is used • No. of True positive (correct hit): increase or decrease? ↑↑ • No. of True negative (correct rejection): increase or decrease? ↓ ↓ • No. of False positive (false alarm): increase or decrease? ↑↑ • No. of False negative (miss): increase or decrease? ↓ ↓

14. Part 1: Hiring Standards • How high the cut score should be? • It depends on the costs of “false alarm” and “miss” • For jobs of which the costs of “false alarm” are significantly higher than “miss”, probably we should set high scores • E.g., medical doctors, clinical psychologists • For jobs of which the costs of “miss” are significantly higher than “false alarm”, probably we should set low scores • E.g., salespeople, insurance agents • See you textbook for the specific methods to determine the cut scores (p. 550 - p.554)

15. Outline

16. Part 2: Judgment and Decision making biases

17. Part 2: Judgment and Decision making biases • I am going to present three well selection biases • Escalation of commitment • Bazerman et al. 1982, Organizational Behavior and Human Decision Processes; Schoorman, 1988, Journal of Applied Psychology • Decoy effects • e.g., Highhouse, 1996, Organizational Behavior and Human Decision Processes; Slaughter et al., 1999, Journal of Applied Psychology • Number size framing • Wong & Kwong, in press, Organizational Behavior and Human Decision Processes; Wong & Kwong, 2005, Journal of Applied Psychology

18. Part 2: Judgment and Decision making biases • Escalation of commitment • Increasing commitment to a losing course of action, particularly when one is personally responsible for the initial decision • (data from Schoorman, 1998, JAP)

19. Part 2: Judgment and Decision making biases

20. Part 2: Judgment and Decision making biases • Condition A • Condition B

21. Decoy Effects • Condition A • Condition B

22. Decoy Effects • Condition A • Condition B

23. Decoy Effects • Condition A • Condition B

24. Decoy Effects • Condition A • Condition B

25. Part 2: Judgment and Decision making biases

26. Free Throw Performance Reggie Miller Mike Bibby Hit %: 89 80 Miss %: 11 20

27. Wong and Kwong (2005, Experiment 1, JAP)

29. Preference reversal owing to number size framing

30. Response Scale: Performance ratingsContext: HR (Performance appraisal) Wong and Kwong (2005, Experiment 2, JAP)

31. Response Scale: ChoiceContext: HR (Personnel selection) Wong and Kwong (in press, Experiment 3a, OBHDP)

32. Response Scale: SalaryContext: HR (Compensation) Wong and Kwong (in press, Experiment 3b, OBHDP)