Employee Selection—Structured Exercise

This exercise introduces participants to the concept of employee selection, its benefits to organizations and its
complexities. At the end of this exercise, participants will learn the steps required to design, implement and
assess an employee selection process for a job position.

Learning Objectives

During this exercise, participants will learn to:

1. Choose selection methods relevant to a job.

2. Create various options to operationalize the selection methods.

3. Apply a scoring system to a set of applicants.

4. Devise a compensatory selection strategy and apply it.

5. Devise a non- compensatory selection strategy and apply it.

6. Conduct an adverse impact analysis.

7. Determine the decision-making accuracy for the selection system.

8. Reflect on the complexities of employee selection.

Introduction to Employee Selection

Many people without a background in human resource management mistakenly equate hiring with
employee selection. Hiring is a broad concept that can take several approaches, such as offering a job
ction to Employee Selection

to someone because of who he/she knows (e.g., my dad is the boss, so I got the job) or taking the
first person who walks through the door to a get a “body” on the sales floor as soon as possible.
Employee selection is a formal process in which the organization (1) identifies the tasks, duties and
responsibilities (TDRs) associated with the job; (2) assesses applicants’ readiness to successfully
perform these TDRs; and (3) offers the job to the most qualified applicant for the position.

Organizations that adopt an employee selection approach to hiring must make a series of decisions
to develop an effective process that identifies the most-qualified applicant.

1. Review and Revise the Job Description

The first step to establish an employee selection process is to review and possibly revise the job
description for the position. An accurate job description contains a job specification section, which
includes the knowledge, skills, abilities and other characteristics (e.g., college degree, driver’s
license, relevant work experience), or KSAOs, needed for the job incumbent.

2. Choose the Appropriate Selection Methods

After identifying the significant KSAOs, the next step is to choose the selection methods. Selection
methods may include an employment interview, a personality inventory, submission of a résumé, etc.
These selection methods are used to assess the identified KSAOs.
3. Create an Implementation Schedule
Once the selection criterion and methods are decided, an implementation schedule must be created.
An implementation schedule determines the order in which selection methods are administered. After
the schedule is determined, selection methods are applied to the applicant pool. As a result, some
applicants will no longer be considered for the opening. In addition, a scoring system may be used to
identify the strongest candidates. At the end of the selection process, the “best” applicant is selected

Part 1: Employee Selection and Assessment

and offered the job.

4. Assess the Effectiveness of the Selection System

Once the top applicant accepts the job, the selection process itself is complete. It is recommended,
however, that the process be evaluated from time to time to ensure its effectiveness. When evaluating
the selection system, two approaches can be used: an adverse impact analysis and/or a study to
assess decision-making accuracy.

Even if a selection process treats applicants equally, a discrimination lawsuit may still result if the equal
treatment had an unequal effect on a particular protected class. An adverse impact analysis can be
conducted to determine if the selection system has an unequal effect based on a protected class of
applicants.

The selection system can also be evaluated to assess its predictive accuracy for job success or
decision-making accuracy. Even if the selection system is working properly in terms of
nondiscrimination, it does not make sense for an organization to use a hiring approach that is not
effective at predicting successful employees. In this exercise, you will have an opportunity to conduct
both of these evaluation approaches.

The Exercise

Develop, Implement And Assess An Employee Selection System For A Bank Teller
Position

Part 1: Employee Selection and Assessment

For this exercise, assume you are employed as an HR consultant for a mid-sized bank. The bank
employs 200 tellers across its branches. The following is a partial job description and specification for
the bank teller position.

Bank Teller Tasks/Duties/Responsibilities

• Cash checks for customers after verification of signatures and sufficient funds in the account.
• Receive checks and cash for deposit.
• Examine checks for endorsements and verify other information such as
dates, bank names and identification.
• Enter customers’ transactions into computers to record transactions.
• Count currency, coins and checks received to prepare them for deposit.
• Identify transaction mistakes when debits and credits do not balance.
• Balance currency, coins and checks in cash drawers at ends of shifts.

KSAOs
• Customer service skills.
• Basic math skills.
• Knowledge of verification requirements for checks.
• Ability to verify signatures and proper identification of customers.
• Ability to use accounting software.
 • High school diploma required, Associate’s or Bachelor’s degree preferred.
• Previous work experience as a teller or related occupation (cashier, billing clerk) desired.

Key statistics
The median wage for tellers was $13.24 (hourly)
there were approximately 558,000 tellers in the United States.
Projected growth for this job is slower than average.

Based on this information, the bank decides that the ideal candidate for this position
will possess the following factors:

1. Have at least a high school education (bachelor’s or associate’s degree desirable).

2. Have experience as a teller or in a related field (cashier, billing clerk).
3. Be able to perform basic math skills related to banking (for example, count
currency quickly and accurately and balance a cash drawer correctly).
4. Be knowledgeable of verification requirements for bank transactions (for
example, errors in checks and proper identification to authorize transactions).
5. Have good interpersonal skills (for example, speak clearly, make good eye
contact and develop rapport easily).
6. Be motivated to work.

Employee Selection Exercise

[A] Choose the selection methods:
Identify which selection method (e.g., résumé, interview, test, role-play exercise, reference check or
loyee Selection and Assessment

personality inventory) you would recommend for each of the six factors listed above. You can use the
same selection method more than once if you believe it is appropriate for more than one factor. Below
is an example of how you might justify using an application form as an appropriate selection method for
education.

1. Education – selection method: Application form

rt 1: Employee
Justification: A question on the application form can ask applicants to describe their education. This selection
method makes it easy and inexpensive to obtain this information.

2. Work experience – selection method: Application form

Justification: A question on the application form can ask applicants to describe experience details. This
selection method makes it easy and inexpensive to obtain this information and can be scrutinized based on
experience

3. Math skills – selection method: Written Test

Justification: By conducting written test, we can able to test math skills and can able to limit the no of
candidates

4. Verification knowledge – selection method:

Justification:

5. Interpersonal skills – selection method:

 Justification:

6. Work motivation – selection method:

Justification:

Part 1: Employee Selection and Assessment

B. Operationalize your assessments:
Now that you have identified selection methods for the six factors, you must decide how to score each
of these assessments. Based on your responses in part A (“Choose the selection methods”), think
about how each factor may be scored and develop a point system for that factor.

A common approach to performing this task is to have some type of numerical rating system that may
include one or two minimum requirements. Your task is to develop a rubric (point system) to “score”
applicants for each of the six factors. In developing your rubric, review the job description information. The
“education” factor is provided for you below. Remember that tellers need to have a high school diploma,
according to the job specification. Applicants who do not meet this requirement are rejected. College
degrees are preferred and receive more points in the example below.

1. Education assessed via a pplication form. My assessment:

Points Highest Level of
10 Education
Bachelor’s level or higher
6 Associate’s degree
3 High school diploma
Reject Less than high school
diploma

2. Work experience assessed via

My assessment:

3. Math skills assessed via

My assessment:

4. Verification knowledge assessed via

My assessment:

5. Interpersonal skills assessed via

My assessment:

6. Work motivation assessed via

My assessment:

C. Apply your assessment systems: Listed below are applicants for the teller position.
Based on your answers in part B (“Operationalize your assessments”), score each of the
applicants.

Sample applicant information

essment

Maria Lori Steve Jenna

Education Associate’s H.S. diploma G.E.D. Bachelor’s
degree degree
Work experience 4 years as a 1 year as a teller 5 years as a Completed a
cashier sales clerk at a semester
national retail internship at a
clothing store bank
Math skills Very strong Marginal chain
Satisfactory Good
Verification Marginal Strong Satisfactory Strong

Part 2: Selection Strategy

knowledge
Interpersonal Very strong Good Good Good
skills
Work motivation Good Good Marginal Strong

Score the applicants

Mari Lori Stev Jenn

Education a
6 3 e
3 a
10
Work experience
Math skills
Verification
knowledge
Interpersonal
skills
Work motivation

(a) Which applicants scored best based on the scores you entered into the table?

(b) What difficulties did you have applying your scoring system?

(c) Based on this applicant data, would you make any changes to your rubrics? If yes, please describe.

Part 2: Selection Strategy

Now that you have created a system to assess applicants on the six key factors, you must decide how
to process this information. Employee selection systems have multiple assessments, and organizations
must decide how to integrate them.

One assessment strategy is compensatory and allows an applicant’s strengths to compensate for
weaknesses in another area. For example, a recent college graduate may score highly in the
educational requirements for a job opening but score low in terms of work experience. A
compensatory strategy will help the recent graduate’s limited work experience be “compensated” by
his or her high level of education.

A compensatory selection strategy may be unweighted or weighted. In an unweighted strategy, all of

the factors have the same highest score possible and scores are simply added together. The applicant
with the highest score is considered the best and offered the job. To apply this strategy to this
exercise, convert all six factors to a possible high score of 100. For example, multiply each education
score by 10 (highest score possible for education = 10, so 10 x 10 = 100). Then, add the scores for
each applicant.

Maria Lori Stev Jenn

e a
 Education 60 30 30 100
Work experience
Math skills
Verification
knowledge
Interpersonal skills
Work motivation
TOTAL
1. Who scored the highest?

2. Do you think this person is the best applicant? Why or why not?

3. Who scored the lowest?

You have just completed an unweighted compensatory approach to employee selection. The other
option is a weighted compensatory approach. In this approach, one or two factors are identified
as more important than the other factors and, hence, deserve more weight in deciding the best
applicant. Additionally, one or two factors may be considered least important and would have less
Part 2: Selection Strategy

weight.

To try this out, answer the following questions:

Which of the six factors do you consider the most important in terms of selecting bank tellers?
Defend your choice.

1. Based on your answer to the first question, double the points for the four applicants for this
factor. Record the answers in the table below.

2. Of the remaining five factors, which two do you see as least important for selecting bank
tellers? Defend these choices.

3. Based on your answer to question 3, divide the points in half for the four applicants for these two
factors.
Record the answers in the table below.

4. For the three factors not mentioned in questions 1 and 3, copy the scores from the previous
table into the table below. Total the scores for the four applicants.

Maria Lori Stev Jenn

Education e a
Work experience
Math skills
Verification
knowledge
Interpersonal skills
Work motivation
TOTAL
 1. Who scored the highest?

2. Do you think this person is the best applicant? Why or why not?

3. Who scored the lowest?

Part 2: Selection Strategy

4. When you compare your answers using the unweighted to the weighted approach, which
approach do you think was better? Why?
The other selection strategy is called non compensatory. Instead of adding the scores on all of the
assessments, a non compensatory strategy establishes cutoffs for each assessment. An applicant who
fails to meet or exceed a cutoff is rejected from the selection process. The cutoff can be a passing
score on a test/ inventory, a rating level (e.g., good) or a characteristic relevant to the job (e.g., valid
driver’s license). The job description is used as a guide to determine what the cutoff(s) should be.

For example, in terms of education for the teller position, the job specification indicates that a high
school diploma is required, and so the cutoff is established at this level. The challenge occurs for
factors that do not have clear guidance as to the cutoffs. If a requirement is not specified in the job
description, then subject matter experts (people knowledgeable about the job—usually either long-
term incumbents or supervisors) determine cutoffs based on their own experience with the job. They
will also consider the expected qualifications of applicants when determining these cutoffs.

Based on your knowledge and experience with bank tellers, create a cutoff for each of the six factors in
the table below.

Cutoff for each assessment

Education The applicant must have at least a high school
Work experience diploma or GED.
Math skills
Verification
knowledge
Interpersonal skills
Work motivation

Similar to the compensatory strategy, there are two options for a non compensatory approach. One
non compensatory option is called a multiple cutoff approach. In this approach, cutoffs are applied
for every factor for all applicants. Apply your cutoffs listed in the table above to the four applicants.

1. Which applicant(s) remains?

2. If no applicant met all of the cutoffs, would you rather lower the cutoffs or restart the recruiting
process?
Why?

3. If many applicants exceed the cutoffs, would you rather increase the cutoff levels, hire all remaining
applicants (if possible) or take a compensatory approach for those that exceeded all of the cutoffs?
Why?
Another non compensatory method is called a multiple hurdle approach. In this approach, cutoffs
are arranged sequentially. The first cutoff is applied to the entire applicant pool. Those applicants
who fail to meet or exceed the cutoff are rejected. The remaining applicants are then subjected to
the next cutoff, where more applicants will be rejected. This process reduces the applicant pool at
tegy

each hurdle. At the final hurdle, only a select few will remain.
 Organizations usually set cutoffs that are less costly and more objective as the initial hurdles. More
subjective and often more time-consuming assessments are set at the end of the selection process.
The multiple hurdle approach saves organizations money because not all of the applicants are
assessed on all of the factors. This approach, however, can be time-consuming because each cutoff
must be applied and then evaluated before moving to the next cutoff.

Reflect on your cutoffs and arrange them in the table below to establish your own multiple hurdle
system.

Multiple hurdle system

Rejected applicant
Hurdle 1: None, all applicants have at least high school diploma or
Education
Hurdle 2: GED.
Hurdle 3:
Hurdle 4:
Hurdle 5:
Hurdle 6:

1. At the end of hurdle 6, which applicant(s) remained?

2. What would you recommend if you had no remaining applicants or several applicants remaining?

3. Do you prefer this method over the multiple cutoff method? Why or why not?

Part 3: Evaluating the Selection System

You have now created a selection system for the job of a teller. The final step in a selection system is to
make sure the system works properly.

As discussed in the overview, there are two ways to ensure that the system is working. One approach
takes a legal perspective to ensure that organizations do not discriminate in hiring.
There are two types of discrimination: disparate treatment and disparate impact (also known as
adverse impact). Disparate treatment discrimination refers to treating applicants differently based
on a protected characteristic (for example, age, sex, national origin, religion). An example of disparate
treatment discrimination is not considering women for leadership positions. This type of discrimination
is considered intentional and therefore easy to identify and correct or prevent.

Disparate impact discrimination is considered unintentional. This form of discrimination indicates

that all applicants were treated equally; however, this equal treatment had an unequal effect related to
a protected characteristic. The most common approach to identify adverse impact is to apply the four-
fifths rule. The four- fifths rule states that adverse impact exists if the selection ratio of the minority
group is less than four-fifths (or 80 percent) of the selection ratio of the majority group. A selection
ratio is the percentage of those hired based on the percentage of those who applied for the job.
Selection ratios must be calculated for each protected group. The selection ratio of the minority group
is compared with the selection ratio of the majority group (often “males”). The simplest way to
calculate adverse impact is to divide the selection ratio of the minority group by the selection ratio of
the majority group. If the result is less than 80%, then adverse impact exists.
 For example, the bank collected the following data over the past five years:
Males applied = 200
Females applied = 300
Males hired = 40
Females hired = 45

Based on this information, the selection ratio for men is 20% (40/200), whereas the selection ratio for
women is 15% (45/300). Dividing the minority group (the group with the lower selection ratio, women)
by the majority group (in this case, men) results in an answer of 75% (15%/20%). Since the result is
less than 80%, adverse impact exists. The organization needs to explore the selection process to
identify what may be the cause of this disparity.

In this part of the exercise, you will conduct this analysis.

The bank compiled selection data on two groups during the past year: The data is as follows:

Number Number
Males applied
9 hired2
Females 0
4 7
1
0 0
1. The selection ratios for the groups
are: Males=
Females =

2. Does adverse impact exist when you compare the Male applicant pool with the Female applicant
pool?

Another way to assess the effectiveness of the selection system is to examine the decision-making
aluating the Selection System

accuracy. Employee selection is basically a system to predict which applicants will succeed on the
job. Highly qualified applicants are expected to perform well on the job. Similarly, seemingly less
qualified applicants are not expected to perform well on the job. Unfortunately, the hiring process is
complex. Some applicants can put on a “good show” and still be mediocre employees, whereas other
applicants may interview poorly but still be excellent employees. Organizations cannot assume the
selection process is working well without collecting and analyzing data.

One option to calculate the decision-making accuracy of a selection system is to classify applicants
into one of two categories: strong applicants (ones who appear to be highly qualified and are
predicted to do the job well—a good hire) and weak applicants (ones who do not appear to be
highly qualified and are predicted to not do the job well—a poor hire). Once hired and after sufficient
time (typically six months to a year) has passed, employees can also be classified into two
categories: good hire or poor hire. After all of this data is collected, the overall decision-making
accuracy of the selection process (the total hit ratio) can be calculated as the percentage of
correct predictions.

The table below shows data about the 200 tellers employed at the bank.

Poor hire Good hire Total

Strong applicant 20 80 s
100
Weak applicant 70 30 100

1. Calculate the total hit ratio by adding the correct predictions and then dividing that number by the
total number of decisions made. What is this percentage? Do you think this percentage is
impressive?
2. What percentage of weak applicants turned out to be good hires?

3. What percentage of strong applicants turned out to be good hires? This percentage is known as the
positive hit ratio.

Workbook
System
and Assessment
4. Compare your answers to questions 2 and 3. Do you think the bank’s system is effective?

Part 4: Reflection on Employee Selection

1. You have made a number of decisions in creating, implementing and evaluating a selection system
for bank tellers. Which of these decisions do you think is most critical? Why?

Selection
theStudent
2. An employee selection approach to hiring is more complex than hiring employees based on who
they know or casually scanning a résumé and asking a few “off the cuff” questions for an interview.
When you think about your work experiences, do you think the organizations you worked for took
an employee selection approach when hiring?

Selection
3. If you answered yes to question 2, do you think the organization was effective in hiring

3: Evaluating
employees? If you answered no to question 2, do you think the organization should have
adopted a selection approach to hiring? Explain your response.

PartEmployee
4. What do you perceive as the overall advantages and disadvantages of an employee selection
approach to hiring?

5. After reflecting on this exercise, would you recommend an employee selection process to hiring for
virtually any job? Why or why not?
Part 1: