Utility Concerns in Choosing an Assessment Method

Randy May is a 32-year-old airplane mechanic for a small airline based on Nantucket Island, Massachusetts. Recently, Randy won $2 million in the New England lottery. Because Randy is relatively young, he decided to invest his winnings in page 603a business to create a future stream of earnings. After weighing many investment options, Randy chose to open up a chain of ice cream shops in the Cape Cod area. (As it turns out, Cape Cod and the nearby islands are short of ice cream shops.) Randy reviewed his budget and figured he had enough cash to open shops on each of the two islands (Nantucket and Martha’s Vineyard) and two shops in small towns on the Cape (Falmouth and Buzzards Bay). Randy contracted with a local builder, and the construction/renovation of the four shops is well under way.

The task that is occupying Randy’s attention now is how to staff the shops. Two weeks ago, he placed advertisements in three area newspapers. So far, he has received 100 applications. Randy has done some informal HR planning and figures he needs to hire 50 employees to staff the four shops. Being a novice at this, Randy is unsure how to select the 50 people he needs to hire. Randy consulted his friend Mary, who owns the lunch counter at the airport. Mary told Randy that she used interviews to get “the most knowledgeable people possible” and recommended it to Randy because her people had “generally worked out well.” While Randy greatly respected Mary’s advice, on reflection some questions came to mind. Does Mary’s use of the interview mean that it meets Randy’s requirements? How can Randy determine whether his chosen method of selecting employees is effective or ineffective?

Confused, Randy also sought the advice of Professor Ray Higgins, from whom Randy took an HR management course while getting his business degree. After learning of the situation and offering his consulting services, Professor Higgins suggested that Randy choose one of two selection methods (after paying Professor Higgins’s consulting fees, he cannot afford to use both methods). The two methods Professor Higgins recommended are the interview (as Mary recommended) and a work sample test that entails scooping ice cream and serving it to a customer. Randy estimates that it would cost $100 to interview an applicant and $150 per applicant to administer the work sample. Professor Higgins told Randy that the validity of the interview in predicting overall job performance for customer service employees is r = .30, while the validity of the work sample in predicting overall job performance is r = .50. Professor Higgins also informed Randy that the selection ratio is probably fairly high because there are not a lot of job seekers and because the minimum wage he plans on paying is not likely to attract people in this area.

Randy would really appreciate it if you could help him answer the following questions:

1. What parts of this information seem most important for the choice of selection measures? How does each piece of information fit with the “choice of assessment method” discussion?

2. If Randy can use only one method, which should he use?

3. If the number of applicants for these jobs increases dramatically (more applications are coming in than Randy expected), how will your answers to questions 1 and 2 change?

4. What are some additional pieces of information you would like to have before committing to any of these options? What other criteria might be relevant?