Question 1

The base rate is the number of hires divided by the number of employees.

Accepted Answer

The base rate is the number of hires divided by the number of applicants, not employees.

Question 2

Utility analysis models do not take factors like EEO/AA concerns into account.

Accepted Answer

Utility analysis models primarily focus on the economic value of human resource interventions and do not inherently consider Equal Employment Opportunity (EEO) or Affirmative Action (AA) concerns, which are more related to legal and ethical considerations.

Question 3

There are no cases in which a predictor has high validity and high adverse impact.

Accepted Answer

It is possible for a predictor to have high validity and high adverse impact, although it is less desirable. However, organizations must ensure that any selection criteria used have a fair impact on all demographic groups. If a predictor has high validity but also leads to adverse impact, it may still be used if the organization can show that it is a business necessity and there is no other equally effective selection method with less adverse impact.

Question 4

Research suggests that managers prefer the results of utility analysis to the presentation of simple validity coefficients.

Accepted Answer

The answer of Research suggests that managers prefer the results...

Question 5

A significance level of p < 0.05 means that there are fewer than 5 chance in 100 of concluding there is a relationship in the population of job applicants,when in fact,there is not.

Accepted Answer

A significance level of p < 0.05 indicates that there is a 5% or less chance of concluding that there is no relationship in the population when there actually is one.

Question 6

When deciding whether or not to use a new predictor,the validity coefficient,the base rate,and the selection ratio should be considered in combination,not independently.

Accepted Answer

These three factors interact with each other and influence the overall effectiveness of a new predictor in predicting job performance. Only considering one factor and ignoring the others may lead to inaccurate conclusions and poor decision-making.

Question 7

In general,the greater the correlation of a given predictor with other predictors of a criterion,the more useful the predictor will be.

Accepted Answer

A high correlation between predictors may indicate multicollinearity, which can lead to problems with interpreting the individual effects of each predictor on the criterion variable. Therefore, it is generally more desirable to have predictors that are not highly correlated with each other.

Question 8

Utility refers to the expected gains to be derived from using a predictor.

Accepted Answer

This statement is true. Utility can be measured by the reduction in prediction error or the monetary value of correct predictions.

Question 9

If you are using the "economic gains formula," and you have just increased the validity of your selection procedures with no change in cost,your economic gain value should increase.

Accepted Answer

The economic gains formula takes into account the cost of the selection procedures and the potential financial gains from hiring more productive employees. If the validity of the selection procedures increases with no change in cost, this means that you can potentially hire more productive employees without increasing your expenses. Therefore, the economic gain value should increase.

Question 10

It is desirable that the denominator of a selection ratio be small.

Accepted Answer

A small denominator in a selection ratio would indicate a low number of available candidates or options, which could limit the effectiveness and representativeness of the selection process. A larger denominator suggests a wider pool of candidates, generally considered more desirable for making informed and diverse selections.

Question 11

Practical significance is the sign of a correlation coefficient.

Accepted Answer

Practical significance is not directly related to the sign of a correlation coefficient, which only indicates the direction of the relationship between two variables. Practical significance refers to the magnitude of the correlation and whether it has important real-world implications or not.

Question 12

The selection ratio is the number of people hired divided by the number of applicants,and it is desirable that this ratio be high.

Accepted Answer

A high selection ratio means that few applicants were hired, which may indicate a low level of competition for the job and a less rigorous selection process. It is generally more desirable to have a lower selection ratio, as it suggests a higher level of competitiveness and a more thorough selection process.

Question 13

Statistical significance is stated as a probability and indicates a given predictor's chances of yielding similar validity coefficients with different sets of applicants.

Accepted Answer

Statistical significance is indeed stated as a probability, typically expressed as a p-value, and it reflects the likelihood that a given result could have occurred by chance. In the context of personnel selection, statistical significance is often used to determine whether a particular selection tool or predictor is likely to yield consistent results across different groups of job applicants. Specifically, a high level of statistical significance suggests that a predictor is likely to be reliable and valid across diverse samples of applicants, while a low level of statistical significance may indicate that the tool is inconsistent or unreliable.

Question 14

The usefulness of a predictor is determined by the value it adds to the prediction of job success above and beyond the forecasting powers of other available predictors.

Accepted Answer

This statement is true. The usefulness of a predictor is determined by how much additional value it adds to the prediction of job success compared to other available predictors. If a predictor has little or no added value, then it may not be useful for making hiring decisions.

Question 15

All other things being equal,if a selection specialist must decide between two predictors,the one that causes the least adverse impact would be the best choice.

Accepted Answer

Adverse impact is a legal concept that refers to a disproportionate rate of selection for employment or promotion for any particular group. As per EEOC guidelines, all other things being equal, the predictor that causes the least adverse impact on any protected group (based on race, sex, ethnicity, etc.) should be given priority.

Question 16

A useful predictor is one where the sign of the relationship is consistent with the logic or theory behind the predictor.

Accepted Answer

When the sign of the relationship between a predictor and the outcome variable is consistent with the theory or logic behind the predictor, it provides support for the validity of the predictor. Therefore, a useful predictor is one where the sign of the relationship is consistent with the logic or theory behind it.

Question 17

The most fundamental concern regarding utility analysis is that it lacks realism.

Accepted Answer

Utility analysis relies on assumptions and models that may not accurately reflect real-world organizational dynamics and complexities. Additionally, it may not account for intangible factors such as employee motivation and satisfaction, which can significantly impact organizational success.

Question 18

Utility decreases as the number of valid predictors used in the selection process increases.

Accepted Answer

Utility generally increases with more valid predictors, as they provide more information for making accurate decisions.

Question 19

The most difficult factor in the economic gain formula to estimate is "cost per applicant."

Accepted Answer

The most difficult factor to estimate in the economic gain formula is often the "utility" or "value" of the employee's performance, not the "cost per applicant."

Question 20

Validity refers to the relationship between predictor and criterion scores.

Accepted Answer

Validity refers to the extent to which a predictor (such as a test or measurement) is related to a criterion (such as performance on a job). So, the answer is true.

Quiz 11: Decision Making