Comparing financial and social costs for top‐down versus fixed‐band selection: A practical application with bus drivers

Abstract

A number of solutions have been proposed to the diversity‐validity dilemma arising from the use of cognitive ability tests in employment selection. Cognitive ability tests predict training and job performance but also produce adverse impact against minority groups. Although banding reduces adverse impact, it has been criticized for also reducing the utility of the selection process. We assessed the social and financial impact of a fixed band approach with top‐down hiring across several hiring scenarios with a pool of bus driver applicants. Overall, the fixed band approach reduced adverse impact without substantially reducing the cost effectiveness of the hiring process. We discuss the implications of these two approaches in the context of the diversity‐validity dilemma. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd.