The Economic Impact of Job Selection Methods on Size, Productivity, and Payroll Costs of the Federal Work Force: An Empirically Based Demonstration

Abstract

In this study, job performance increases resulting from improved selection validity were measured empirically rather than estimated from the standard linear regression utility equations. Selection utility analyses based on these empirical measurements were carried out for most white‐collar jobs in the federal government. Results indicate that selection of a one‐year cohort based on valid measures of cognitive ability, rather than on non‐test procedures (mostly evaluations of education and experience), produces increases in output worth up to $600 million for each year that the new employees remain employed by the government. Newly hired federal employees remain with the government an average of approximately 13 years, resulting in a total gain in output of almost $8 billion over this period. This gain represents a 9.7% increase in output among new hires. If total output is held constant rather than increased, new hiring can be reduced by up to 20,044 per year (a 9% decrease), resulting in payroll savings of $272 million for every year the new cohort of employees remains on the job. The percentage of new hires in the bottom decile of the non‐test‐selected job performance distribution

Is It Worth It to Win the Talent War? Evaluating the Utility of Performance‐based Pay

“…As a very conservative approach, we assumed that SDy would equal 30% of average salary. This is substantially less than Schmidt and Hunter's (1983) 40% recommendation, which has been characterized as a conventional benchmark (Becker & Huselid, 1992), a safe estimate (Schmidt, Hunter, Outerbridge, & Trattner, 1986), and a conservative estimate (Judiesch, Schmidt, & Mount, 1992). We also used 60% of average salary as a somewhat conservative estimate, and we used 90% of average salary as what we believe to be a more realistic estimate.…”

Racially gerrymandering the content of police tests to satisfy the U.S. Justice Department: A case study.

“…The test might be replaced by another kind of selection device (say, biographical data inventories). Validity is usually sacrificed in the process, and the drop in workforce performance can be quite marked (Schmidt, Hunter, Outerbridge, & Trattner, 1986).…”

Time Orientation in Organizations: Polychronicity and Multitasking

“…On the contrary, one could also argue that individual differences in multitasking ability will facilitate individuals to gain proficiency in jobs requiring that skill and thereby amplify the performance differences over time (i.e., the divergence hypothesis). In the domain of cognitive ability, Schmidt, Hunter, Outerbridge and Goff (1988) tested these competing hypotheses and found that validities remained constant over five years (See also Schmidt, Hunter & Outerbridge, 1986). Research is needed to assess individual differences in growth and learning curves over time where multitasking ability is involved.…”