How can psychology contribute to the effective management of personnel selection METHODS within Australian organisations?

University Degree Business and Administrative studies

HOW CAN PSYCHOLOGY CONTRIBUTE TO THE EFFECTIVE MANAGEMENT OF PERSONNEL SELECTION METHODS WITHIN AUSTRALIAN ORGANISATIONS?

EXECUTIVE SUMMARY

Personnel Selection is a hot topic amongst Human Resource Departments. The ever-changing nature of the workforce has put increasing demands on companies to streamline their selection procedures in order to attract the best candidates. Selection involves a number of methods such as interviews, biographical data, personality inventories and assessment centre evaluations. These methods are all dependant on standards such as reliability and validity. The aim of this study was to look at current HR strategies in selection and relate them to psychological methods of selection. Three HR managers from different companies were interviewed about the way they conduct their selection procedures. The study found that HR selection procedures are related to psychology and by using different psychological methods

selection strategies can be beneficial.

Due to the overwhelming nature of the workforce impacting on economies and the job-market, recruitment and selection has never been more important (Kraut & Korman, 1999). The role in selecting the right person is vital in the overall success of organisations. Many companies are continuing to focus on strategies to entice and obtain top employees. There are several processes that can be adopted to ensure companies are selecting the right person such as varying forms of interviews, psychometric testing and assessments among others. However, these forms of selection tools are dependent on their reliability and validity as to the extent to which they can be of benefit for companies to use. The first section of this paper will look at some of the current tools and trends in selection techniques.

Selection is defined as a process resulting in success or failure in an employment opportunity (Howard, 1995). Selection procedures refer to any procedure used singly or in combination to make a personal decision including interviews, references, biographical data, psychometric tests, inventories, job analysis and assessment centre evaluations (SIOP, 2002). All these selection procedures have different methods of measurement to assess a variety of characteristics. Before any of these processes can be used certain standards need to be met to ensure processes are accurate. Five critical standards with which all employee selection methods should conform are reliability, validity, generalisability, utility and legality (De Cieri & Kramer, 2003).

Reliability is explained as an achieved score such as IQ that will be consistent over time. Validity is the extent to which performance on a measure is related to performance on the job. Generalisability is the degree to which a selection method is valid from company to company for a specific job role. Utility is the degree to which the information provided by selection processes enhances the effectiveness of selecting personnel. Finally, selection methods need to be legal and adhere to the standard laws and precedents of society ensuring they are fair systems. These standards all impact on selection measures in varying circumstances (ibid.). It is crucial for companies when choosing selection methods to consider these standards.

Another area that companies need to consider is Job Analysis. According to SIOP (2002), it is the foundation for the development of any selection procedure. A job analysis reveals the critical tasks for a job, and the relevant knowledge, skills and abilities (KSAs) that correspond to those critical tasks. By achieving this companies can then be able to effectively choose the type of selection method they need such as interviews, assessment centres, personality tests and inventories.

Interviews are one of the most common selection tools used by companies. However, it is the structure of the interview that can influence a good or bad decision. Research has suggested that without proper care, interviews can be unreliable, low in validity and biased (Graves & Karren, 1996). Compared with unstructured interviews, structural interviews are more reliable, content focussed and measurable. Still organisations prefer unstructured interviews by a wide margin (ibid.). A comprehensive review indicates that various components of structured interviews influence the interviewer’s psychometric properties, legal defensibility and applicant/interviewer reactions (Campion, Palmer & Campion, 1997). There are several other advantages of these types of interviews including the high reliability they present (Conway, Jako & Goodman, 1995). A highly standardised situational interview, in which applicants respond to critical work incidents, can be less susceptible to rating biases such as similarity and the Halo effect (Kataoka, Latham & Whyte, 1997). Interviewer’s experience and training further standardise the interview by treating applicants in a consistent fair manner (Conway et al, 1995).

Panel interviews are another way of decreasing bias. There are several forms of structured interviews being used in selection methods. Some of the most common are Situational Interviews (questions centring on what action candidates would take in various job-related situations), and Behavioural Interviews (candidates are asked what actions they have taken in prior job situations that are similar to situations they may encounter on the job). Behavioural interviews are quite high in reliability because past behaviour is the best predictor of future job performance (Russell, 1999).

Personality Inventories are another tool used in selection processes. They measure personality ...

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Personality Inventories are another tool used in selection processes. They measure personality characteristics of applicants in relation to future job performance. Personality tests typically measure five major dimensions known as the ‘Big Five’- extraversion, adjustment, agreeableness, conscientiousness and inquisitiveness (Barrick & Mount, 1991). These traits are usually low in validity and generalisability however; conscientiousness is one of the few factors that display any validity across a number of job categories. Many employers rate this trait as one of the most important characteristics they look for employees (Behling, 1998). People with conscientiousness show more stamina at work, which is helpful in many occupations when there is a need to work many hours. Conscientiousness is a good predictor when teamed with tests of mental ability because there is a stronger relationship between this trait and performance when ability is high (Wright, Kacmar et al., 1995). There are other contexts where the other traits relate to job performance such as extroversion and agreeableness seem to be related when it comes to sales or management roles especially team environments. It is noteworthy to say that high validity is found on these traits when scores are taken from other people. This is due to the fact that applicants are able to fake their responses to personality items depending what the job is looking for.

Assessment Centres are becoming an increasingly popular form of personnel selection for companies. The term is used to describe a wide variety of specific selection programs that employ multiple selection methods to rate either applicants on their work potential (Di Cieri & Kramer, 2003). Assessment centres have been haunted by lack of validity due to the confusion about constructs being measured, rating errors and participant inconsistencies in behaviour across exercises (Arthur & Tubre, 1999). However, features that can improve assessment centre are; having only a few conceptually distinct constructs, concrete job-related constructs, cross-exercise assessment and several psychology trained assessor (Lievens, 1998). Because of these multiple selection methods, their validity can be quite high. Research has indicated that one of the best combinations of selection methods includes work-sample tests with a highly structures interview and a measure of general cognitive ability (Schmidt & Hunter, 1998).

An emerging topic of selection methods is Team Member Selection. Companies are becoming more aware of the importance team-based structures are to their organisations and how important it is to employ a team player (Howard, 1995). Individual characteristics and types of tasks interact within a team to influence the team performance and effectiveness. Team studies have shown that team decision-making accuracy over time tends to be best when all members are high in conscientiousness and cognitive ability (Le Pine et al 1997). Barrick et al (1998) found that conscientiousness, cognitive ability and extraversion all predicted overall team performance.

The selection models discussed above are all applications that have been introduced to help companies select the right candidate for their organisation. However, it is the belief that many employers do not have selection procedures in place or have not wished to update and adapt their processes for the changing needs of their companies. The aim in this study is to look at the current Human Resource selection strategies of three companies and compare the selection methods they use with the methods discussed above.

METHOD

Three current Human Resource Managers participated in this study from three separate companies. The companies were from Personal Services (20 employees), Recruitment Services (1000-10 000 employees) and Transport and Storage (more than 10 000 employees), [ Companies are known for this report as A company, B company and C company respectively]. They were informed of the experiment through an information sheet and were instructed to fill out a consent form (See Appendix A). The participants were individually interviewed through a set of pre determined questions based on their companies personnel selection procedures. (See Appendix B- Raw Interview Data). Notes were taken down when the interviewee was asked open questions. The final data on all three interviews was collated and reported.

RESULTS

Findings for A Company (20 employees).

Adopted behavioural based interviewing strategy assessing work ethics and attitudes. Focus on matching applicant to culture and not to job. All employees are given a three-month probation where they have the opportunity to ‘self-select’ themselves out of the job due to demands, pressures and long hours. Within the past two years four secretaries have self-selected out during their first three months.

Findings for B Company (1000 to 10000 employees).

Currently no selection strategy- in design stages (looking into employing a team of specialist internal recruiters who will take full control of the selection process). Previously used Line Managers to interview based on Company recommendations. Outcome- High turn over rate as Line managers were recruiting staff based on their suitability in the team and not on the company’s standard KSAs.

Findings for C Company (Over 10 000 employees)

Company has an Assessment centre that provides testing on a range of instruments including role-plays; group based behavioural interviews, psychometric tests knowledge examinations. A panel interview is also conducted using a Manager, employee on same grade as advertised position and an independent resource. There are five questions- two situational questions, a role-play, process questions and policy questions. A person is selected on results of the criteria. If there is a tie then a competitive cull begins based on presentation, experience and resume. This company also has an Appeals tribunal for unsuccessful applicants to ensure that all policies in relation to the selection process have been adhered to.

DISCUSSION

Selecting the right people for organizations is an important area for companies in today’s economic climate (Kraut & Korman, 1999). From the results it can be seen how selection processes have become a normal part of everyday company operations as all three companies either have adopted some strategies or at least have had some exposure to it.

Although some strategies that have been implemented by these companies are quite good such as, assessment centre evaluations and personality inventories. Most of the companies have fallen into some bad selection strategies. By taking a closer look at each company’s selection process it should become clearer as to what areas their weaknesses lie in?

A Company’s selection process is very basic. They have no strong reliability in their selection activities. By focusing on solely a behavioural-based interview strategy, which does nothing, more than assess their attitudes they are limiting themselves to inconsistent measurable skills. This is evident in their strategy of matching applicants to the culture rather than on the job skills. The first recommendation that this company should adopt is conducting a Job Analysis (SIOP, 2002) on all positions so they have concrete measurable skills to focus on in the interview.

This company is experiencing a large turnover rate for such a small company. This could be due to the fact that the manager sells the job very negatively by advertising that they work long hours and there is a lot of pressure. This company even goes further by giving the candidate the option to self-select out of the company within the first three months. Not only would this be time consuming and costly but this may have an adverse impact in the current employees of the company.

The second recommendation for this company is to adopt a personality inventory measuring conscientiousness to see how keen and committed the individual is to start in this company. As previous research suggests conscientiousness is one of the few factors that display any validity across a number of job categories and that many employers rate this trait as one of the most important characteristics they look for employees (Behling, 1998). People with conscientiousness show more stamina at work, which is helpful in many occupations when there is a need to work many hours. By adopting this strategy there would be a more valid construct in which to base a decision rather than giving out costly trial periods with no guarantees.

The final recommendation for this company is to conduct a panel interview. Currently the manager is the only person who interviews candidates. This has a very strong potential for bias to creep in. As Conway et al (1995) suggested by using panel interviews in selection it dramatically decreases the amount of bias as each colleague acts as a check on the other.

B Company, although going through a restructure of their recruitment processes, are outsourcing their internal recruitment to professionals. Lievens (1998) believed that by using psychology trained assessors in selection procedures could improve the strike rate of selecting the right people. As this company is a sales oriented company they could do with a Personality inventory that focuses on key traits associated with sales, these being extraversion and agreeableness (Wright et al, 1995).

The sales environment within this industry seems to be team oriented so an approach that focuses on involving team members in the selection phase would be beneficial. Le Pine et al (1997) believed that teams where members all had higher levels of conscientiousness and cognitive ability worked and performed better.

The bias effect in their old system of line managers interviewing potential team members was as they pointed out an ‘error of judgement’. However, if the Line Managers were trained in effective interviewing skills and used highly standardised situational interviews where applicants responded to critical work incidents then rating biases would be less susceptible (Katakoa et al 1997).

C Company has the best selection practice of all three companies. It models many selection methods used in assessment centre appraisals. Their selection process is streamlined and runs accordingly to the basics of assessment centres namely role-playing, behaviour based interviews and work related constructs all of which have been mentioned in many other studies (Arthur & Tubre, 1999; Schmidt & Hunter, 1998). The assessment centre process is by far the most comprehensive selection process being used in all three companies. Not only does it use multiple selection methods, which is an indication of high validity but satisfies all the five standards of reliability, validity, generalisability, utility and legality (Di Cieri & Kramer, 2003). The legality aspect is covered quite comprehensively in this company’s selection process. They have an appeals tribunal for unsuccessful candidates to lodge a claim of unfairness.

All three companies have incorporated aspects of selection methods mentioned earlier in the paper. By far the most successful and comprehensive selection system identified in this study is the assessment centre method. As the needs of companies change therefore so should companies selection strategies.

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