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1© SHL 2012November 19, 2013
Verifiable business results in HR consultancy
Prepared for “Zilele Biz” [2013-11-13]
2© SHL 2012November 19, 2013
Making HR measurement strategic
• It does not require claims, but actions
• Requires a melange of Financial and Technical reasoning and
expertise
◦ Financial: because any strategic metric finally should be resolved
to a cost-benefit analysis
◦ Technical: because measurement is impossible without
understanding the construct measured
2
3© SHL 2012November 19, 2013
Established HR measurement models on ...
• e.g. Cascio & Boudreau (2008)
• We can now measure very well Cost & Gain for:
◦ Absenteeism
◦ Employee separations
◦ Employee Health & Welfare
◦ Employee Attitudes, e.g. Engagement
◦ Talent Investment
◦ Development programs
◦ Selection & Staffing
3
4© SHL 2012November 19, 2013
An example: Efficiency of personnel selection
• What methods can and will be efficient?
• When are tests useful?
• Can I assess how many misdecisions (mishires) I will do with a
specific selection array?
• Can I improve on this? When is it worth it?
4
5© SHL 2012November 19, 2013
Terminology
• Base Rate (success rate)
◦ The proportion of current job incumbents recruited without the use
of tests who perform well in the position
• Selection Ratio
◦ Proportion of applicants who are selected
• Test Validity
◦ Relationship between test scores and job performance
5
6© SHL 2012November 19, 2013
Terminology clarified in an example
• 100 applicants for 20 customer service positions
◦ (Selection ratio is 0.20)
• 60 out of these 100 applicants (60%) are likely to perform well
◦ (Base rate of 0.60)
• If applicants were selected at random we would expect:
◦ 12 are likely to be successful in the job (60% of 20 selected)
◦ 8 are likely to be unsuccessful (40% of 20 selected)
6
7© SHL 2012November 19, 2013
The Taylor Russell table
7
VALIDITY
SELECTION RATIO
.05 .20 .40 .60 .80 .95
.0 .60 .60 .60 .60 .60 .60
.1 .68 .65 .64 .63 .61 .60
.2 .75 .71 .67 .65 .66 .61
.3 .82 .76 .71 .68 .64 .61
.4 .88 .81 .75 .70 .66 .62
.5 .93 .86 .79 .73 .67 .62
.6 .96 .90 .83 .76 .69 .63
.7 .99 .94 .87 .80 .71 .63
.8 1.00 .98 .92 .83 .72 .63
.9 1.00 1.00 .97 .88 .74 .63
1.00 1.00 1.00 1.00 1.00 .75 .63
Estimated ratio of applicants hired who can be expected to be successful on the job.
This table is based on a current random selection success rate of 60%
LOW HIGH
8© SHL 2012November 19, 2013
Quality of selection measures (Robertson and Smith, 2001)
8
+1 PERFECT PREDICTION
.63
.60
.54
.51
.51
.41
.40
.35
.26
.18
.10
.02
0
-0.01
Ability and Structured Interview
Ability and Work sample
Work Sample Tests
Structured Interviews
Ability Tests
Job knowledge Tests
Personality Tests
Biodata
References
Years Job Experience
Years Education
Graphology
RANDOM PREDICTION
Age
9© SHL 2012November 19, 2013
How can I improve?
9
HIGH
LOW
LOW
• Validity
• Current success rate
• Selection ratio
10© SHL 2012November 19, 2013
When can I not improve (or it’s not worth it)
• There are very small numbers of applicants
• Current success rates are high
• Individual differences in job performance are small
• Job success is not critical, failures can be tolerated
• Anybody can prove successful
10
11© SHL 2012November 19, 2013
Questions?