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Kuder-Richardson Formula
Used for test with dichotomous items (yes-no
true-false)
Used when human judgment of performance
is involved in the selection process
Refers to the degree of agreement between 2
or more raters
The higher the reliability of a selection test
the better. Reliability should be 0.70 or
higher
Reliability can be affected by many factors
If a selection test is not reliable, it is useless
as a tool for selecting individuals
Definition: The degree to which inferences
from scores on tests or assessments are
justified by the evidence
Common Ways to Measure
Content Validity
Criterion Validity
Construct Validity
The extent to which test items sample the
content that they are supposed to measure
0.00 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50
0.10 0.58 0.57 0.56 0.55 0.54 0.53 0.53 0.52 0.51 0.51 0.50
0.20 0.67 0.64 0.61 0.59 0.58 0.56 0.55 0.54 0.53 0.52 0.51
0.30 0.74 0.71 0.67 0.64 0.62 0.60 0.58 0.56 0.54 0.52 0.51
0.40 0.82 0.78 0.73 0.69 0.66 0.63 0.61 0.58 0.56 0.53 0.52
0.50 0.88 0.84 0.76 0.74 0.70 0.67 0.63 0.60 0.57 0.54 0.52
0.60 0.94 0.90 0.84 0.79 0.75 0.70 0.66 0.62 0.59 0.54 0.52
0.70 0.98 0.95 0.90 0.85 0.80 0.75 0.70 0.65 0.60 0.55 0.53
0.80 1.0 0.99 0.95 0.90 0.85 0.80 0.73 0.67 0.61 0.55 0.53
0.90 1.0 1.0 0.99 0.97 0.92 0.86 0.78 0.70 0.62 0.56 0.53
Proportion of Correct Decisions With Test
(Correct rejections + correct acceptances) ÷ Total
employees
Quadrant II Quadrant IV Quadrants I+II+III+IV
80% r 0.05 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 0.95
0.00 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80
0.10 0.85 0.85 0.84 0.83 0.83 0.82 0.82 0.81 0.81 0.81 0.80
0.20 0.90 0.89 0.87 0.86 0.85 0.84 0.84 0.83 0.82 0.81 0.81
0.30 0.94 0.92 0.90 0.89 0.88 0.87 0.86 0.84 0.83 0.82 0.81
0.40 0.96 0.95 0.93 0.92 0.90 0.89 0.88 0.86 0.85 0.83 0.82
0.50 0.98 0.97 0.96 0.94 0.93 0.91 0.90 0.88 0.86 0.84 0.82
0.60 0.99 0.99 0.98 0.96 0.95 0.94 0.92 0.90 0.87 0.84 0.83
0.70 1.0 1.0 0.99 0.98 0.97 0.96 0.94 0.92 0.89 0.85 0.83
0.80 1.0 1.0 1.0 1.0 0.99 0.98 0.96 0.94 0.91 0.87 0.84
0.90 1.0 1.0 1.0 1.0 1.0 1.0 0.99 0.97 0.94 0.88 0.84
Components:
We will hire 250 people
The average person in this position stays 4 years
The validity coefficient is 0.30
The average annual salary for the position is $70,000
We have 500 applicants for 250 openings.
Our utility would be:
(250 x 4 x 0.30 x $28,000 x 0.80) – (500 x 15) =
$6,720,000 - $7,500 = $6,712,500
Components:
We will hire 250 people
The average person in this position stays 4 years
The validity coefficient is 0.40
The average annual salary for the position is $70,000
We have 500 applicants for 200 openings.
Our utility would be:
(250 x 4 x 0.40 x $28,000 x 0.80) – (500 x 10) =
$8,960,000 - $5,000 = $8,955,000
Test Utility
80% r 0.05 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 0.95
0.00 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80 0.80
0.10 0.85 0.85 0.84 0.83 0.83 0.82 0.82 0.81 0.81 0.81 0.80
0.20 0.90 0.89 0.87 0.86 0.85 0.84 0.84 0.83 0.82 0.81 0.81
0.30 0.94 0.92 0.90 0.89 0.88 0.87 0.86 0.84 0.83 0.82 0.81
0.40 0.96 0.95 0.93 0.92 0.90 0.89 0.88 0.86 0.85 0.83 0.82
0.50 0.98 0.97 0.96 0.94 0.93 0.91 0.90 0.88 0.86 0.84 0.82
0.60 0.99 0.99 0.98 0.96 0.95 0.94 0.92 0.90 0.87 0.84 0.83
0.70 1.0 1.0 0.99 0.98 0.97 0.96 0.94 0.92 0.89 0.85 0.83
0.80 1.0 1.0 1.0 1.0 0.99 0.98 0.96 0.94 0.91 0.87 0.84
0.90 1.0 1.0 1.0 1.0 1.0 1.0 0.99 0.97 0.94 0.88 0.84
Components:
We will hire 250 people
The average person in this position stays 4 years
The validity coefficient is 0.11
The average annual salary for the position is $70,000
We have 500 applicants for 250 openings.
Our utility would be:
(250 x 4 x 0.11 x $28,000 x 0.80) – (500 x 25) =
$2,464,000 - $12,500 = $2,451,500
Components:
We will hire 200 people
The average person in this position stays 4 years
The observed validity coefficient is 0.34
The average annual salary for the position is $60,000
We have 500 applicants for 200 openings.
Our utility would be:
(250 x 4 x 0.34 x $28,000 x 0.80) – (500 x 15) =
$7,616,000 - $12,500 = $7,603,500
Test Utility
D 0 – 418 56%
A compromise between the top-down and
passing scores approach.
It takes into account that tests are not
perfectly reliable (error).
Compromise between top-down selection and
passing scores
Based on the concept of the standard error of
measurement
To compute you need the standard deviation and
reliability of the test
Example 2
= 9.1 * 0.447 Reliability = 0.90
Standard deviation =
12.8
= 4.07
Workbook Exercise 6.4
1. Standard Error 3.06
McCoy Crane
Robinette Carmichael
4. Hire using sliding band
Carmichael McCoy
Ross Crane
Carmichael McCoy
Ross Crane
Applicant Sex Score Band 1 Band 2 Band 3 Band 4 Band 5
McCoy m 97 x x hire hired hired
Crane m 95 x x x x hire
Robinette m 94 x x x x x
Schiff m 94 x x x x hired
Carmichael f 91 x hire hired hired x
Carver m 89 x x
Ross f 89 hire hired
Cutter m 88
Kincaid f 87
Cabot f 86
Stone m 86
Lewin f 85 7.91 1 .85
Shore m 83
Branch m 80 = 7.91 * .387
Sack m 78 = 3.06
Band = 3.06 * 1.96 = 6
Shouldthe top scores on a test always get
the job?
Applied
Case Study: Thomas A. Edison’s
Employment Test
Diversity Efforts
To increase diversity, it is often legal to consider race or
gender as a factor in selecting employees. Although legal,
do you think it is ethical that race or gender be a factor in
making an employment decision? How much of a role
should it play?
Is it ethical to hire a person with a lower test score
because he or she seems to be a better personality fit for
an organization?
If an I/O psychologist is employed by a company that
appears to be discriminating against Hispanics, is it ethical
for her to stay with the company? What ethical obligations
does she have?