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Applied Psychology in Applied Psychology in Human Resource Human Resource
Management Management seventh editionseventh edition
Cascio & AguinisCascio & Aguinis
Power Point Slides developed by Ms. Elizabeth Freeman
University of South Carolina Upstate
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Chapter 8 Chapter 8
Fairness Fairness in in
Employment Employment DecisionsDecisions
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To this point, HRM decisions depend upon
LawsSystem utility (cost & benefit)
ProcessesTests –
ReliabilityValidity
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What does fairness mean?
Treating all people
alike, justly, equitably
Having no adverse impact on any group of individuals
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How do you determine fairness?
By analyzing the differential validity and predictive bias among groups
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Must keep in mind that HRM decisions are based on individual differences measures.
Therefore, HRM decisions will have some discriminatory effects.
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Fairness in employment decisions means then that HRM decisions make justifiable and wise discriminatory decisions.
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Resources for guiding HRM fairness
Uniform Guidelines on Employee Selection Procedures (1978)
Standards for Educational and Psychological Testing (1999)
Principles for the Validation and Use of Personnel Selection Procedures (2003)
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Resources for guiding HRM fairness
Computer program to explore decision
making scenarios
www.cudenver.edu/~haguinis/mmr
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Legal precedence guiding HRM fairness
Ninth Circuit Court of AppealsOfficers for Justice v. Civil Service Commission of the City and County of San Francisco, 1992
Seventh Circuit Court of AppealsChicago Firefighters Local 2 v. City of Chicago, 2001
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Fairness challenges
number subjects per group unbiased criterioncomprehension of differences
differential validity differential prediction
value systemssocietal costs
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Fairness research focuses
1. Efficacy of selection decisions analysis of differential validity within subgroups
2. Accuracy of performance
predictions analysis of mean job performances and differential validity
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Basic Fairness Procedure
Critical Definitions
1. Adverse impact
when HRM selections for members of subgroups are less than 4/5 or 80% of group with highest selection rate
may exist fairly, may exist unfairly
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Basic Fairness Procedure
Critical Definitions
2. Differential Validity when significant difference exists
between two subgroups’ validity coefficients
when correlations in one or both groups are significant
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Basic Fairness Procedure
Critical Definitions
3. Single Group Validity when no significant difference exists
between two subgroups’ validity coefficients
when significant difference does exist for one group’s predictor – criterion relationship
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Basic Fairness Procedure
1. Divide data by group & subgroup,
2. Determine predictor & criterion correlation
3. Analyze fairness implications
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Basic Fairness Procedure
1. Divide data by group & subgroup, Example
Managerial Jobs by AgeRaceEthnicityGender
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Basic Fairness Procedure
2. Determine predictor & criterion correlation
For all managerial jobs usingPredictor = Test ScoreCriterion = Performance Rating
Plot the relationship by gender
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Basic Fairness Procedure
3. Analyze fairness implications for a. Positive validity b. Zero validityc. Positive validity but adverse
impactd. Positive validity combined groups,
invalid for separate groups e. Equal validity, unequal predictor
meansf. Equal validity, unequal criterion
meansg. Equal predictor means, valid for
nonminority only h. Unequal criterion means and
validity only for nonminority
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Basic Fairness Procedure
3. Analyze fairness implications
a. Positive validity
Predictor – criterion relationship is the same for both subgroups and elliptical in shape
Conclude fairness, validity, and legality supported
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Basic Fairness Procedure
3. Analyze fairness implications b. Zero validity Predictor – criterion relationship is the same for both subgroups but circular in shape
Conclude that no differential validity, no point to consider predictor
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Basic Fairness Procedure
3. Analyze fairness implications
c. Positive validity but adverse impact
Predictor – criterion relationship shows differences per subgroups and elliptical in shape
Conclude valid and legal adverse impact but only if criterion necessity proven
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Basic Fairness Procedure
3. Analyze fairness implications
d. Positive validity combined groups, invalid for separate groups
Predictor – criterion relationship is high for entire group but low or zero for either subgroup and elliptical in shape
Conclude unfair, invalid, illegal, and discriminatory
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Basic Fairness Procedure
3. Analyze fairness implications
e. Equal validity, unequal predictor means
Predictor – criterion relationship is similar for both subgroups, elliptical in shape, but predictor means differ
Conclude with successful performance as foundation the use of different cut scores for decisions is fair, valid, and legal most but not all of the time
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Basic Fairness Procedure
3. Analyze fairness implications
f. Equal validity, unequal criterion means
Predictor – criterion relationship is similarfor both subgroups, elliptical in shape, but criterion means differ
Conclude fairness questionable, validity questionable, but no adverse impact
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Basic Fairness Procedure
3. Analyze fairness implications
g. Equal predictor means, valid for nonminority only
Predictor – criterion relationship differs for both subgroups, shapes differ, but valid for nonminority only
Conclude fairness questionable, validity limited, no adverse impact, but definite social implications
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Basic Fairness Procedure
3. Analyze fairness implications
h. Unequal criterion means, unequal validity, only for nonminority group
Predictor – criterion relationship differs for both subgroups, shapes differ, but valid for nonminority only
Conclude fairness questionable, validity limited, some adverse impact minorities, definite social implications
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Basic Fairness Summary
Perfect fairness may not be possible when HRM decisions applied to heterogeneous groups.
Implementing different HRM decision systems may be empirically more fair but may be perceived with suspicion and lose any credibility.
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Basic Fairness Summary
Additional Differential Validity Issues
Very few well-controlled studies Samples sizes existing research too small Predictors not always relevant to criterion Lack of unbiased, relevant, reliable criteria Limited number of cross-validated studies
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Assessing Differential Prediction & Moderator Variables
To completely study and understand fairness, differential predictions for subgroups must be considered
Differential predictions focus on the slope of the differential validity coefficients.
Slopes are best understood by considering the regression line (line of best fit) between the predictor and criterion variances
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Assessing Differential Prediction & Moderator Variables
Regression line accuracy can be improved by considering the sub-groupings as additional variables or moderators
Considering multiple moderators brings in the concept of Moderated Multiple Regressions (MMR) or R²
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Assessing Differential Prediction & Moderator Variables
Interesting evidence for MMR research
Differences over predict job performance
Cognitive DifferencesPhysical Ability differencesPersonality differences
For HRM, decisions would tend to hire more minorities rather than fewer
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Assessing Differential Prediction & Moderator Variables
Cognitive Differences Minorities tended to do less well on job than test scores predicted for Dutch, African-American, Hispanics
Physical Ability Differences Gender differences existed but varied by occupation considered
Personality Differences Gender differences found by occupation
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Assessing Differential Prediction & Moderator Variables
Problem to consider
small sample sizes for minority groups
increase chance that procedure deemed unfair when procedure is fair
decrease statistical power
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Assessing Differential Prediction & Moderator Variables
To avoid low MMR statistical power, carefully plan a validation study to include technical feasibility & credible results
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To reduce adverse impact
1. Improve minority recruiting strategy2. Use cognitive abilities in combination with noncognitive predictors 3. Use specific cognitive abilities measures4. Use differential weighting for the various
criterion facets5. Use alternate modes of presenting test
stimuli6. Enhance face validity7. Implement test-score banding to select
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Test-score banding considers distributive justice for appropriateness of HRM testing decisions
HRM tries to maximize profitability maximizing profits may lead to adverse impact
values based HRM may lead to decreased profitability
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Test-score banding
Sliding-band method – considers range of test scores as equivalent given imperfect reliabilities for tests
maximizes both utility and social objectives
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Test-score banding
Criterion-referenced banding methodconsiders range of test scores
(predictors) and range of performance scores (criteria)
also maximizes utility and social objectives
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Criterion-referenced banding strengths
Use of validity evidence Bandwidths are widerInclusion relevant criterion dataUse of reliability information
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Criterion-referenced banding weaknesses
1. Possible legal issues2. Possible violation scientific values 3. Possible violation intellectual values
4. Emotions associated with Affirmative Action Programs 5. Conflict between goals of research
and organizations 6. Measurement objections
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Social and Interpersonal Context of Employment Testing
Fairness requires professionalism, courtesy, compassion, & respect Perceived unfairness may lead to
negative organization impressionlitigation challenges
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Social and Interpersonal Context of Employment Testing
Fairness perceptions include (1) distributive justice - outcomes
(2) procedural justice – processes to reach decisions
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Public Policy
While not always popular, tests and measurements serve public in several ways
(1) diagnostic – to implement remedial programs
(2) assessing candidate qualifications
(3) protection from false credentials
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Public Policy
Each generation must reconcile the meaning of equal employment opportunities Policies are not for or against tests and measurements, policies are about how tests & measurements are used
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