APPLIED PSYCHOLOGY IN HUMAN RESOURCE MANAGEMENT
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1 Seventh Edition APPLIED PSYCHOLOGY IN HUMAN RESOURCE MANAGEMENT Wayne F. Cascio The Business School University of Colorado Denver Herman Aguinis Kelley School of Business Indiana University Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
2 CONTENTS Preface xvii Chapter 1 Organizations, Work, and Applied Psychology 1 At a Glance 1 The Pervasiveness of Organizations 1 Differences in Jobs 2 Differences in Performance 2 A Utopian Ideal 3 Point of View 3 Personnel Psychology in Perspective 3 The Changing Nature of Product and Service Markets 5 Effects of Technology on Organizations and People 6 Changes in the Structure and Design of Organizations 6 The Changing Role of the Manager 7 The Empowered Worker No Passing Fad 8 Implications for Organizations and Their People 9 / Plan of the Book 10 - Evidence-Based Implications for Practice 12 Discussion Questions 12 Chapter 2 The Law and Human Resource Management 13 At a Glance 13 The Legal System 14 Unfair Discrimination: What Is It? 16 Legal Framework for Civil Rights Requirements 17 The U.S. Constitution Thirteenth and Fourteenth Amendments 18 The Civil Rights Acts of 1866 and Equal Pay for Equal Work Regardless of Sex 18 Equal Pay Act of Equal Pay for Jobs of Comparable Worth 19 Equal Employment Opportunity 19 Title VII of the Civil Rights Act of Nondiscrimination on the Basis of Race, Color, Religion, Sex, or National Origin 20 Apprenticeship Programs, Retaliation, and Employment Advertising 20 Suspension of Government Contracts and Back-Pay Awards 21 Bona Fide Occupational Qualifications 21 Seniority Systems 21 Preemployment Inquiries 21 Testing 21 iii
3 iv Contents Preferential Treatment 21 Veterans Preference Rights 21 National Security 22 Age Discrimination in Employment Act of The Immigration Reform and Control Act of The Americans with Disabilities Act (ADA) of Enforcement 24 The Civil Rights Act of Monetary Damages and Jury Trials 25 Adverse Impact (Unintentional Discrimination) Cases 25 Protection in Foreign Countries 25 Racial Harassment 26 Challenges to Consent Decrees 26 Mixed-Motive Cases 26 Seniority Systems 26 Race-Norming and Affirmative Action 26 Extension to U.S. Senate and Appointed Officials 26 The Family and Medical Leave Act of Executive Orders 11246, 11375, and Enforcement of Executive Orders 27 The Rehabilitation Act of The Vietnam Era Veterans Readjustment Act of Uniformed Services Employment and Reemployment Rights Act of Enforcement of the Laws Regulatory Agencies 28 State Fair Employment-Practices Commissions 28 Equal Employment Opportunity Commission 28 The Complaint Process 29 Office of Federal Contract Compliance Programs 29 Goals and Timetables 30 Employment Case Law General Principles 30 Testing 30 Personal History 32 Sex Discrimination 32 Preventive Actions by Employers 34 Age Discrimination 34 "English Only" Rules National Origin Discrimination? 35 Seniority 35 Preferential Selection 36 Evidence-Based Implications for Practice 37 Discussion Questions 38
4 Contents Chapter 3 People, Decisions, and the Systems Approach 39 At a Glance 39 Utility Theory A Way of Thinking 39 Organizations as Systems 41 A Systems View of the Employment Process 43 Job Analysis and Job Evaluation 43 Workforce Planning 45 Recruitment 45 Initial Screening 46 Selection 46 Training and Development 47 Performance Management 48 Organizational Exit 48 Evidence-Based Implications for Practice 49 Discussion Questions 50 Chapter 4 Criteria: Concepts, Measurement, and Evaluation 51 At a Glance 51 Definition 52 Job Performance as a Criterion 54 Dimensionality of Criteria 54 Static Dimensionality 54 Dynamic or Temporal Dimensionality 56 Individual Dimensionality 58 Challenges in Criterion Development 59 Challenge #1: Job Performance (Un)Reliability 59 Challenge #2: Job Performance Observation 60 Challenge #3: Dimensionality of Job Performance 61 Performance and Situational Characteristics 61 Environmental and Organizational Characteristics 62 Environmental Safety 62 Lifespace Variables 62 Job and Location 62 Extraindividual Differences and Sales Performance 63 Leadership 63 Steps in Criterion Development 63 Evaluating Criteria 63 Relevance 64 Sensitivity or Discriminability 64 Practicality 64 Criterion Deficiency 65 Criterion Contamination 65 Bias Due to Knowledge of Predictor Information 66
5 vi Contents Bias Due to Group Membership 66 Bias in Ratings 66 Criterion Equivalence 67 Composite Criterion Versus Multiple Criteria 67 Composite Criterion 67 Multiple Criteria 68 Differing Assumptions 68 Resolving the Dilemma 69 Research Design and Criterion Theory 69 Evidence-Based Implications for Practice 71 Discussion Questions 72 Chapter 5 Performance Management 73 At a Glance 73 Purposes Served 74 Realities of Performance Management Systems 75 Barriers to Implementing Effective Performance Management Systems 75 Organizational Barriers 75 Political Barriers 76 Interpersonal Barriers 76 Fundamental Requirements of Successful Performance Management Systems 76 Behavioral Basis for Performance Appraisal 77 Who Shall Rate? 79 Immediate Supervisor 79 Peers 79 Subordinates 80 Self 81 Clients Served 82 Appraising Performance: Individual Versus Group Tasks 82 Agreement and Equivalence of Ratings Across Sources 83 Judgmental Biases in Rating 85 Leniency and Severity 85 Central Tendency 86 Halo 86 Types of Performance Measures 87 Objective Measures 87 Subjective Measures 87 Rating Systems: Relative and Absolute 88 Relative Rating Systems (Employee Comparisons) 88 Absolute Rating Systems 89 Summary Comments on Rating Formats and Rating Process 95
6 Contents vii Factors Affecting Subjective Appraisals 96 Evaluating the Performance of Teams 99 Rater Training 101 The Social and Interpersonal Context of Performance Management Systems 102 Performance Feedback: Appraisal and Goal-Setting Interviews 104 Communicate Frequently 105 Get Training in Appraisal 105 Judge Your Own Performance First 105 Encourage Subordinate Preparation 106 Use "Priming" Information 106 Warm Up and Encourage Participation 106 Judge Performance, Not Personality or Self-Concept 106 Be Specific 106 Be an Active Listener 107 Avoid Destructive Criticism and Threats to the Employee's Ego 107 Set Mutually Agreeable and Formal Goals 107 Continue to Communicate and Assess Progress Toward Goals Regularly 108 Make Organizational Rewards Contingent on Performance 108 Evidence-Based Implications for Practice 108 Discussion Questions 109 Chapter 6 Measuring and Interpreting Individual Differences 110 At a Glance 110 What Is Measurement? 111 Scales of Measurement 111 Nominal Scales 112 Ordinal Scales 112 Interval Scales 113 Ratio Scales 114 Scales Used in Psychological Measurement 114 Consideration of Social Utility in the Evaluation of Psychological Measurement 115 Selecting and Creating the Right Measure 115 Steps for Selecting and Creating Tests 116 Selecting an Appropriate Test: Test-Classification Methods 118 Further Considerations in Selecting a Test 120 Reliability as Consistency 121 Estimation of Reliability 121 Test-Retest 122 Parallel (or Alternate) Forms 123
7 viii Contents Internal Consistency 124 Stability and Equivalence 127 Interrater Reliability 128 Summary 129 Interpretation of Reliability 130 Range of Individual Differences 130 Difficulty of the Measurement Procedure 131 Size and Representativeness of Sample 131 Standard Error of Measurement 131 Scale Coarseness 132 Generalizability Theory 134 Interpreting the Results of Measurement Procedures 135 Evidence-Based Implications for Practice 138 Discussion Questions 138 Chapter 7 Validation and Use of Individual-Differences Measures 139 At a Glance 139 Relationship between Reliability and Validity 139 Evidence of Validity 141 Content-Related Evidence 142 Criterion-Related Evidence 145 Predictive Studies 146 Concurrent Studies 148 Requirements of Criterion Measures in Predictive and Concurrent Studies 149 Factors Affecting the Size of Obtained Validity Coefficients 149 Range Enhancement 149 Range Restriction 150 Position in the Employment Process 153 Form of the Predictor-Criterion Relationship 153 Construct-Related Evidence 153 Illustration 156 Cross-Validation 157 Gathering Validity Evidence When Local Validation Is Not Feasible 158 Synthetic Validity 159 Test Transportability 159 Validity Generalization 160 Empirical Bayes Analysis 165 Application of Alternative Validation Strategies: Illustration 165 Evidence-Based Implications for Practice 166 Discussion Questions 166
8 Contents ix Chapter 8 Fairness in Employment Decisions 167 At a Glance 167 Assessing Differential Validity 168 Differential Validity and Adverse Impact 169 Differential Validity: The Evidence 173 Assessing Differential Prediction and Moderator Variables 174 Differential Prediction: The Evidence 176 Problems in Testing for Differential Prediction 177 Suggestions for Improving the Accuracy of Slope-based Differential Prediction Assessment 179 Further Considerations Regarding Adverse Impact, Differential Validity, and Differential Prediction 180 Minimizing Adverse Impact Through Test-Score Banding 184 Fairness and the Interpersonal Context of Employment Testing 189 Fair Employment and Public Policy 190 Evidence-Based Implications for Practice 191 Discussion Questions 192 Chapter 9 Analyzing Jobs and Work 193 At a Glance 193 Terminology 195 Aligning Method with Purpose 196 Choices 196' Defining the Job 197 Job Specifications 197 Establishing Minimum Qualifications 199 Reliability and Validity of Job-Analysis Information 200 Obtaining Job Information 201 Direct Observation and Job Performance 202 Interview 205 SME Panels 205 Questionnaires 206 The Position Analysis Questionnaire 206 Fleishman Job Analysis Survey (F-JAS) 208 Critical Incidents 209 Other Sources of Job Information and Job-Analysis Methods 210 The Job Analysis Wizard 211 Incorporating Personality Dimensions into Job Analysis 211 Strategic or Future-Oriented Job Analyses 212 Competency Models 213
9 Contents Interrelationships among Jobs, Occupational Groups, and Business Segments 213 Occupational Information From the Dictionary of Occupational Titles to the O*Net 214 Evidence-Based Implications for Practice 216 Discussion Questions 216 Chapter 10 Strategic Workforce Planning 217 At a Glance 217 What Is Workforce Planning? 218 Strategic Business and Workforce Plans 219 An Alternative Approach 220 Payoffs from Strategic Planning 221 Relationship of HR Strategy to Business Strategy 222 Talent Inventory 224 Information Type 224 Uses 225 Forecasting Workforce Supply and Demand 225 External Workforce Supply 225 Internal Workforce Supply 226 Leadership-Succession Planning 226 Chief Executive Officer (CEO) Succession 228 Workforce Demand 229 Pivotal Jobs 229 Assessing Future Workforce Demand 230 How Accurate Must Demand Forecasts Be? 230 Integrating Supply and Demand Forecasts 230 Matching Forecast Results to Action Plans 230 Control and Evaluation 232 Monitoring Performance 232 Identifying an Appropriate Strategy for Evaluation 233 Responsibility for Workforce Planning 233 Evidence-Based Implications for Practice 234 Discussion Questions 234 Chapter 11 Recruitment 235 At a Glance 235 Recruitment Planning 237 Staffing Requirements and Cost Analyses 239 Source Analysis 241 Operations 242 External Sources for Recruiting Applicants 242 Managing Recruiting Operations 245
10 Contents xi Measurement, Evaluation, and Control 247 Job Search from the Applicant's Perspective 248 Realistic Job Previews 249 Evidence-Based Implications for Practice 252 Discussion Questions 252 Chapter 12 Selection Methods: Part I 253 At a Glance 253 Recommendations and Reference Checks 253 Personal History Data 255 Weighted Application Blanks (WABs) 256 Biographical Information Blanks (BIBs) 256 Response Distortion in Application Forms and Biographical Data 257 Validity of Application Forms and Biographical Data 259 Bias and Adverse Impact 260 What Do Biodata Mean? 260 Honesty Tests 261 Evaluation of Training and Experience 263 Computer-Based Screening 264 Drug Screening 265 Polygraph Tests 267 Employment Interviews 268 Response Distortion in the Interview 268 Reliability and Validity 269 Factors Affecting the Decision-Making Process 270 Social/Interpersonal Factors 270 Cognitive Factors 271 Individual Differences 273 Effects of Structure 275 Use of Alternative Media 278 Needed Improvements 278 Toward the Future: Virtual-Reality Screening (VRT) 280 Evidence-Based Implications for Practice 280 Discussion Questions 281 Chapter 13 Selection Methods: Part II 282 At a Glance 282 Criteria of Managerial Success 283 The Importance of Context 284 Instruments of Prediction 285 Cognitive Ability Tests 285 Objective Personality Inventories 287
11 xii Contents Leadership-Ability Tests 291 Projective Techniques 293 Motivation to Manage 293 Personal-History Data 297 Peer Assessment 297 Work Samples of Managerial Performance 298 Leaderless Group Discussion (LGD) 300 The In-Basket Test 300 The Business Game 302 Situational Judgment Tests (SJT) 302 Assessment Centers (AC) 303 Assessment Center: The Beginnings 304 Level and Purpose of Assessment 305 Duration and Size 305 Assessors and Their Training 306 Performance Feedback 307 Reliability of the Assessment Process 307 Validity 308 Fairness and Adverse Impact 309 Assessment Center Utility 309 Potential Problems 310 Combining Predictors 311 Evidence-Based Implications for Practice 313 Discussion Questions 314 Chapter 14 Decision Making for Selection 315 At a Glance 315 Personnel Selection in Perspective 315 Classical Approach to Personnel Selection 316 Efficiency of Linear Models in Job-Success Prediction 318 Unit Weighting 318 Suppressor Variables 319 Data-Combination Strategies 320 Effectiveness of Alternative Data-Combination Strategies 321 Alternative Prediction Models 322 Multiple-Regression Approach 322 Multiple-Cutoff Approach 323 Multiple-Hurdle Approach 326 Extending the Classical Validity Approach to Selection Decisions: Decision-Theory Approach 328 The Selection Ratio 328
12 Contents xiii The Base Rate 330 Utility Considerations 331 Eva I uation of the Decision-Theory Approach 331 Speaking the Language of Business: Utility Analysis 332 The Naylor-Shine Model 333 The Brogden-Cronbach-Gleser Model 334 Further Developments of the Brogden-Cronbach-Gleser Model 335 Application of the Brogden-Cronbach-Gleser Model and the Need to Scrutinize Utility Estimates 337 The Strategic Context of Personnel Selection 341 Evidence-Based Implications for Practice 342 Discussion Questions 342 Chapter 15 Training and Development: Considerations in Design 343 At a Glance 343 Training Design 345 Characteristics of Effective Training 345 Additional Determinants of Effective Training 346 Fundamental Requirements of Sound Training Practice 346 * Defining What Is to Be Learned 349 The Training and Development Subsystem 349 Assessing Training Needs 350 Organization Analysis 351 Demographic Analysis 351 Operations Analysis 351 Person Analysis 353 Individual Development Plans (IDPs) 353 Training Objectives 353 Creating an Optimal Environment for Training and Learning 354 Team Training 355 Theoretical Models to Guide Training and Development Efforts 357 Trainability and Individual Differences 357 Principles that Enhance Learning 358 Knowledge of Results (Feedback) 358 Transfer of Training 359 Self-Regulation to Maintain Changes in Behavior 360 Adaptive Guidance 361 Reinforcement 361 Practice 362 Active Practice 362 Overlearning 362
13 xiv Contents Length of the Practice Session 362 Motivation 363 Goal Setting 364 Behavior Modeling 365 Evidence-Based Implications for Practice 366 Discussion Questions 367 Chapter 16 Training and Development: Implementation and the Measurement of Outcomes 368 At a Glance 368 Computer-Based Training 370 Selection of Technique 371 Measuring Training and Development Outcomes 371 Why Measure Training Outcomes? 372 Essential Elements for Measuring Training Outcomes 372 Criteria 373 Additional Considerations in Measuring the Outcomes of Training 375 Strategies for Measuring the Outcomes of Training in Terms of Financial Impact 376 Influencing Managerial Decisions with Program-Evaluation Data 378 Classical Experimental Design 379 Design A 381 Design B 381 Design C 382 Design D 382 Limitations of Experimental Designs 384 Quasi-Experimental Designs 385 Design E 386 Design F 387 Design G 388 Design H 388 Statistical, Practical, and Theoretical Significance 389 Logical Analysis 390 Evidence-Based Implications for Practice 391 Discussion Questions 391 Chapter 17 International Dimensions of Applied Psychology 392 At a Glance 392 Globalization, Culture, and Psychological Measurement 392 Globalization and Culture 393 Country-Level Cultural Differences 394
14 Contents xv The Globalization of Psychological Measurement 396 Transporting Psychological Measures across Cultures 396 Terminology 397 Identification of Potential for International Management 397 Selection for International Assignments 399 General Mental Ability 399 Personality 400 Other Characteristics Related to Success in International Assignments 401 Cross-cultural Training 403 Performance Management 405 Performance Criteria 405 Repatriation 408 Planning 408 Career Management 409 Compensation 409 Evidence-Based Implications for Practice 409 Discussion Questions 410 Chapter 18 Organizational Responsibility and Ethical Issues in Human Resource Management 411 At a Glance 411 Organizational Responsibility: Definition and General Framework 412 Organizational Responsibility: Benefits 414 Organizational,Responsibility: Implementation and the Role of HRM Research and Practice 416 Employee Privacy 419 Safeguarding Employee Privacy 420 Fair Information Practice in the Information Age 421 Employee Searches and Other Workplace Investigations 422 Testing and Evaluation 423 Obligations to One's Profession 424 Obligations to Those Who Are Evaluated 425 Obligations to Employers 426 Individual Differences Serving as Antecedents of Ethical Behavior 427 Ethical Issues in Organizational Research 428 Ethical Issues at the Research-Planning Stage 428 Ethical Issues in Recruiting and Selecting Research Participants 429 Ethical Issues in Conducting Research: Protecting Research Participants' Rights 429 Ethical Issues in Reporting Research Results 431
15 xvi Contents Strategies for Addressing Ethical Issues in Organizational Research 432 Science, Advocacy, and Values in Organizational Research 434 Evidence-Based Implications for Practice 436 Discussion Questions 436 Appendix A Scientific and Legal Guidelines on Employee Selection Procedures Checklists for Compliance 437 Scientific Guidelines Summary Checklist 437 Sources of Validity Evidence 437 Choice of Predictors 438 Choice of Participants 438 Data Analysis for Criterion-Related Validity 439 Generalizing Validity Evidence 440 Fairness and Bias 441 Operational Considerations 441 Requirements 441 Communicating the Effectiveness of Selection Procedures 443 Appropriate Use of Selection Procedures 443 Legal Guidelines on Employee Selection Procedures Adverse Impact Validation Criterion-Related Validity Content Validity Construct Validity Validity Generalization Application 451 Appendix B An Overview of Correlation and Linear Regression 453 The Concept of Correlation 453 The Concept of Regression 454 Making Predictions Based on Multiple Predictors 457 Predictive Accuracy of Multiple Regression 459 Appendix C Decision Trees for Statistical Methods 461 References 464 Subject Index 517 Author Index 522
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