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Running Head: ANALYSIS 0

Cost Benefits and Utility Analysis (On-Going Project)

Michael A. Leonard

Walden University

IPSY 8579

Attitudes, Measurement, and Change

Professor Deborah Peck

Cost Benefits and Utility Analysis

Executive Summary

TBD

Introduction

Cost-benefit analysis is useful in estimation of strengths and weaknesses of alternatives in the hiring process. It determines the options that provide the best approach to achieve benefits while minimizing costs (Cascio & Aguinis, 2005). The analysis serves the purposes of determining whether the decision made is justifiable as well as providing a basis for comparison of the costs for each approach used in the decision. On the other hand, utility analysis is the overall usefulness of a personnel selection approach used. The Utility analysis encompasses both the accuracy and the significance of personnel selection decisions. Furthermore, utility implies a major concern for costs with regard to setting up and implementing personnel selection approaches and costs associated with errors arising from incorrect decisions being made (Cabrera & Raju, 2001).

Background on the Organization

TBD

Problem and Purpose Statement

TBD

Literature Search Strategy

TBD

Literature Review

TBD

Summary for Resources Required

Selection of personnel normally requires resources that should be put in place for such processes to take place smoothly and effectively. In terms of equipment, both the executive, manufacturing, and sales will require that the business organization put in place communication infrastructures such as computers, telephones and so forth. Unlike selection of more traveling salespeople, executive and manufacturing selection will require the provision of some physical space to house the new employees. Obviously, the rent per square foot varies depending on the fanciness and location of the facility. But how many square feet does an employee need? Again, this varies but there are some guidelines. Furnishing the new spaces, also come at an extra cost. Additionally, recruitment of new manufacturing employees may call for additional safety measures being put in place to curb incidences of injuries in manufacturing departments. Moreover, more resources in terms of human resources are also required for both types of the jobs to oversee the selection process of employees. Similarly, more monetary resources are required to publish the positions in both job types to reach respective candidates the advertised positions (Jereb, Rajkovic, & Rajkovic, 2005).

Methods Section

Participants

The data was collected forty human resource managers in different companies. Twenty managers were highly experienced with extensive experience in human resource management, their ages range between 40-55 years old, all of whom were from White race. They held senior positions in the human resource departments in their respective companies. On the other hand, the other 20 human resource managers were from African American race, aged between 35-55 years old. The managers like their White counterparts held senior positions in the human resource departments in their respective organizational. In both cases, the managers held contractual tenures in reputable organizations.

Moreover, research studies also involved 20 young graduates who were actively looking for employment, 10 females and 10 males. The graduates were from White and Black races. The young graduates helped in carrying out research on the efficacy of various approaches used in the recruitment of personnel for any organization.

Measures

Measuring Instruments

The research was carried out using both quantitative and qualitative tools in the collection of data for the cost benefits and utility analysis as described below.

Quantitative Instruments

Administration of survey was the quantitative tools that were used to collect data on cost-benefit and utility analysis. The survey includes; interviews (both Computer Assisted Personal Interviewing, CAPI, and Telephone interview), and questionnaires (paper-pencil and web-based questionnaires).

Data were obtained from the human resource managers in different reputable business organizations detailing their methods of recruitment of personnel. Moreover, questionnaires were also used, both the web-based and paper-pencil questionnaires, in collecting data.

Qualitative Data Collection Methods

The qualitative data collection methods were used to improve the quality of survey-based quantitative evaluation of data. This is especially important in coming up with the hypothesis, provide clarity to quantitative evaluation and also improves the design of survey questionnaires. The qualitative methods used include the following; performing in-depth interviews, making further observations and reviewing documents.

Both the survey and questionnaire tools are very crucial in unearthing more information about all the available recruitment approaches used by human resource managers and the responses from the prospective job candidates for such jobs. This is especially important in hypothesis formulation.

Summary of the Instruments Used

The survey was used to determine the level of job satisfaction among the young graduates using global job satisfaction. On the other hand, the commitment of the organization was determined through administering questionnaires. Similarly, job involvement was also investigated using questionnaire data collection instrument to determine the degree of job involvement within the selected business organizations (Stoner & Gallagher, 2010).

Justification and Psychometric Properties of the Instruments

Reliability and validity of questionnaires as an instrument. The reliability of questionnaires is achieved by having internal consistency in terms of administering questions. The will be a consistency of the use of same questions in different sections of the questionnaires. Whenever the is reliability in the questionnaires, then their validity can be guaranteed.

Management of reliability and validity of interviews. To ensure fairly same ratings by an interviewer, there will be the emphasis to adopt the same verbal and non-verbal cues whenever the interviews are being administered. This is very important in managing impression of the interviewee which normally have a great impact on decision making by interviewers. Factors such as maintaining eye contact, positive body language and physical attractiveness can lead to higher scores in interviews but generally only for candidates who provide good answers to the questions asked. On the other hand, in managing impression, self-promotion of previous and future behaviors by the interviewees tend to enhance interviewer evaluations. However, there is some debate about whether these effects are biases. Therefore, by limiting the changes of biased interviews based on the aforementioned factors, the interviews administered can be valid (Aselage & Eisenberger, 2003).

Summary of Psychometric Properties of the Instruments

Interview instruments psychometric properties. The validity and reliability of the interviews administered are checked by adopting the same verbal and non-verbal cues. Such consistency will ensure their validities. On the other hand, psychometric properties of questionnaires are achieved through the internal consistency in the type of questions used throughout the various section of questionnaires. Validity depends so much on the extent of reliability thus by maintaining reliability, validity can be guaranteed (Aselage & Eisenberger, 2003).

Procedure

The questionnaires were administered to 20 young graduates. Both the paper-pencil and web-based questionnaires were administered. The latter was used especially where the interviewees could not be reached.

The questionnaires were designed in such a way that interviewees are send for e-mails which direct them on to a secure web-site to fill in a questionnaire. While the paper-pencil were administered by giving interviewees hardcopy questions to fill in the responses as directed by questions therein.

Administration of interviews relied heavily on two methods, that is, CAPI and face-to-face interview. The information obtained from the interviewees were entered directly into a laptop during interviewing session. This type of interview was conducted on the young graduates. On the other hand, face-to-face interview was used to obtain information from the human resource managers from various companies. The method was deemed to suit the executives who did not have time to be engaged in CAPI.

Data Analysis

The scores on job satisfaction, organizational commitment, and job involvement were measured by carrying performing 2 way-Anova using SPSS advanced computer application. The data obtained from the young graduates were analyzed by calculating the frequencies of the responses obtained during the interviews and questionnaire sessions. Moreover, the use of Anova as a statistical tool ensured the information obtained was categorized in terms of aggregate scores on the three variables; job satisfaction, organizational commitment, and job involvement using the information gathered in the field during surveying.

The analysis of the computed collected quantitative data were done by considering each category of the variable under consideration. The test scores on job satisfaction using global job satisfaction were also analyzed on the strength of the resulting data from Anova test results. Moreover, the two-way Anova also computed the test scores on both job involvement and the extent of organizational involvement (Erdogan & Enders, 2007).

Qualitative analysis was done in two main ways. The analysis was useful in strengthening the design of survey questionnaires and clarifying quantitative evaluation. This was done by reviewing the in-depth interview results. Secondly, the documents such as questionnaires were keenly scrutinized to eliminate biased information data obtained from interviewees (Judge, Piccolo, Podsakoff, Shaw, & Rich, 2010).

Selection Process and Main Components

Normally, business organizations are faced with continuous task of interviewing, selecting and hiring personnel. However, irrespective of the selection skills by the company's human resource departments, selecting the right personnel for job can be very challenging. When wrong choices are made as far as selection is concerned, the adverse effects can be felt in terms of increased costs for the company (Jereb, Rajkovic, & Rajkovic, 2005). Major components of selection process include notification or advertising, reviewing, screening, interviewing, testing, skill assessment then selecting the best available candidate the following;

Testing

Testing as component of personnel selection process can be conducted before the actual hiring on an employee. Such process seeks to unearth some crucial information about the candidate beforehand (Cabrera & Raju, 2001). Testing is usually useful in screening the candidate for addictions such as drugs and in determining job match and the candidate by conducting psychological test on such employees. However, regardless of the many benefits of testing, this process can be very expensive, for instance it involve hiring specialists such as psychologists which in most cases increases the cost of the selection process (Jereb, Rajkovic, & Rajkovic, 2005).

Interviewing

Interviewing is one of the most crucial component of the employment selection process which involve face-to-face discussion of the qualification of the employee’s qualification for the job advertised. Normally, various business organizations have varied approaches interviews for candidates. For instance, the companies may have the candidates meet with human resources, the hiring manager and other employees on one occasion. Alternatively, the candidate can meet different personnel in the company in different occasions (Roehling & Wright, 2006).

Benefits and drawbacks of interviews in the process of personnel selection. The benefits include the following; generally, more information can be gathered during the interview process which can be helpful for both the candidate and interviewer. The interviewer can ask any question to the interviewee while seeking clarification. Nevertheless, interviewing is time saving in selecting the best suitable candidate for the job. Moreover, it is less costly as compared other process of communication (Roehling & Wright, 2006).

However, interviewing is normally incomplete process that is not efficient in selection of the best candidate, it must be supplemented with other approaches such as administering written tests. Moreover, candidates’ assessment can be highly subjective and based on prejudices held by the interviewers. Prejudgment can be based on physical appearance, tone of voice and so forth. Nevertheless, interviewing process can be time-consuming due to time required for Preparation, taking interviews and interpretation of the responses which requires much time, making the interview method time consuming thus costly (Cabrera & Raju, 2001).

Screening

The selection of personnel for various posts may actually involve screening process. The screening entails reviewing of cover letters and résumé of the applicants, making telephone call in order to reach a candidate before the actual interview (Jereb, Rajkovic, & Rajkovic, 2005).

Merits and demerits of screening as a selection tool in recruitment process. Screening can help narrow the field of candidates. A telephone interview also helps a company determine if the candidate has the necessary qualifications to warrant inviting him/her in for an interview thereby reducing the costs that would have been incurred if wrong candidates are invited for the interview. Moreover, sorting of the applicants’ cover letter and résumé help in narrowing down the number of applicants which greatly reduces the cost of selection of personnel. However, if the screening process is not done following proper manner, it can lock out prospective employees who would otherwise been more productive thus increasing the costs in terms of time and resources of the company (Roehling & Wright, 2006).

Skill Assessment

Skill assessment is one of the most crucial component of personnel selection process especially in job types that require expertise such as executive jobs. Most human resource departments consider skill assessment as one of the best hiring tool. The assessment includes tests on computer proficiency to determine overall administrative capabilities. In most cases, the executives can also be subjected to tests that gauge their sound judgment and personality traits. The executive assessment is one of the assessment tool that has gained wider acceptability in reducing the cost associated with hiring wrong candidates for the executive positions (Roehling & Wright, 2006).

Advantage and disadvantages of skill assessment. The assessment may not be very objective especially when the candidate is pressured to perform certain task, subsequently a candidate with extra-ordinary skills may be locked out of the selection process. However, the success of skill assessment can be based on the method of administration used by the hiring team, which can greatly help in reducing costs of selection process (Roehling & Wright, 2006).

Impacts of Selection Process

The impacts of the applicant pool, the number of openings, and the projected volume of applicants for each job type. The larger the applicant pool the greater the chances of getting candidates with unique talents and skills. However, the selection process is normally very expensive with higher number of applicants turning up the job openings. Conducting selection for executives can be very expensive owing the processes it entails (Roehling & Wright, 2006).

Moreover, the higher the number of job openings in both the executive, manufacturing and sale jobs the greater the cost of selection of personnel to fill those positions. The recruitment process become more cumbersome as it involves looking at various categories of applicants for different positions (Cascio & Aguinis, 2005).

Similarly, the higher the number of job applicant for both the executives, manufacturing and sales, the higher the selection cost of personnel. More applicants imply selecting the best candidate among the many applicants. The selection therefore, becomes more expensive thus increasing the cost of hiring process in both manufacturing, sales and executive jobs (Cascio & Aguinis, 2005).

Justification of the selection processes

Executive Position

Interviewing of the potential executives during job selection is usually important in determining if the applicant has requisite communicative or social skills which may be necessary for the job at in question (Cascio & Aguinis, 2005). Through interviews, the interviewer can obtain supplementary information about the administrative skills a prospective employee may possess by allowing the applicant to ask questions that may reveal the additional information useful for making a selection decision. These measures reduce the selection costs that would result if less effective selection approaches are used (Roehling & Wright, 2006).

Similarly, skill assessment can also be used in selection of executives especially in assessing the administrative skills possess by a candidate through testing the work-related proficiencies such as computer and communication skill that a prospective candidate may possess (Jereb, Rajkovic, & Rajkovic, 2005).

Manufacturing Position

Conducting face-to-face interview coupled with assessment of skills and screening are the most effective way of selecting the best personnel for a manufacturing position. Interview enables the interviewers unearth important information about the applicants that would not have otherwise obtained through making phone calls (Cabrera & Raju, 2001). Interviews will enable the hiring team to modify their interview questions appropriate for getting crucial information from the candidates. Moreover, screening of applicants is necessary to have only the applicants with the skills required in manufacturing job to apply for the job, and are subsequently invited for the interview. The use of these selection tools reduce the cost of selection and hiring of personnel (Cabrera & Raju, 2001).

Sales Position

Conducting screening and interviews for salespeople has proved to be effective in taping into the right salesforce with the desired skills for the job. Some companies select their candidates based merely on cultural fit, attitude and technical skills. and competencies possessed by a candidate (Roehling & Wright, 2006).

Therefore, while doing the screening, a candidate can be assess based on their altitude since skills in sales can be modified through trainings. Usually, attitude and personality is important for sales positions, as they are often a customer's first and only point of contact with the business organization. Moreover, conducting an interview for candidates for the sales position is especially important in further confirm the employee’ attitude and aptitude for the sales positions advertised (Jereb, Rajkovic, & Rajkovic, 2005).

Conclusion

It is therefore, imperative for the human resource departments of various companies to use cost-effective methods of personnel selection to minimize cost while taping into great talents and skills possessed by prospective candidates. Productive workforce is important for the success of the company (Cascio & Aguinis, 2005).

Reference

Aselage, J., & Eisenberger, R. (2003). Perceived organizational support and psychological contracts: A theoretical integration. Journal of Organizational Behavior, 24(5), 491–509.

Cabrera, F. E., & Raju, S. N. (2001). Utility analysis: Current trends and future directions. International Journal of Selection and Assessment, 9(1‐2), 92-102.

Cascio, F. W., & Aguinis, H. (2005). Test developments and use: New twists on old questions. Human Resource Management, 44(3), 219–235.

Erdogan, B., & Enders, J. (2007). Support from the top: Supervisors’ perceived organizational support as a moderator of leader-member exchange to satisfaction and performance relationships. Journal of Applied Psychology, 92(2), 321–330.

Jereb, E., Rajkovic, U., & Rajkovic, V. (2005). A hierarchical multi-attribute system approach to personnel selection. International Journal of Selection and Assessment, 13(3), 198–205.

Judge, A. T., Piccolo, F. R., Podsakoff, P. N., Shaw, C. J., & Rich, L. B. (2010). The relationship between pay and job satisfaction: A meta-analysis of the literature. Journal of Vocational Behavior, 77(2), 157–167.

Roehling, V. M., & Wright, P. M. (2006). Organizationally sensible versus legal-centric approaches to employment decisions. Human Resource Management, 45(4), 605-627.

Stoner, S. J., & Gallagher, C. V. (2010). Who cares? The role of job involvement in psychological contract violation. Journal of Applied Social Psychology, 40(6), 1490–1514.

• Frequency Table

• JS1: All in all, I am satisfied with my job.
  			Frequency		Percent		Valid Percent		Cumulative Percent
  Valid		15		9.7		9.7		9.7
  	39		25.2		25.2		34.8
  	38		24.5		24.5		59.4
  	26		16.8		16.8		76.1
  	17		11.0		11.0		87.1
  	16		10.3		10.3		97.4
  	4		2.6		2.6		100.0
  Total	155		100.0		100.0

• JS2: In general, I like my job.
  			Frequency		Percent		Valid Percent		Cumulative Percent
  Valid		14		9.0		9.0		9.0
  	25		16.1		16.1		25.2
  	26		16.8		16.8		41.9
  	44		28.4		28.4		70.3
  	14		9.0		9.0		79.4
  	26		16.8		16.8		96.1
  	6		3.9		3.9		100.0
  Total	155		100.0		100.0

• JS3: In general, I like working at this company
  			Frequency		Percent		Valid Percent		Cumulative Percent
  Valid		17		11.0		11.0		11.0
  	28		18.1		18.1		29.0
  	30		19.4		19.4		48.4
  	36		23.2		23.2		71.6
  	19		12.3		12.3		83.9
  	21		13.5		13.5		97.4
  	4		2.6		2.6		100.0
  Total	155		100.0		100.0

• Reliability Statistics
  Cronbach's Alpha	Cronbach's Alpha Based on Standardized Items	N of Items
  .951	.951	3

• Item Statistics
  	Mean	Std. Deviation	N
  JS1: All in all, I am satisfied with my job.	3.35	1.574	155
  JS2: In general, I like my job.	3.78	1.645	155
  JS3: In general, I like working at this company	3.59	1.627	155

• Inter-Item Correlation Matrix
  	JS1: All in all, I am satisfied with my job.	JS2: In general, I like my job.	JS3: In general, I like working at this company
  JS1: All in all, I am satisfied with my job.	1.000	.848	.889
  JS2: In general, I like my job.	.848	1.000	.861
  JS3: In general, I like working at this company	.889	.861	1.000

• Summary Item Statistics
  	Mean	Minimum	Maximum	Range	Maximum / Minimum	Variance	N of Items
  Item Means	3.574	3.355	3.781	.426	1.127	.045	3

• Item-Total Statistics
  	Scale Mean if Item Deleted	Scale Variance if Item Deleted	Corrected Item-Total Correlation	Squared Multiple Correlation	Cronbach's Alpha if Item Deleted
  JS1: All in all, I am satisfied with my job.	7.37	9.961	.900	.817	.926
  JS2: In general, I like my job.	6.94	9.678	.880	.774	.941
  JS3: In general, I like working at this company	7.14	9.572	.910	.832	.917

• Scale Statistics
  Mean	Variance	Std. Deviation	N of Items
  10.72	21.384	4.624	3

• GET

• FILE='C:\Users\Maria\Downloads\PSYC_8579_PSYC_6579_PSYC_8579P_Week_08_JobAttitudesDataset.sav'.

• DATASET NAME DataSet1 WINDOW=FRONT.

• DATASET CLOSE DataSet1.

• GET

• FILE='C:\Users\Maria\Downloads\PSYC_8579_PSYC_6579_PSYC_8579P_Week_08_JobAttitudesDataset.sav'.

• DATASET NAME DataSet2 WINDOW=FRONT.

• RELIABILITY

• /VARIABLES=js01 js02 js03

• /SCALE('ALL VARIABLES') ALL

• /MODEL=ALPHA

• /STATISTICS=DESCRIPTIVE SCALE CORR

• /SUMMARY=TOTAL MEANS.

Organizational Commitment-Affective AC01-AC06

RELIABILITY

/VARIABLES=ac01 ac02 ac03 ac04 ac05 ac06

/SCALE('ALL VARIABLES') ALL

/MODEL=ALPHA

/STATISTICS=DESCRIPTIVE SCALE CORR

/SUMMARY=TOTAL MEANS.

Job Involvement JI01-JI06

RELIABILITY

/VARIABLES=ji01 ji02 ji03 ji04 ji05 ji06

/SCALE('ALL VARIABLES') ALL

/MODEL=ALPHA

/STATISTICS=DESCRIPTIVE SCALE CORR

/SUMMARY=TOTAL MEANS.

Perceived Organizational Fit POS01-POS09

RELIABILITY

/VARIABLES=POS01 POS02 POS03 POS04 POS05 POS06 POS07 POS08 POS09

/SCALE('ALL VARIABLES') ALL

/MODEL=ALPHA

/STATISTICS=DESCRIPTIVE SCALE CORR

/SUMMARY=TOTAL MEANS.

Person-Job Fit PJ01-PJ05

RELIABILITY

/VARIABLES=PJFit01 PJFit02 PJFit03 PJFit04 PJFit05

/SCALE('ALL VARIABLES') ALL

/MODEL=ALPHA

/STATISTICS=DESCRIPTIVE SCALE CORR

/SUMMARY=TOTAL MEANS.

Person Organizational Fit PO01-PO03

RELIABILITY

/VARIABLES=POFit01 POFit02 POFit03

/SCALE('ALL VARIABLES') ALL

/MODEL=ALPHA

/STATISTICS=DESCRIPTIVE SCALE CORR

/SUMMARY=TOTAL MEANS.