“The Keepon Trucking Company (KTC) is a manufacturer of custom-built trucks. It does not manufacture any particular truck lines, styles, or models. Rather, it builds trucks to customers specifications; these trucks are used for specialty purposes such as snow removal, log hauling, and military cargo hauling. One year ago, KTC received a new, large order that would take three years to complete and required the external hiring of 100 new assemblers. To staff this particular job, the HR department manager of nonexempt employment hurriedly developed and implemented a special staffing process for filling these new vacancies. Applicants were recruited from three sources: newspaper ads, employee referrals, and a local employment agency. All applicants generated by these methods were subjected to a common selection and decision-making process. All offer receivers were given the same terms and conditions in their job offer letters and were told there was no room for any negotiation. All vacancies were eventually filled.
After the first year of the contract, the manager of nonexempt employment, Dexter Williams, decided to pull together some data to determine how well the staffing process for the assembler jobs had worked. Since he had not originally planned on doing any evaluation, Dexter was able to retrieve only the following data to help him with his evaluation:”

Determine the yield ratios (offer receivers / applicants, new hires / applicants), elapsed time or cycle times (days to offer, days to start), and retention rates associated with each recruitment source.

What is the relative effectiveness of the three sources in terms of yield ratios, cycle times, and retention rates?

What are some possible reasons for the fact that the three sources differ in their relative effectiveness?

What would you recommend Dexter do differently in the future to improve his evaluation of the staffing process?

“Randy May is a 32-year-old airplane mechanic for a small airline based on Nantucket Island, Massachusetts. Recently, Randy won $2 million in the New England lottery. Because Randy is relatively young, he decided to invest his winnings in a page 588business to create a future stream of earnings. After weighing many investment options, Randy chose to open up a chain of ice cream shops in the Cape Cod area. (As it turns out, Cape Cod and the nearby islands are short of ice cream shops.) Randy reviewed his budget and figured he had enough cash to open shops on each of the two islands (Nantucket and Marthas Vineyard) and two shops in small towns on the Cape (Falmouth and Buzzards Bay). Randy contracted with a local builder, and the construction/renovation of the four shops is well under way.
The task that is occupying Randys attention now is how to staff the shops. Two weeks ago, he placed advertisements in three area newspapers. So far, he has received 100 applications. Randy has done some informal HR planning and figures he needs to hire 50 employees to staff the four shops. Being a novice at this, Randy is unsure how to select the 50 people he needs to hire. Randy consulted his friend Mary, who owns the lunch counter at the airport. Mary told Randy that she used interviews to get the most knowledgeable people possible and recommended it to Randy because her people had generally worked out well. While Randy greatly respected Marys advice, on reflection some questions came to mind. Does Marys use of the interview mean that it meets Randys requirements? How can Randy determine whether his chosen method of selecting employees is effective or ineffective?
Confused, Randy also sought the advice of Professor Ray Higgins, from whom Randy took an HR management course while getting his business degree. After learning of the situation and offering his consulting services, Professor Higgins suggested that Randy choose one of two selection methods (after paying Professor Higginss consulting fees, he cannot afford to use both methods). The two methods Professor Higgins recommended are the interview (as Mary recommended) and a work sample test that entails scooping ice cream and serving it to a customer. Randy estimates that it would cost $100 to interview an applicant and $150 per applicant to administer the work sample. Professor Higgins told Randy that the validity of the interview in predicting overall job performance for customer service employees is r = .30, while the validity of the work sample in predicting overall job performance is r = .50. Professor Higgins also informed Randy that the selection ratio is probably fairly high because there arent a lot of job seekers and because the minimum wage he plans on paying isnt likely to attract people in this area.”

Randy would really appreciate it if you could help him answer the following questions:

What parts of this information seem most important for the choice of selection measures?
How does each piece of information fit with the choice of assessment method discussion?

If Randy can use only one method, which should he use?

If the number of applicants for these jobs increases dramatically (more applications are coming in than Randy expected), how will your answers to questions 1 and 2 change?

What are some additional pieces of information youd like to have before committing to any of these options? What other criteria might be relevant?

“The Phonemin Company is a distributor of mens and womens casual clothing. It sells exclusively through its merchandise catalog, which is published four times per year to coincide with seasonal changes in customers apparel tastes. Customers may order merchandise from the catalog via mail or over the phone. Currently, 70% of orders are phone orders, and the organization expects this to increase to 85% within the next few years.
page 362The success of the organization is obviously very dependent on the success of the telephone ordering system and the customer service representatives (CSRs) who staff the system. There are currently 185 CSRs; that number should increase to about 225 CSRs to handle the anticipated growth in phone order sales. Though the CSRs are trained to use standardized methods and procedures for handling phone orders, there are still seemingly large differences among them in their job performance. CSR performance is routinely measured in terms of error rate, speed of order taking, and customer complaints. The top 25% and lowest 25% of performers on each of these measures differ by a factor of at least three (i.e., the error rate of the bottom group is three times as high as that of the top group). Strategically, the organization knows that it could substantially enhance CSR performance (and ultimately sales) if it could improve its staffing batting average by more accurately identifying and hiring new CSRs who are likely to be top performers.
The current staffing system for CSRs is straightforward. Applicants are recruited through a combination of employee referrals and newspaper ads. Because turnover among CSRs is so high (50% annually), recruitment is a continuous process at the organization. Applicants complete a standard application blank, which asks for information about education and previous work experience. The information is reviewed by the staffing specialist in the HR department. Only obvious misfits are rejected at this point; the others (95%) are asked to have an interview with the specialist. The interview lasts 2030 minutes, and at the conclusion the applicant is either rejected or offered a job. Due to the tightness of the labor market and the constant presence of vacancies to be filled, 90% of the interviewees receive job offers. Most of those offers (95%) are accepted, and the new hires attend a one-week training program before being placed on the job.
The organization has decided to investigate the possibilities of increasing CSR effectiveness through sounder staffing practices. In particular, it is not pleased with its current methods of assessing job applicants; it feels that neither the application blank nor the interview provides an accurate and in-depth assessment of the applicant KSAOs that are truly needed to be an effective CSR. Consequently, it engaged the services of a consulting firm that offers various methods of KSAO assessment, along with validation and installation services. In cooperation with the HR staffing specialist, the consulting firm conducted the following study for the organization.
A special job analysis led to the identification of several specific KSAOs likely to be necessary for successful performance as a CSR. Three of these (clerical speed, clerical accuracy, and interpersonal skills) were singled out for further consideration because of their seemingly high impact on job performance. Two new methods of assessment provided by the consulting firm were chosen for experimentation. The first is a paper-and-pencil clerical test assessing clerical speed and accuracy. It contains 50 items and has a 30-minute time limit. The second is a brief work sample that could be administered as part of the interview process. In the work page 363sample, the applicant must respond to four different phone calls: a customer who is irate about an out-of-stock item, a customer who wants more product information about an item than was provided in the catalog, a customer who wants to change an order placed yesterday, and a customer who has a routine order to place. Using a 15 rating scale, the interviewer rates the applicant on tactfulness (T) and concern for customers (C). The interviewer is provided with a rating manual containing examples of exceptional (5), average (3), and unacceptable (1) responses by the applicant.
A random sample of 50 current CSRs were chosen to participate in the study. At Time 1 they were administered the clerical test and the work sample; performance data were also gathered from company records for error rate (number of errors per 100 orders), speed (number of orders filled per hour), and customer complaints (number of complaints per week). At Time 2, one week later, the clerical test and the work sample were re-administered to the CSRs. A member of the consulting firm sat in on all the interviews and served as a second rater of performance on the work sample at Time 1 and Time 2. It is expected that the clerical test and work sample will have positive correlations with speed and negative correlations with error rate and customer complaints.”

After reading the description of the study and observing the results above,

How do you interpret the reliability results for the clerical test and work sample? Are they favorable enough for Phonemin to consider using them for keeps in selecting new job applicants?

How do you interpret the validity results for the clerical test and work sample? Are they favorable enough for Phonemin to consider using them for keeps in selecting new job applicants?

What limitations in the above study should be kept in mind when interpreting the results and deciding whether to use the clerical test and work sample?

The Kaiser Manufacturing Company (KMC) has been in existence for over 50 years. Its main products are specialty implements for use in both the crop and the dairy herd sides of the agricultural business. Products include special attachments for page 146tractors, combines, and discers and add-on devices for milking and feeding equipment that enhance the performance and safety of the equipment.
KMC has a small corporate office and four manufacturing plants (two in the Midwest and two in the South). It has a core workforce of 725 production workers, 30 clerical workers, 32 engineers and professional workers, and 41 managers. All employees are full time, and KMC has never used either part-time or temporary workers. Those in charge of staffing feel very strongly that the strategy of using only a core workforce has paid big dividends over the years in attracting and retaining a committed and highly productive workforce.
Sales have been virtually flat at $175 million annually since 2012. At the same time, KMC has begun to experience more erratic placement of orders for its products, making sales less predictable. This appears to be a reflection of more turbulent weather patterns, large swings in interest rates, new entrants into the specialty markets, and general uncertainty about the future direction and growth of the agricultural industry. Increased unpredictability in sales has been accompanied by steadily rising labor costs. This is due to KMCs increasingly older workforce, as well as shortages of all types of workers (particularly production workers) in the immediate labor markets surrounding the plants.
Assume you are the HR manager responsible for staffing and training at KMC. You have just been contacted by a representative of the Flexible Staffing Services (FSS) Company, Mr. Tom Jacoby. Mr. Jacoby has proposed meeting with you and the president of KMC, Mr. Herman Kaiser, to talk about FSS and how it might be of service to KMC. You and Mr. Kaiser agree to meet with Mr. Jacoby. At that meeting, Mr. Jacoby makes a formal presentation to you in which he describes the services, operation, and fees of FSS and highlights the advantages of using a more flexible workforce. During that meeting, you learn the following from Mr. Jacoby.
FSS is a recent entrant into what is called the staffing industry. Its general purpose is to furnish qualified employees to companies (customers) on an as-needed basis, thus helping the customer implement a flexible staffing strategy. It furnishes employees in four major groups: production, clerical, technical, and professional/managerial. Both full-time and part-time employees are available in each of these groups. Employees may be furnished to the customer on a strictly temporary basis (temps) or on a temp-to-perm basis, in which the employees convert from being temporary employees of FSS to being permanent employees of the customer after a 90-day probationary period.
For both the temp and the temp-to-perm arrangements, FSS offers the following services. In each of the four employee groups it will recruit, select, and hire people to work for FSS, which will in turn lease them to the customer. FSS performs all recruitment, selection, and employment activities. It uses a standard selection system for all applicants, composed of an application blank, reference checks, drug testing, and a medical exam (given after making a job offer). It also offers customized selection plans in which the customer chooses from among a set of special skill tests, a personality test, an honesty test, and background investigations. Based page 147on the standard and/or custom assessments, FSS refers to the customer what it views as the top candidates. FSS tries to furnish two people for every vacancy, and the customer chooses from between the two.
New hires at FSS receive a base wage that is similar to the market wage, as well as close to the wage of the customers employees with whom they will be directly working. In addition, new hires receive a paid vacation (one week for every six months of employment, up to four weeks), health insurance (with a 25% employee co-pay), and optional participation in a 401(k) plan. FSS performs and pays for all payroll functions and deductions. It also pays the premiums for workers compensation and unemployment compensation.
FSS charges the customer as follows. There is a standard fee per employee furnished of 1.55 base wage hours worked per week. The 1.55 is labeled markup; it covers all of FSSs costs (staffing, insurance, benefits, and administration) plus a profit margin. On top of the standard fee is an additional fee for customized selection services. This fee ranges from .50 to .90 base wage hours worked per week. Finally, there is a special one-time fee for temp-to-perm employees (a finders fee of one months pay), payable after the employee successfully completes the 90-day probationary period and becomes an employee of the customer.
Mr. Jacoby concludes his presentation by stressing three advantages of flexible staffing as provided by FSS. First, use of FSS employees on an as-needed basis will give KMC greater flexibility in its staffing to match fluctuating product demand, as well as movement from completely fixed labor costs to more variable labor costs. Second, FSS provides considerable administrative convenience, relieving KMC of most of the burden of recruitment, selection, and payrolling. Finally, KMC will experience considerable freedom from litigation (workers comp, EEO, torts) since FSS and not KMC will be the employer.
After Mr. Jacobys presentation, Mr. Kaiser tells you he is favorably impressed, but that the organization clearly needs to do some more thinking before it embarks on the path of flexible staffing and the use of FSS as its provider. He asks you to prepare a brief preliminary report including the following:”

A summary of the possible advantages and disadvantages of flexible staffing

A summary of the advantages and disadvantages of using FSS as a service provider

A summary of the type of additional information you recommend gathering and using as part of the decision-making process

Scenario:

“Best Protection Insurance Company (BPIC) handles a massive volume of claims each year in the corporate claims function, as well as in its four regional claims centers. The corporate claims function is headed by the senior vice president of corporate claims (SVPCC); reporting to the SVPCC are two managers of corporate claims (MCC-Life and MCC-Residential) and a highly skilled corporate claims specialist (CCS). Each regional office is headed by a regional center manager (RCM); the RCM is responsible for both supervisors and claims specialists within the regional office. The RCMs report to the vice president of regional claims (VPRC). The organization is structured as follows:

BPIC decided to reorganize its claims function by eliminating the four regional offices (and the RCM position) and establishing numerous small field offices throughout the country. The other part of the reorganization involved creating five new CCS positions. The CCS job itself was to be redesigned and upgraded in terms of knowledge and skill requirements. These new CCS positions would be staffed through internal promotions from within the claims function.
The SVPCC asked Gus Tavus, a 52-year-old RCM, to apply for one of the new CCS positions since his job was being eliminated. The other RCMs, all of whom were over 40 years of age, were also asked to apply. Neither Gus nor the other RCMs were promoted to the CCS positions. Other candidates, some of whom were also over age 40, were also bypassed. The promotions went to five claims specialists and supervisors from within the former regional offices, all of whom were under age 40. Two of these newly promoted employees had worked for, and reported to, Gus as RCM.
page 88Upon learning of his failure to be promoted, Gus sought to find out why. What he learned led him to believe that he had been discriminated against because of his age. He then retained legal counsel, attorney Bruce Davis. Bruce met informally with the SVPCC to try to determine what had happened in the promotion process and why his client had not been promoted. He was told that there were numerous candidates who were better qualified than Gus and that Gus lacked adequate technical and communication skills for the new job of CCS. The SVPCC refused to reconsider Gus for the job and said that all decisions were etched in stone. Gus and Bruce then filed suit in federal district court, claiming a violation of the Age Discrimination in Employment Act. They also subpoenaed numerous BPIC documents, including the personnel files of all applicants for the CCS positions.
After reviewing the documents and discussing things with Gus, Bruce learned more about the promotion process actually used by BPIC. The SVPCC and the two MCCs conducted the entire process; they received no input from the VPRC or the HR department. There was no formal, written job description for the new CCS position, nor was there a formal internal job posting as required by company policy. The SVPCC and the MCCs developed a list of employees they thought might be interested in the job, including Gus, and then met to consider the list of candidates. At that meeting, the personnel files and previous performance appraisals of the candidates were not consulted. After deciding on the five candidates who would be offered the promotion (all five accepted), the SVPCC and MCCs scanned the personnel files and appraisals of these five (only) to check for any disconfirming information. None was found. Bruces inspection of the files revealed no written comments suggesting age bias in past performance appraisals for any of the candidates, including Gus. Also, there was no indication that Gus lacked technical and communication skills. All of Guss previous appraisal ratings were above average, and there was no evidence of decline in the favorability of the ratings. Finally, an interview with the VPRC (Guss boss) revealed that he had not been consulted at all during the promotion process, that he was shocked beyond belief that Gus had not been promoted, and that there was no question but that Gus was qualified in all respects for the CCS job.”…. END

Now…

Prepare a written report that presents a convincing disparate treatment claim that Gus had been intentionally discriminated against on the basis of his age. Do not address the claim as one of disparate impact.

Present a convincing rebuttal, from the viewpoint of BPIC, to this disparate treatment claim.