Personnel and employment decision making: Are economic and social objectives incompatible?

The esteemed Prof. Wayne Cascio spoke at the UNISA and TTS – Top Talent Solutions Fairness Conference about personnel decisions: Are economic and social objectives incompatible. He made reference to the first South African conference on fairness in 1991 on employment where fax machines were used as communication tools.

Prof. Cascio then proceeded to say that in relation to Human Resources, HR, and I/O Psychology issues, the United States had three decades of Equal Employment Opportunity experience and a realization that HR does not have all the answers.


Unfair discrimination exists when people with an equal chance of being successful on a job have an unequal chance of being hired for that job. He said that job related assessments are useful and that low tests scores do relate to low job performance scores. The challenge, according to Prof. Cascio, is how to harness the energy and creativity of a diverse and multi-cultural workforce. This challenge should be viewed as an opportunity and not a problem. The words “equal opportunity” must be defined by each generation, taking into account that society is expected to create opportunities. Social policy is not for or against tests, but rather how they are used. But what if tests produce adverse impact? If there is a difference in selection rates this does not mean an organisation discriminated unfairly. The motivation to reduce adverse impact is that adverse impact can have negative consequences for the organisation, its customers and society.  Prof. Cascio then provided strategies of reducing adverse impact:

  • Improve the recruitment strategy for under-represented groups: The higher the selection ratio the lower the probability of adverse impact therefore it is a good idea to use targeted recruitment, to attract, select, include and retain under-represented group members.
  • Make use of cognitive abilities in combination with non-cognitive predictors: This may not only reduce adverse impact but increase the overall validity of the testing process.
  • Use measures of specific, as opposed to only general, cognitive abilities: Large mean differences have been found for general cognitive abilities. However differences are smaller for specific abilities e.g. reasoning and qualitative ability.
  • Use alternate modes of presenting test stimuli: Make use of formats that are not heavy in reading, if not required for the job.
  • Develop tests that are acceptable to and that are perceived to be valid by all test takers: Ensure the test has face validity to boost motivation.
  • Use test score banding to reconcile social and economic objectives.

It is important to note that fairness includes not only technical issues, but social and interpersonal processes. According to the APA Test Standards (1999) “the interaction of examiners with examinees should be professional, courteous, caring and respectful. Attention to these aspects of test use and interpretation is no less important than technical concerns” (p73). Further according to the APA Test Standards (1999) “fair and equitable treatment of test takers  involves providing, in advance of testing,  information about the nature of test, the intended use of test score and the confidentiality of results”(p85). These standards help reduce negative emotions, including perception of unfairness, held by those who are not offered employment because of insufficient test performance. Prof. Cascio went on to say that with regards to fairness and public policy, social critics have focused on written tests as the primary vehicle for unfair discrimination in employment, yet unfair discrimination may affect all aspects of the employment relationship for example:

  • Recruitment: e.g. passive non-discrimination
  • Staffing: e.g. requiring an advanced degree for a clerical position or using an very difficult or non-valid test for hiring or promotion
  • Compensation: e.g. paying lower wages to similar qualified women or minorities than to white men for the same work
  • Placement: e.g. “channelling” members of certain group into the least desirable jobs
  • Training and orientation: e.g. refusing to provide in depth job orientation or training to certain groups
  • Performance management: e.g. bias in supervisory rating or giving less frequent or lower quality feedback to members of certain groups

Prof. Cascio added that unfair discrimination is hardly limited to employment testing, although testing is a visible target for public attack. Tests serve as instruments of public policy which must be re-evaluated periodically. In-line with what Prof. Cascio said prior he mentioned again that each generation must think carefully about the meaning of the words “equal opportunity”. Answers may vary from generation to generation, however one thing that is clear is that sound policy is not for test or against tests. Some errors are inevitable in employment decisions but the crucial question to be asked, with regards to each procedure, is whether or not if it is used, is there a lesser social cost than is paid for the errors considering all other assessment methods.

Prof. Cascio then moved his focus to two approaches to fairness in employment used in other societies, namely; India and Saudi Arabia. In India affirmative action, overt preferential treatment, is used to engineer advancement for its underclasses. Individuals are classified, using the hindu caste system, viewed as one of the great evils of Indian society. Large groups are officially listed as “backward” or “underprivileged” classes. These classes are entitled to 27% of central government jobs, university admissions and varying proportions of state jobs. The danger in using the hindu caste system, as a developmental tool, is that it perpetuates ancient divisions that still run deep. In 2011 the Indian Supreme Court ruled that “the caste system is a curse on the nation, the sooner it is destroyed the better”.

The second society Prof. Cascio mentioned was Saudi Arabia. He stated that in Saudi Arabia there are 27,1 million people. Of this 8,4 million are non-nationals, 1.17 males for every female and a median age 25.3 years.  People older than 15 years make up 43% of the population and only 3% of the population are older than 65 years of age. Literacy rates for men are 84,7% and 70,8% for women. The ethic mix is roughly 90% Arab and 10% Afro Asian. Youth unemployment is higher in Saudi Arabia than in other countries in the Middle East and North Africa. The objective is to nationalise the private-sector workforce, dominated by foreigners, in order to create 1.12 million new jobs for Saudi nationals. The aim is to create these jobs by 2014 which is roughly 92% of all new jobs created. In the old quota system, 30% of all jobs must go to Saudi’s however only a third of that was achieved. The new scheme known as “Nitaqat” meaning range in Arabic was applied to 205 categories of quotas that varied based on type of work and size of organisation. Organisations that achieve more than 30% nationalization are classified as “excellent” or “green”. These organisations can recruit foreign workers freely and transfer their sponsorship visa without the current employer’s consent. However organisations in the “red” categories, those that “resist the Saudization process,” are unable to renew or get new work permits for employees. They are also unable to renew their employees’ visas or to hire new foreign labour. Furthermore organisations in the “yellow “category can renew work permits unless the employees have spent less than 6 years in Saudi Arabia. If in the “excellent” or “green” category the organisation can recruit workers from organisations in the “yellow” or “red” categories without having to obtain their employers’ consent. The aim is to encourage organisations to comply with quotas in order for them to retain their top expatriate talent.

Prof. Cascio ended off by adding that different societies interpret the concept “fairness” differently and different political and legal systems may lead to economic and social trade-offs. Each society must interpret “fairness” in a manner that is consistent with its values and social scientists have an important role to play through influencing policy.

July 16, 2015