Statistical Implications of Six Methods of Test Score use in Personnel Selection

Abstract

The assumptions and statistical implications of six methods of test use in em- ployment contexts were examined by using an actual distribution of test scores of 3,377 candidates for jobs as firefighters in a large U.S. city. The six methods examined were: (a) strict top-down referral in order of test score; (b) within-group percentile referral; (c) fixed bands, using random referral within bands; (d) fixed bands, using nonrandom, diversity-based referral within bands; (e) sliding bands, using random referral within bands; and (f) sliding bands, using nonrandom, diversity-based referral within bands. The six strate- gies yielded significant differences on two related criteria: the percentages of minority and nonminority candidates referred for selection, and the relative level of adverse impact produced by each referral strategy. Average test scores of selectees at two different selection ratios did not differ significantly across the six referral strategies. Implications of the findings are discussed in terms of their impact on merit hiring and the achievement of economic and social goals. In general, use of any strategy other than strict top-down referral results in some loss in utility. However, if the goal is to optimize social and ec- onomic objectives simultaneously, then tradeoffs are necessary. In some situ- ations, use of the sliding band (with diversity-based referral) may be best suited to this purpose.