Industrial/Organizational Psychology PSYM110

Reference and Letter of Recommendation

 An employer must obtain information about the quality of previous performance

by relying on an applicant's references:

• Reference check - the process of confirming the accuracy of information

provided by an applicant.

• Reference - the expression of an opinion, either orally or through a written

checklist, regarding an applicant's ability, previous performance, work habits,
character, or potential for future success.

• Letter of recommendation - a letter expressing an opinion regarding an

applicant's ability, previous performance, work habits, character, or potential for
future success.

Reasons for References and Reference Letters

1. Confirming Details on a Résumé

• Résumé fraud - The intentional placement of untrue information on a résumé.

*** In May of 2002, Sandra Baldwin was forced to resign as chair of the U.S. Olympic
Committee when it was discovered she had lied on her résumé about having a Ph.D.

2. Checking for Discipline Problems

• To determine whether the applicant has a history of such discipline problems as

poor attendance, sexual harassment, and violence.

• If an organization hires an applicant without checking his references and

background and he later commits a crime while in the employ of the organization,
the organization may be found liable for negligent hiring

Why conduct background check?

In Virginia, an employee of a grocery store copied the address of a female

customer from a check she had written to the store. The employee later went to the
customer's home and raped her. In this example, a case for negligent hiring could
not be made because the company had contacted the employee's previous
employment references and had found no reason not to hire him. Because there
was nothing to discover and because the store had taken reasonable care to check
its employees, it was not guilty of negligent hiring

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Discovering New Information about Applicants

Former employers and professors can provide information about an applicant's work
habits, character, personality, and skills. Care must be taken, however, when using
these methods because the opinion provided by any particular reference may be
inaccurate or purposefully untrue.

Predicting Future Performance

References and letters of recommendation are ways to try to predict future

performance by looking at past performance.

Even though references are commonly used to screen and select employees, they
have not been successful in predicting future employee success. In fact, a
meta-analysis found that the average uncorrected validity coefficient for
references/letters of recommendation and performance is only .

FOUR MAIN PROBLEMS IN WITH LETTERS OF RECOMMENDATION

1. Leniency - Research is clear that most letters of recommendation are positive:

Fewer than 1% of references rate applicants as below average or poor.
Applicants choose their own references!
• Negligent reference - if a company does not provide relevant information to
an organization that requests it

2. Knowledge about the Applicant

The person writing the letter often does not know the applicant well, has not
observed all aspects of an applicant's behavior, or both.
• Employees often act very differently around their supervisors than they do
around coworkers and customers
3. Reliability
Lack of agreement between two people who provide references for the same
person. Research reveals that reference reliability is only .22.
• There is more agreement between recommendations written by the same
person for two different applicants than between two people writing
recommendations for the same person

4. Extraneous Factors
• Letters that contained specific examples were rated higher than letters that
contained generalities.

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• Letters written by references who like applicants are longer than those written
by references who do not.
• The longer the recommendation letter, the more positively the letter was
perceived.

Why conduct background check?

An applicant received a glowing letter of recommendation from a coworker and
in which the applicant was hired in part due to the strength of that letter. Within
a few months, the new employee was engaged in discipline problems, and it
was only then that the organization discovered that the person who had written
the glowing letter was the applicant's daughter. Because the mother's and
daughter's last names were different and because the exact relationship
between the two was not stated in the letter, the organization never suspected
that they were related.

ETHICAL ISSUES
1. Explicitly state your relationship with the person you are recommending.
2. be honest in providing details.
3. Let the applicant see your reference before sending it, and give him the
chance to decline to use it.

TESTING AND ASSESSMENT IN THE SELECTION PROCESS

PREDICTING PERFORMANCE USING APPLICANT ABILITY

Ability tests tap the extent to which an applicant can learn or perform a job-
related skill. Ability tests are used primarily for occupations in which applicants
are not expected to know how to perform the job at the time of hire.

TYPES OF ABILITY MEASURES

1. Cognitive Ability
o Abilities involving the knowledge and use of information
o Cognitive ability is thought to predict work performance in two ways: by
allowing employees to quickly learn job-related knowledge and by
processing information resulting in better decision making.
o Drawbacks: Lack of face validity, difficulty in setting a passing score,

2. Perceptual Ability

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o Measure of facility with such processes as spatial relations and form

perception.
o Abilities from this dimension are useful for such occupations as machinist,
cabinet maker, driver etc.

3. Manual Dexterity
o Measure of facility with such processes as finger dexterity and motor
coordination.
o Psychomotor abilities are useful for such jobs as carpenter, police officer,
sewing-machine operator, post office clerk, and truck driver.

4. Physical Ability
o Tests that measure an applicant's level of physical ability required for a
job.
o Because of the difficulty in using simulations to measure these last types
of behaviors, physical ability tests are used.
o Drawbacks: job relatedness, passing scores, and the time at which they
should be required.

PREDICTING PERFORMANCE USING APPLICANT SKILL

Rather than measuring an applicant's current knowledge or potential to perform
a job (ability), some selection techniques measure the extent to which an
applicant already has a job-related skill. The two most common methods for
doing this are the work sample and the assessment center.

Work Sample
With a work sample, the applicant performs actual job-related tasks.
• They are directly related to job tasks, they have excellent content validity.
• Scores from work samples tend to predict actual work performance and thus
have excellent criterion validity
• Applicants are able to see the connection between the job sample and the
work performed on the job

Assessment Centers - characterized by the use of multiple assessment

methods that allow multiple assessors to actually observe applicants perform
simulated job tasks.

Steps in Creating Assessment Centers

1. Job Analysis

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2. Exercises are developed: in-basket technique, simulations, work samples,

leaderless group discussions
3. Assessors are chosen to rate the applicants going through the assessment
center

ASSESSMENT CENTERS
• in-basket technique - designed to simulate the types of daily information
that appear on a manager's or employee's desk
• simulation - places an applicant in a situation that is similar to the one that
will be encountered on the job
• Leaderless group discussion - applicants meet in small groups and are
given a job-related problem to solve or a job-related issue to discuss.
• business game - exercise that is designed to simulate the business and
marketing activities

PREDICTING PERFORMANCE USING PRIOR EXPERIENCE

Applicant experience is typically measured in one of four ways:

• resumé information

• biodata

• reference checks

• interviews

PREDICTING PERFORMANCE USING PERSONALITY, INTEREST, AND

CHARACTER

Personality Inventories - Personality inventories are becoming increasingly

popular as an employee selection method because they predict performance better
than was once thought and because they result in less adverse impact than do
ability tests

• personality can predict performance at low but statistically significant levels;

• personality inventories can add incremental validity to the use of other
selection tests;
• conscientiousness is the best predictor in most occupations and for most
criteria; and
• the validity of the other four personality dimensions is dependent on the type
of job and criterion for which the test is being validated

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Integrity Tests - Also called an honesty test; a psychological test designed to

predict an applicant's tendency to steal.

PREDICTING PERFORMANCE LIMITATIONS DUE TO MEDICAL AND

PSYCHOLOGICAL PROBLEMS

• Drug Testing

• Psychological Exams

• Medical Exams

Rejecting Applicants

• Once a decision has been made regarding which applicants will be hired,
those who will not be hired must be notified.
• Rejected applicants should be treated well because they are potential
customers and potential applicants for other positions.

How to make a good quality rejection letter?

• A personally addressed and signed letter

• The company’s appreciation to the applicant for applying for position with the
company
• A compliment about the applicant’s qualifications
• A comment about the high qualifications possessed by the other applicants
• Information about the individual who was actually hired
• A wish of good luck in future endeavors
• A promise to keep the applicant’s resume on fil

SUMMARY

• References typically are not good predictors of performance due to such factors
as leniency, poor reliability, fear of legal ramifications, and a variety of extraneous
factors.

• Reliability, validity, cost, and potential for legal problems should be considered
when choosing the right type of employment test for a particular situation

• Cognitive ability tests, job knowledge tests, biodata, work samples, and
assessment centers are some of the better techniques in predicting future
performance.

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• Drug testing and medical exams are commonly used to screen employees prior to
their starting a job.

• Writing a well-designed rejection letter can have important organizational

consequences.

PERFORMANCE EVALUATION

Step 1: Determine the Reason for Evaluating Employee Performance

1. Providing Employee Training and Feedback

o feedback about what employees is doing right and wrong.

2. Determining Salary Increases

o to provide a fair basis on which to determine an employee's salary

increase.

3. Making Promotion Decisions

o to determine which employees will be promoted.

4. Making Termination Decisions

o When performance management techniques are not successful, the

results of a performance review might suggest that the best course of
action is to terminate the employee.

5 Conducting Personnel Research

o Employment tests must be validated, and one way this can be done is by
correlating test scores with some measure of job performance.

Step 2: Identify Environmental and Cultural Limitations

• Identify the environmental and cultural factors that could affect the system.

o If supervisors are highly overworked, an elaborate, time-consuming

performance appraisal system will not be successful.
o In an environment which there is no money available for merit pay,
developing a numerically complex system will become frustrating, and the
results of the evaluation may not be taken seriously.

• In an environment in which employees are very cohesive, the use of peer ratings
might reduce the cohesiveness.

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Step 3: Determine Who Will Evaluate Performance

• Traditionally, employee performance has been evaluated solely by supervisors.

• Organizations, however, have realized that supervisors see only certain aspects
of an employee's behavior.

- a branch manager might observe only 30% of a teller's work

behavior; the rest is observed by customers, peers, and support
staff in other parts of the bank.
• Consequently, to obtain an accurate view of the teller's performance, these
other sources can be used to provide feedback.
• The buzzwords for using multiple sources to appraise performance are 360-
degree feedback and multiple-source feedback.
• Sources of relevant information about employee performance include
supervisor, peers, subordinate, customers and self-appraisal.
- About 34% of large U.S. organizations use some form of
multiple-
source feedback (Mercer Consulting, 2013).

• Supervisors - By far the most common source of performance appraisal is the

supervisor rating.

- a 2013 Survey by the Society for Human Resource Management (SHRM) found that
in 74% of organizations rely on supervisor ratings. - Though supervisors may not
see every minute of an employee's behavior, they do see the end result.

• Peers - Whereas supervisors see the results of an employee's efforts, peers often
see the actual behavior. - Peer ratings usually come from employees who work
directly with an employee - Research has shown that peer ratings are fairly reliable
only when the peers who make the ratings are similar to and well acquainted with
the employees being rated (Mumford, 1983).

• Subordinates - Subordinate feedback (also called upward feedback) is an

important component of 360-degree feedback, as subordinates can provide a very
different view about a supervisor's behavior. - Subordinate ratings can be difficult to
obtain because employees fear a backlash if they unfavorably rate their supervisor,
especially when a supervisor has only one or two subordinates.

• Customers - customers provide feedback on employee performance by filing

complaints or complimenting a manager about one of her employees. - Formally,
customers provide feedback by completing evaluation cards.

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Step 4: Select the Best Appraisal Methods to Accomplish Your Goals

Prior to developing the actual performance appraisal instrument, two important

decisions must be made

• Decision 1: Focus of the Appraisal Dimensions

- the appraisal dimensions can focus on traits, competencies,
task types, or goals. –
• Decision 2: Should Dimensions Be Weighted?
- Whether the dimensions should be weighted so that some are
more important than others.

Use of Employee Comparisons, Objective Measures, or Ratings

Once the types of dimensions have been considered, the next decision is whether
to:

1. Evaluate performance by comparing employees with one another (ranking),

2. Using objective measures such as attendance and number of units sold, or

3. Having supervisors rate how well the employee has performed on each of the
dimensions

EMPLOYEE COMPARISONS: RANKING METHOD

• Ranking Method - To reduce leniency, employees can be compared with one

another instead of being rated individually on a scale. The easiest and most
common of these methods is the rank order.
- employees are ranked in order by their judged performance for
each relevant dimension

•Paired Comparison - This method involves comparing each possible pair of

employees and choosing which one of each pair is the better employee.

• Forced Distribution – As predetermined percentage of employees are placed

in each category.

• OBJECTIVE MEASURES - A second way to evaluate

performance is to use what are commonly called objective,

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or hard, criteria. Common types of objective measures include quantity of work,

quality of work, attendance, and safety.

Step 5: Train Raters

• Frame-of-reference training provides raters with job-related information, practice

in rating, and examples of ratings made by experts as well as the rationale
behind those expert ratings
• It increases rater accuracy and reduced rater errors
• The better that employees understand the performance appraisal system, the
greater is their satisfaction with the system

Step 6: Observe and Document Performance

• The next step in the performance appraisal process is for supervisors to observe
employee behavior and document critical incidents as they occur.

• Critical incidents are examples of excellent and poor employee performance.

• Critical incidents should be communicated to the employee at the time they

occur.

The importance of documentation:

1. Documentation forces a supervisor to focus on employee behaviors rather than

traits

2. Documentation helps supervisors recall behaviors when they are evaluating

performance

3. Documentation provides examples to use when reviewing performance ratings

with employees.

4. Documentation helps an organization defend against legal actions taken against

it by an employee.

Step 7: Evaluate Performance

 Completing the Rating Form

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1. Once critical - incident logs have been read and objective data reviewed, the
supervisor is ready to assign performance appraisal ratings.
2. While making these ratings, the supervisor must be careful not to make
common rating errors involving distribution, halo, proximity, and contrast.
 Leniency error – because certain raters tend to rate every employee at the
upper end of the scale regardless of the actual performance of the employee.
 Central Tendency Error - results in a supervisor rating every employee in the
middle of the scale.
 Strictness Error - rates every employee at the low end of the scale.
 Halo Errors - A halo error occurs when a rater allows either a single attribute or
an overall impression of an individual to affect the ratings that she makes on
each relevant job dimension.
 Proximity Errors - occur when a rating made on one dimension affects the
rating made on the dimension that immediately follows it on the rating scale.
 Contrast Errors - The performance rating one person receives can be
influenced by the performance of a previously evaluated person.

Step 8: Communicate Appraisal Results to Employees

 Perhaps the most important use of performance - evaluation data is to

provide feedback to the employee and assess her strengths and weaknesses
so that further training can be implemented.
 Normally, in most organizations a supervisor spends a few minutes with
employees each year to tell them about the scores they received during the
most recent evaluation period.
 Dealing with negative feedback
 Feedback sandwich - negative feedback is sandwiched between
positive feedback

Step 9: Terminate Employees Legal Reasons for Terminating Employees

1. Probationary Period
2. Violation of Company Rules

• Rule against a particular behavior must actually exist.

• If a rule exists, a company must prove that the employee knew the
rule

• Ability of the employer to prove that an employee actually violated

the rule. Rule has been equally enforced.

• Inability to Perform

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1. An organization will need to prove that the employee could not perform the
job and that progressive discipline was taken to give the employee an
opportunity to improve.
2. The organization must next demonstrate that there was a documented failure
to meet the standard. Such documentation can include critical-incident logs
and work samples.

• Terminating Employees. Reduction in Force (Layoff). Employees can be

terminated if it is in the best economic interests of an organization to do so.

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