[IPAC-List] Utility Analysis

[Patrick McCoy]

Let's get another interesting discussion going!

The last time I had a chance to do some reading on utility, researchers were calculating the financial advantage of using selection tools using formulae such as the following:


U = (Ns) (SDy) (rxy) (Zx) (T) minus (C)

U = Utility
Ns = Number selected
Sdy = Variability in performance of job incumbents (in dollars)
rxy = Validity of assessment tool
Zx = The cutoff score expressed in terms of Z scores 
T =  Average tenure of those hired

C = Cost of developing and using the assessment instrument per applicant


Was wondering if any of you know whether there have been refinements to approaches like the one in the formulae.  Is there anything better out there?

Thank you,

Pat McCoy, Ph.D.
Ottawa, Canada