Who Does Referral-Based Hiring Help Most, and How?

9323706832_efbf0759ba_zReferral-based hiring is a commonplace practice for modern organizations, which holds considerable benefits for employees hired based upon a referral, including greater chances for upward mobility within the company. A recent paper published in ILR Review entitled “Lasting Effects? Referrals and Career Mobility of Demographic Groups in Organizations,” further studies the benefits of referral based hiring, and finds that the positive impact does not effect different demographic groups equally. Rather, authors Jennifer Merluzzi and Adina Sterling find that referral-based hiring provides the biggest increase in promotional opportunities for racial minorities. The abstract for the paper:

While prior research has suggested that network-based hiring in the form of referrals can lead to better career outcomes, few studies have tested whether such career advantages differ across demographic groups. Using archival data from a single organization for nearly 16,000 employees over an 11-year period, the authors examine the effect of hiring by referrals on the number of promotions employees receive and Current Issue Coverthe differences in this effect across demographic groups. Drawing on theories of referral-based hiring, inequality, and career mobility, they argue that referral-based hiring provides unique promotion advantages for minorities compared to those hired without a referral. Consistent with this argument, they find that referrals are positively associated with promotions for one minority group, blacks, even after controlling for individual and regional labor market differences. The authors explore the possible mechanism for this finding, with initial evidence pointing to referrals providing a signal of quality for black employees. These results suggest refinement to prior research that attests that referral-based hiring disadvantages racial minorities.

You can read “Lasting Effects? Referrals and Career Mobility of Demographic Groups in Organizations” from ILR Review free for the next two weeks by clicking here. Want to stay current on all of the latest research from ILR Review? Click here to sign up for e-alerts!

*Image attributed to Cydcor (CC)

Beyond Developmental: The Decision-Making Applications of Personality Tests

5529311561_4ba9be7419_zThe use of personality assessments in organizations has often been limited to developmental applications. However, growing support for data-driven decision-making in recent years has made it apparent that personality assessments could also become a resource for talent management decisions. In a recent paper from Journal of Applied Behavioral Science entitled “Does Purpose Matter? The Stability of Personality Assessments in Organization Development and Talent Management Applications Over Time”, authors Allan H. Church, Christina R. Fleck, Garett C. Foster, Rebecca C. Levine, Felix J. Lopez, and Christopher T. Rotolo investigate the consistency of personality data over time and whether the changing application of personality assessments changes their validity. The abstract for the paper:

Personality assessment has a long history of application in the workplace. While the field of organization development has historically focused on developmental aspects of personality tools, other disciplines such as industrial-organizational psychology have emphasized its psychometric properties. The importance of data-driven insights for talent management (e.g., the identification of high potentials, succession Current Issue Coverplanning, coaching), however, is placing increasing pressure on all types of applied behavioral scientists to better understand the stability of personality tools for decision-making purposes. The current study presents research conducted with 207 senior leaders in a global consumer products organization on the use of personality assessment data over time and across two different conditions: development only and development to decision making. Results using three different tools (based on the Hogan Assessment Suite) indicate that core personality and personality derailers are generally not affected by the purpose of the assessment, though derailers do tend to moderate over time. The manifestation of values, motives, and preferences were found to change across administrations. Implications for organizational development and talent management applications are discussed.

You can read the paper, “Does Purpose Matter? The Stability of Personality Assessments in Organization Development and Talent Management Applications Over Time,” from Journal of Applied Behavioral Science free for the next two weeks by clicking here. Want to stay current on all of the latest research published by Journal of Applied Behavioral ScienceClick here to sign up for e-alerts!

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Read the November 2016 Issue of Journal of Management!

3340359442_b93f0f9aa9_o-1The November 2016 issue of Journal of Management is now available online, and can be accessed for the next 30 days! The November issue covers a variety of topics, including articles on organizational transparency, shared leadership-team performance relations, and the effects of autonomy on team performance.

Authors Anthony J. Nyberg, Jenna R. Pieper, and Charlie O. Trevor contributed the article “Pay-for-Performance’s Effect on Future Employee Performance: Integrating Psychological and Economic Principles Toward a Contingency Perspective,” which suggests that bonus pay may have a stronger effect on future performance than merit pay, among other findings about pay-for-performance. The abstract for the paper:

Although pay-for-performance’s potential effect on employee performance is a compelling issue, understanding this dynamic has been constrained by narrow approaches to pay-for-performance conceptualization, measurement, and surrounding conditions. In response, we take a more nuanced perspective by integrating fundamental principles of economics and psychology to identify and incorporate employee characteristics, job characteristics, pay system Current Issue Covercharacteristics, and pay system experience into a contingency model of the pay-for-performance–future performance relationship. We test the role that these four key contextual factors play in pay-for-performance effectiveness using 11,939 employees over a 5-year period. We find that merit and bonus pay, as well as their multiyear trends, are positively associated with future employee performance. Furthermore, our findings indicate that, contrary to what traditional economic perspectives would predict, bonus pay may have a stronger effect on future performance than merit pay. Our results also support a contingency approach to pay-for-performance’s impact on future employee performance, as we find that merit pay and bonus pay can substitute for each other and that the strength of pay-for-performance’s effect is a function of employee tenure, the pay-for-performance trend over time, and job type (presumably due to differences in the measurability of employee performance across jobs).

Another article from the issue, entitled “Social Media for Selection? Validity and Adverse Impact Potential of a Facebook-Based Assessment” from authors Chad H. Van Iddekinge, Stephen E. Lanivich, Philip L. Roth, and Elliott Junco delves into the hazards that arise when recruiters use social media platforms like Facebook to screen job applicants. The abstract for the paper:

Recent reports suggest that an increasing number of organizations are using information from social media platforms such as Facebook.com to screen job applicants. Unfortunately, empirical research concerning the potential implications of this practice is extremely limited. We address the use of social media for selection by examining how recruiter ratings of Facebook profiles fare with respect to two important criteria on which selection procedures are evaluated: criterion-related validity and subgroup differences (which can lead to adverse impact). We captured Facebook profiles of college students who were applying for full-time jobs, and recruiters from various organizations reviewed the profiles and provided evaluations. We then followed up with applicants in their new jobs. Recruiter ratings of applicants’ Facebook information were unrelated to supervisor ratings of job performance (rs = −.13 to –.04), turnover intentions (rs = −.05 to .00), and actual turnover (rs = −.01 to .01). In addition, Facebook ratings did not contribute to the prediction of these criteria beyond more traditional predictors, including cognitive ability, self-efficacy, and personality. Furthermore, there was evidence of subgroup difference in Facebook ratings that tended to favor female and White applicants. The overall results suggest that organizations should be very cautious about using social media information such as Facebook to assess job applicants.

You can read these articles and more from the November 2016 issue of Journal of Management, which is free for the next 30 days, by clicking here to view the issue’s table of contents! Want to stay current on all of the latest research published by Journal of Management? Click here to sign up for e-alerts to receive notifications for new issues and Online First articles!

*City image attributed to Mark Goebel (CC)

Understanding Vocational Education in Industrialized Countries

[We’re pleased to welcome Nuria Rodriguez-Planas. Nuria published an article in ILR Review in March  2015, entitled 14138116143_b385d032d2_z“A Road Map to Vocational Education and Training in Industrialized Countries” with co-authors Werner Eichhorst, Ricarda Schmidl and Klaus F. Zimmermann.]

Our contribution to the ILR Review was motivated by a background study of IZA contributing to the Worldbank’s World Development Report on Jobs in 2013. We started from the observation that young people have been among those most affected by the 2008/09 financial crisis and its aftermath in many world regions. While the recession led to steep increases in youth unemployment, policies aimed at stimulating labor demand do not fully tackle the root of the problem. Rather, we also need to understand the institutions governing the transition from school to work. Vocational education and training (VET) is often viewed as the silver bullet for the youth joblessness problem. In ILR_72ppiRGB_powerpointthis article, we provide a better understanding of VET in industrialized countries, proposing a typology with three types of vocational systems: 1) vocational and technical schools, 2) formal apprenticeships, and 3) dual apprenticeship systems that combine school training with a firm-based approach. We first describe the strengths and challenges of each system. Then we review the evidence of the effectiveness of VET versus general education and the relative effectiveness of the different VET systems. In our view the results indicate that VET is a valued alternative beyond the core of general education and that the use of apprenticeships combined with institutional learning tends to be more effective than school-based VET. Hence, improving the performance of VET can be one element of a medium-run solution to difficult school-to-work transitions.

The abstract for the paper:

Young people have been among those most affected by the recent financial crisis. Vocational education and training (VET) is often viewed as the silver bullet for the youth joblessness problem. In this article, the authors provide a better understanding of VET in industrialized countries, proposing a typology with three types of vocational systems: 1) vocational and technical schools, 2) formal apprenticeships, and 3) dual apprenticeship systems that combine school training with a firm-based approach. They first describe the strengths and challenges of each system. They subsequently review the evidence of the effectiveness of VET versus general education and the relative effectiveness of the different VET systems. Results indicate that VET is a valued alternative beyond the core of general education and that the use of apprenticeships combined with institutional learning tends to be more effective than school-based VET.

You can read “A Road Map to Vocational Education and Training in Industrialized Countries” from ILR Review free for the next two weeks by clicking here. Want to know all about the latest research from ILR ReviewClick here to sign up for e-alerts!

*Image attributed to UC Davis College of Engineering (CC)

*Werner Eichhorst is affiliated with IZA. Núria Rodríguez-Planas is affiliated with Queens College of CUNY and the Institute for the Study of Labor (IZA). Ricarda Schmidl is affiliated with the University of Mannheim and IZA. Klaus F. Zimmermann is affiliated with IZA and Bonn University. We thank Costanza Biavaschi, Corrado Giulietti, Michael Kendzia, Alexander Muravyev, Victoria Finn, and Janneke Pieters for their input and support. Inquiries can be directed to nrodriguezplanas@gmail.com or Eichhorst@iza.org.

How Does Difficulty of Recruitment Impact Discrimination Against Applicants?

16459686135_28e21592cd_z[We’re pleased to welcome Stijn Baert of Ghent University. Stijn published an article in ILR Review entitled “Is There Less Discrimination in Occupations Where Recruitment Is Difficult?,” with co-authors Bart Cockx, Niels Gheyle, and Cora Vandamme.]

Do employers discriminate less when vacancies are difficult to fill? Theory says yes. Lower arrival rates of employees at vacancies increase the cost of discriminating because the foregone output when a minority worker is turned away is higher in that case. In this study, we are the first to test this theoretical relationship between hiring discrimination and labor ILR_72ppiRGB_powerpointmarket tightness in an empirical way. To this end, we sent out fictitious job applications of school-leavers, randomly assigned to individuals with a native- and a Turkish-sounding name, to vacancies for jobs requiring no work experience in Belgium. We found indeed that, compared to natives, candidates with a Turkish-sounding name are equally often invited to a job interview if they apply for occupations for which vacancies are difficult to fill; but, they have to send twice as many applications for occupations for which labor market tightness is low.

The abstract for the paper:

The authors empirically test the cross-sectional relationship between hiring discrimination and labor market tightness at the level of the occupation. To this end, they conduct a correspondence test in the youth labor market. In line with theoretical expectations, results show that, compared to natives, candidates with a foreign-sounding name are equally often invited to a job interview if they apply for occupations for which vacancies are difficult to fill; but, they have to send out twice as many applications for occupations for which labor market tightness is low. Findings are robust to various sensitivity checks.

You can read “Is There Less Discrimination in Occupations Where Recruitment Is Difficult?” from ILR Review free for the next two weeks by clicking here. Want to know all about the latest research from ILR ReviewClick here to sign up for e-alerts!

*Career fair image attributed to Global Health Fellows Program II (CC)

Whitened Résumés: How Race and Diversity Impacts the Application Process

4818650660_8e0cfee0de_zWhat do employers look for in job applications? This is an essential question for job seekers, and depending upon how an employer represents their hiring practices, it may determine how job applicants choose to represent themselves in their applications. When it comes to race and diversity, this can be an especially complex matter, especially for applicants considering résumé whitening. In the recent Administrative Science Quarterly article, “Whitened Résumés: Race and Self-Presentation in the Labor Market,” authors Sonia K. Kang, Katherine A. DeCelles, András Ticsik, and Sora Jun consider how the presentation of an employer’s hiring practices directly impacts how applicants choose to represent themselves. The abstract for their paper:

Using interviews, a laboratory experiment, and a résumé audit study, we examine racial minorities’ attempts to avoid anticipated discrimination in labor markets by concealing or downplaying racial cues in job applications, a practice known as “résumé whitening.” Interviews with racial minority university students reveal that while some minority job seekers reject this practice, others view it as essential and use a variety of whitening techniques. Building on the qualitative findings, we conduct a lab study to examine how racial minority job seekers change their résumés in response to different job postings. Results show that when ASQ Covertargeting an employer that presents itself as valuing diversity, minority job applicants engage in relatively little résumé whitening and thus submit more racially transparent résumés. Yet our audit study of how employers respond to whitened and unwhitened résumés shows that organizational diversity statements are not actually associated with reduced discrimination against unwhitened résumés. Taken together, these findings suggest a paradox: minorities may be particularly likely to experience disadvantage when they apply to ostensibly pro-diversity employers. These findings illuminate the role of racial concealment and transparency in modern labor markets and point to an important interplay between the self-presentation of employers and the self-presentation of job seekers in shaping economic inequality.

You can read “Whitened Résumés: Race and Self-Presentation in the Labor Market” from Administrative Science Quarterly free for the next two weeks by clicking here. Want to know all about the latest research from Administrative Science QuarterlyClick here to sign up for e-alerts!

During the month of April, you can access 1.5 million article across SAGE Publishing’s 940+ journals for free–how? Sign up here for free trial access!

*Career fair image credited to Michael Starghill, Partnership for Public Service (CC) 

Do Applicant Reactions to Selection Systems Matter? Let Us Count the Ways…

16719524657_06f8bd29de_z[We’re pleased to welcome Talya Bauer of Portland State University. Talya recently published an article in Group & Organization Management with co-authors Udo Konradt, Yvonne Garbers, Martina Boge, and Berrin Erdogan, entitled “Antecedents and Consequences of Fairness Perceptions in Personnel Selection: A 3-Year Longitudinal Study”]

  • So just what are applicant reactions and why should you care?

Applicant reactions refer to a class of perceptions that job applicants experience as they go through the selection process. It is posited that how employees feel about the job application process, and particularly their perceptions of fair treatment, relate to outcomes organizations care about, such as a lower likelihood of withdrawing one’s candidacy, more positive attitudes toward the employer, accepting the job offer, referring others to apply to the company, purchasing a company’s products, and lower likelihood of employment-related lawsuits.

In terms of research, applicant reactions really began in the 1980s. The topic gained traction in the 1990’s after the publication of Stephen Gilliland’s (1993) classic theory article on the topic. Following this model, and others which emerged around this time, researchers began studying the topic and found that procedural justice (aka the fairness of the processes used to make decisions) and distributive justice (aka the GOM_Feb_2016.inddfairness of what outcome you get) influenced how attractive employers were seen and how likely job candidates said they were to refer the employer to others and to take a job with the employer if offered one.

The following decade included a bit of a backlash against applicant reactions research with scholars debating how much it mattered and how long the effects of applicant reactions actually last. It was not until 2013 when we started to see strong evidence that applicant reactions do matter beyond pre-entry attitudes. McCarthy and colleagues (2013) found that reactions affected test scores which in turn influenced job performance in a variety of settings using both predictive and concurrent designs. However, it still was not clear that there was a direct relationship between applicant reactions and on-the-job performance.

A current study, “Antecedents and consequences of procedural justice perceptions in personnel selection: A three-year longitudinal study” by Udo Konradt, Yvonne Garbers, Martina Weber of the University of Kiel and two of us (Berrin Erdogan and Talya Bauer), which is in press at Group & Organization Management followed job candidates for an apprenticeship program of a large German industrial firm across three years. What was found was fascinating.  Perceptions of fairness that applicants felt during the testing and hiring process related to job offer acceptance as well as job performance at 18 months. At 36 months post-entry, no relationship existed. Performance included both written job knowledge and performing specific job tasks. This finding is consistent with work on new employee socialization which finds that different perceptions and aspects of adjustment matter differentially over time (Bauer & Erdogan, 2011).

  • So, what does this mean for employers and researchers?

Labor markets ebb and flow but what does not change is the competition for the best talent available. These individuals are always in demand and early applicant reactions research finds that it is the best applicants for whom applicant reactions matter the most. For example, Rynes and colleagues (1991) found that when applicants did not hear back from employers, it was the strongest applicants who had the most negative reactions. In total, we now know that applicant reactions matter across the job search spectrum as well as beyond. At least for apprentices, on-the-job performance was related to perceptions of fairness 18 months earlier. This opens up the door for researchers to continue to examine the larger constellation of factors associated with applicant reactions. It also offers a lever for organizations to enhance the perception of their employment brand and selection systems by systematically working through the types of procedural justice factors that matter to improve their brand.

You can read “Antecedents and Consequences of Fairness Perceptions in Personnel Selection: A 3-Year Longitudinal Study” from Group & Organization Management free for the next two weeks by clicking here. Want to know all about the latest research from Group & Organization ManagementClick here to sign up for e-alerts!

*Image credited to Nazareth College (CC)

References

Bauer, T. N., & Erdogan, B. (2011).  Organizational socialization:  The effective onboarding of new employees.  In S. Zedeck, H. Aguinis, W. Cascio, M. Gelfand, K. Leung, S. Parker, & J. Zhou (Eds.).  APA Handbook of I/O Psychology, Volume III, pp. 51-64.  Washington, DC:  APA Press.

Chan, D., & Schmitt, N. (2004).  An agenda for future research on applicant reactions to selection procedures: A construct-oriented approach. International Journal of Selection and Assessment, 12, 9-23.

Gilliland, S. J. (1993) The perceived fairness of selection systems: An organizational justice perspective. Academy of Management Review, 18, 694-734.

McCarthy, J. M., Van Iddekinge, C. H., Lievens, F., Kung, M.-C., Sinar, E. F., & Campion, M. A. (2013). Do candidate reactions relate to job performance or affect criterion-related validity? A multistudy investigation of relations among reactions, selection test scores, and job performance. Journal of Applied Psychology, 98, 701-719.

Ryan, A. M., & Ployhart, R. E. (2000). Applicants’ perceptions of selection procedures and decisions. Journal of Management, 26, 565-606.

Rynes, S. L., Bretz, R. D., & Gerhart, B. (1991). The importance of recruiting in job choice: A different way of looking. Personnel Psychology, 44, 487-521.


Talya Bauer photo 2015Talya N. Bauer (Ph.D., Purdue University) is the Cameron Professor of Management and Affiliated Professor of Psychology at Portland State University. She is an award-winning teacher and researcher and recipient of the SIOP Distinguished Teaching Award as well as the Academy of Management Human Resource division’s Innovations in Teaching Award. She conducts research about relationships at work including recruitment, applicant reactions to selection, onboarding, and leadership. Her work has been supported by grants from both the SHRM and SIOP Foundations and has been published in research outlets such as the Academy of Management Journal, Academy of Learning and Education Journal, Journal of Applied Psychology, Journal of Management, and Personnel Psychology. She has worked with dozens of government, Fortune 1000, and start-up organizations and has been a Visiting Scholar in France, Spain, and at Google Headquarters. She has served in elected positions including the HRM Executive Committee of the Academy of Management and Member-at-Large for SIOP. She currently serves as an Associate Editor for the Journal of Applied Psychology (and is the former Editor of Journal of Management). Her work has been discussed in the New York Times, BusinessWeek, Wall Street Journal, Harvard Business Review, USA Today, and NPR’s All Things Considered.  She is a fellow of the SIOP, the American Psychological Association, and Association for Psychological Science.

BerrinErdogan

Berrin Erdogan (Ph.D., University of Illinois at Chicago) is Express Employment Professionals Professor of Management and Affiliated Professor of Psychology at Portland State University. She conducts studies exploring factors that lead to engagement, well-being, effectiveness, and retention in the workplace, with a focus on manager-employee relationships and underemployment. These studies took place in a variety of industries including manufacturing, clothing and food retail, banking, health care, education, and information technology in the USA, Turkey, India, China, France, and Vietnam. Her work appeared in journals including Academy of Management Journal, Journal of Applied Psychology, Journal of Management, and Personnel Psychology and has been discussed in media outlets including the New York Times, Harvard Business Review, and the Oregonian. Dr. Erdogan has been a visiting scholar in Koç University (Istanbul, Turkey), ALBA Business School at the American College of Greece, and University of Valencia (Spain). In addition to serving on numerous editorial boards, she currently serves as an Associate Editor for Personnel Psychology, served as an Associate Editor for European Journal of Work and Organizational Psychology and is the co-editor of the forthcoming title Oxford Handbook of Leader-Member Exchange. She is a fellow of SIOP.

Prof. Dr. Udo KonradtUdo Konradt is full professor of work, organizational, and market psychology at Kiel University, Germany. He holds a doctoral degree in Psychology from the University of Bochum. He has published on information systems and Human Resource Management issues in several academic journals.

Yvonne Garbers

Yvonne Garbers is an assistant professor at Kiel University, Germany. She holds a PhD in work and organizational psychology (Kiel University). Her current research interests include (destructive) leadership, shared leadership, team-member exchange, and work-family interference.

Martina Boge finished her Major studies in Psychology at the University of Leipzig. She has worked as consultant and human resource manager for several years.

mccarthy_picJulie M. McCarthy (Ph.D., Western University) is an Associate Professor in the Department of Management and Rotman School of Management at the University of Toronto. Julie’s research examines how organizations can ensure that their policies and practices are viewed favorably by job applicants and employees. She also investigates strategies that individuals can use to reduce anxiety, build resilience and achieve success in their work and home lives. Her work is published in leading academic journals, including the Journal of Applied Psychology, Personnel Psychology, and Psychological Science, as well as book chapters in the influential Oxford Handbook Series. Her work is generously supported by funding from the Social Sciences and Humanities Research Council (SSHRC), and she has received numerous awards and recognitions for her research contributions. Julie’s work has also received a considerable amount of media attention. In the corporate sector, Julie has developed leadership resilience programs, performance management systems and personnel selection tools on behalf public and private corporations.