THE FUTILITY OF UTILITY ANALYSIS

In a study involving 143 experienced managers, utility analysis was found to influence managerial decision making, but not in the way intended by advocates of this technique. Utility analysis reduced the support of managers for implementing a valid selection procedure, even though the analysis indicated that the net benefits from the new procedure were substantial. In light of these findings, industrial/organizational psychologists are advised to reconsider their assumptions regarding the information managers use when managers make human resource policy decisions.     

THE FUTILITY OF UTILITY ANALYSIS REVISITED: WHEN EVEN AN EXPERT FAILS

The effect of utility analysis on managerial decisions regarding the use of a valid selection test was investigated. Experienced managers ( n = 41) were randomly assigned to one of three conditions. The control condition contained written advice to adopt new selection procedures from a hypothetical psychologist that included an explanation of validation procedures. The second condition contained the same written information and advice as the control condition plus written support of that advice from a hypothetical trusted adviser. The third condition contained all the material that was presented in the control condition plus a written explanation of utility analysis, an actual utility analysis showing that large financial benefits would flow from using the proposed procedures, and a video-taped presentation from an expert on utility analysis where the logic underlying utility analysis and its benefits were explained. The expert was then presented live to the audience to address any questions that might have arisen from the utility analysis or the video. An ANOVA revealed that the presentation of a positive utility analysis reduced support for implementing a valid selection procedure, even though the logic and merits of utility analysis as a decision-making tool were described by an internationally recognized authority.