EXPANDING THE CONTEXT OF UTILITY: THE STRATEGIC IMPACT OF PERSONNEL SELECTION

Others have demonstrated that traditional applications of the Brogden-Cronbach-Gleser (BCG) selection utility formula are deficient in responding to the financial context of managerial decisions (Boudreau, 1983a, 1983b; Cronshaw & Alexander, 1985, 1991). We demonstrate that traditional estimates of selection utility also fail to reflect the strategic context faced by managerial decision makers. We modify the traditional BCG model to yield an estimate of total utility derived from human resources ( U_total ) that can be directly compared to firms' strategic need at a particular point in time ( U^target )-Further, we demonstrate that, while strategic need is rarely constant over time, the capacity of a selection system to meet that need is also likely to change as r_xy and SD_y change over time. Re-examination of what is important to strategic human resource decision makers (selection utility vs. total utility and strategic need) and changing selection system contributions over time yields a more realistic view of how firms benefit from personnel selection.