USE (Investing in people Financial impact of Human Resources Initiatives by Cascio and Boudreau 2011)
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Chapter 10 – The payoff from Enhanced Selection
1) You are given the following information regarding the CAP test for clerical employees (clerk-2s) the Berol Corporation.
Average tenure as a clerk – 2:7.26years
Number selected per year:120
Validity of the CAP test: 0.61
Validity of previously used test: 0.18
Cost per applicant of CAP: $35
Cost per participant of old test: $18
SR: 0.50
Ordinate at SR: 0.399
SD, in the first year: 34,000
NOTE: Use Equation 10-1 (Measuring the Utility components -from investing in people Financial impact of Human Resources Initiatives by Cascio and Boudreau, 2011)to determine (a) the total utility of the CAP test (b) the Utility per selectee, and (c) the per year gain in utility per selected
2) Referring to exercise one above, suppose that after consulting with the chief financial officer t Berol, you are given the following additional information: Variable costs are -0.08, taxes are 40 percent, and the discount rate is 8 percent. Use equation 10-2 (Analytics: Calculating the Economic Adjustments -from investing in people the Financial impact of Human Resources Initiatives by Cascio and Boudreau, 2011)in this chapter to recomputed the total utility of the CAP test, the utility per selectee and the utility per selectee in the first year.
3) The top dollar Co. is trying to decide whether to us an assessment center to select middle managers for its consumer products operations. The following information has been determined: Variable costs are -0.10, corporate taxes are 44 percent, the discount rate is 9 percent, the ordinary selection procedure costs $700 per candidate, the assessment center costs $2,800 per candidate, the standard deviation of job performance is $55,000, the validity of the ordinary procedure is 0.30, the validity of the assessment center is 0.40, the selection ratio is 0.20, the Ordinate at that selection ratio is 0.2789, and the average tenure as a middle manager is 3 years. The program is designed to last 6 years, with 20 managers added each year. Beginning in year 4, however, one cohort separates each year until all hire from the program leave.
NOTE: Use equation 10-6 (Analytics: Calculating How Employee flows affect specific situations -from investing in people the Financial impact of Human Resources Initiatives by Cascio and Boudreau, 2011)
to determine whether the top dollar Co should adopt the assessment center to select middle managers. What payoffs can be expected in total, per selectee, and per selected in the first year?
PLEASE NOTE solve problems 1-3 PERFORM ALL YOUR CALCULATIONS BY HAND OR USING EXCEL the detailed answers should include all calculations in typed face not with pen or pencil – due on Wednesday, Nov 8, 2017
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