In their critique of N.S. Raju, M.J. Burke, and J. Normand's (1990) ut
ility model, M.K. Judiesch, F.L. Schmidt, and J.E. Hunter (1993) claim
ed that Raju et al. simply shifted the problem from one of estimating
the standard deviation of the dollar-valued performance (Y) to that of
estimating the coefficient of variation (sigma(y)/mu(y)). In showing
the inaccuracy of this claim, the authors demonstrate that Judiesch et
al.'s misunderstandings of the underlying assumptions of Raju et al.'
s model have led to their misinterpretations. Furthermore, the authors
refute Judiesch et al.'s contentions that (a) the A parameter in Raju
et al.'s model is equal to average employee value and (b) it is appro
priate to correct the validity coefficient for criterion unreliability
when conducting a utility analysis. A more detailed discussion of the
issues relating to transforming the original performance scale is off
ered.