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 respo nding to the financial context of managerial decisions (Boudreau, 1983 a, 1983b; Cronshaw and Alexander, 1985, 1991). We demonstrate that tra ditional estimates of selection utility also fail to reflect the strat egic context faced by managerial decision makers. We modify the tradit ional BCG model to yield an estimate of total utility derived from hum an resources (U-total) that can be directly compared to firms' strateg ic need at a particular point in time (U-target) Further, we demonstra te that, while strategic need is rarely constant over time, the capaci ty of a selection system to meet that need is also likely to change as r(xy) and SDy change over time. Re-examination of what is important t o strategic human resource decision makers (selection utility vs. tota l utility and strategic need) and changing selection system contributi ons over time yields a more realistic view of how firms benefit from p ersonnel selection.