Dependence of the relative productivity gains of two personnel selection tests on the applicant pool size

Abstract

Schmidt, Hunter, McKenzie, and Muldrow (1979) have recently demonstrated how the use of a new test, which differed from a previous test in terms of validity and/or per applicant cost, could result in impressive gains in productivity (utility). This paper focuses on the consequences of changing the applicant pool size (keeping the number of selectees fixed) on the relative productivity gains of the two tests. It is shown that the utility gain may be larger for one test than for the other for part of the range of possible applicant pool sizes and smaller for the rest of that range. Methods are described for determining for any two tests (1) whether such a reversal can occur and (2) the range of applicant pool sizes leading to greater utility gains for each test over the other. An implication is that the choice of a test should be contingent on an analysis of the relative productivity gains of the competing procedures for the available applicant pool sizes.