MANA 4328

Homework #3: Measurement

Scenario 1: Adverse Impact Analysis

Yellow Blaze Candle Shops provide a full line of various types of candles and accessories such as candle holders. There are 150 shops located in shopping malls around the country. There are over 600 salespeople staffing these stores, each of whom has a full time manager. Staffing the manager’s position, by policy, must occur by promotion from the sales staff. The company is interested in improving its identification of sales people most likely to be successful store managers. It has developed a special technique for assessing and rating the suitability of salespeople for the manager’s job.

To experiment with this technique, the regional HR department representative met with the store managers in the region to review and rate the promotion suitability of each of the manager’s salespeople. They reviewed sales results, customer service orientation, and knowledge of store operations for each salesperson and then assigned a 1 to 3 promotion suitability rating (1= not suitable, 2= suitable in the future, and 3=suitable now). A total promotion suitability (PS) score ranging from 3 to 9 was then computed for each person.

The PS scores were gathered, but not formally used in promotion decisions, for all the salespeople. Over the past year 30 salespeople have been promoted to store manager. Now it is time for the company to preliminarily investigate the validity of the PS scores and to see if their use might lead to the occurrence of adverse impact against women or minorities. Each store manager’s annual overall performance rating, ranging from 1 (low performance) to 5 (high performance) was used as the criterion measure in the validation study. They found the correlation between PS scores and Performance Ratings to be r = .407.

Based on these data answer the following questions:

1.  Is the PS score a valid predictor of performance as a store manager? Why or why not?

2.  With a cutoff score of 7 on the PS, would its use lead to adverse impact against women or minorities?

3.  Would you recommend the PS score be used in the future to select sales people for promotion to store manager?

Employee ID / PS Score / Performance / Sex / Minority
11 / 9 / 5 / M / 0
12 / 9 / 5 / F / 0
13 / 9 / 1 / F / 0
14 / 9 / 5 / M / 1
15 / 8 / 4 / F / 1
16 / 8 / 5 / F / 0
17 / 8 / 4 / M / 0
18 / 8 / 5 / M / 0
19 / 8 / 3 / F / 0
20 / 8 / 4 / M / 0
21 / 7 / 5 / F / 0
22 / 7 / 3 / M / 1
23 / 7 / 4 / M / 0
24 / 7 / 3 / F / 0
25 / 7 / 3 / F / 0
26 / 7 / 4 / M / 0
27 / 7 / 5 / M / 0
28 / 6 / 4 / F / 0
29 / 6 / 4 / M / 0
30 / 6 / 2 / F / 1
31 / 6 / 3 / F / 1
32 / 6 / 3 / M / 0
33 / 6 / 5 / M / 0
34 / 6 / 5 / F / 0
35 / 5 / 3 / M / 0
36 / 5 / 3 / F / 1
37 / 5 / 2 / M / 1
38 / 4 / 2 / F / 1
39 / 4 / 1 / M / 1
40 / 3 / 4 / F / 0


Scenario 2:Interpreting Confidence Intervals

Answer the following questions based on the results of the selection test described in the table below:

Mechanical Ability Test

Scored 0 to 100

Average = 80

Standard Deviation = 4.5

Reliability r = .96

Test Score
Applicant #1 / 89
Applicant #2 / 86
Applicant #3 / 81
Applicant #4 / 70
Applicant #5 / 65

4.  What is the standard error of measurement for this mechanical ability test?

5.  What are the upper and lower bounds of a 95% confidence interval around each applicant’s test score? How should the 95% confidence intervals are be interpreted?

6.  Can we safely conclude that Applicant #2 has higher mechanical ability than applicant #3?

7.  Can we safely conclude that Applicant #3 has higher mechanical ability than applicant #4?

8.  If a minimum passing score is set at 80, which applicants can we safely conclude are qualified for the position?