Personnel Psychology

Personnel psychology is a subfield within industrial, work, and organizational psychology that is concerned with the application of psychological theories, methods, and research findings to the personnel functions in organizations. Primary functions include recruitment, selection, training, performance appraisal and feedback, and compensation. This article focuses on the research applications to these functions and outlines the current themes in personnel psychology.

Recruitment refers to the organizational activities and processes aimed at providing information to a pool of potential candidates to attract them to apply for job openings in an organization. In the development of recruitment strategies, personnel practitioners must address important factors such as features of the relevant labor market for the job, the recruitment message and information to be communicated, and the specific recruitment methods to be used for the communication. The bulk of the recruitment research in personnel psychology is concerned with candidate perceptions of recruitment processes. These perceptions are of practical importance because candidates with negative perceptions may decide to withdraw from the application and selection process. Findings from previous studies suggest that although job attributes constitute the most important factor in affecting candidates’ reactions and job choice behaviors, candidate perceptions of recruitment activities and the recruiter may also affect reactions and associated behavioral intentions such as intent to apply for employment in the organization or to recommend it to others.

There is some evidence that candidates tend to make inferences about the organization (e.g., leadership style) by extrapolating from perceived recruiter behaviors. Another interest among personnel psychologists doing recruitment research is in the area of realistic job previews. The purpose of realistic job previews is to provide applicants with ‘‘true’’ information about the job and work environment (i.e., as the job incumbents actually experience them) rather than presenting the job and organization in ‘‘public relations’’ terms tomaximize job and organizational attractiveness. The rationale is that the failure to present realistic job previews will lead to unrealistic, and hence subsequently unmet, expectations among newcomers (i.e., applicants who accepted the job offer) that, in turn, will have a negative impact on satisfaction, commitment, and motivation.

Personnel selection refers to the process of testing and evaluating job applicants for the purpose of determining the subset of applicants to whom job offers will be made. The majority of personnel selection research is concerned with the extent to which different selection predictors (i.e., instruments) can predict job performance and other job-relevant outcomes such as job satisfaction, organizational commitment, and intent to quit. The selection predictors that have been widely researched and used in practice include cognitive ağabeylity tests, personality measures, biodata measures, interviews, and assessment centers. Recently, there has been increasing interest in the research and use of situational judgment tests, which is one type of work simulation. Comprehensive reviews of the validity evidence of selection predictors in predicting job performance and other job-relevant outcomes were provided by Salgado and colleagues in 2001 and by Schmitt and Chan in 1998. The search for valid selection predictors needs to be driven by the nature of the criterion of interest. For example, with respect to job performance, the criterion space can be decomposed into specific areas of task requirements and specific knowledge/ skill/ability requirements. In addition, the job performance criterion can be decomposed into distinct performance constructs such as typical versus maximum performance, task versus contextual performance, and routine versus adaptive performance. Each specific performance construct can, in turn, be construed in terms of multiple dimensions; for example, contextual performance can be construed in terms of interpersonal facilitation and job dedication. The validity of a selection predictor is dependent on the specific performance criterion variable in question.

In making selection decisions, it is possible to use more than one predictor, that is, to use a battery of selection tests. One major issue that needs to be addressed when using selection predictors in a test battery concerns incremental validity, which refers to how much gain in prediction power is obtained by adding the new predictor to the existing predictor(s). Issues of incremental validity have focused on effects of predictor–criterion correlations and intercorrelations among predictors. All other things equal, incremental validity is increased when the new predictor is highly correlated with the criterion but is lowly correlated with the existing predictor(s). Another major issue concerns the joint effects of the combined use of predictors on subgroup differences in overall selection score. Research has shown that adding a new predictor with a small subgroup difference (or no difference) to an existing predictor with a large subgroup difference is unlikely to lead to any substantial reduction in subgroup difference on the composite selection score. Special topics in personnel selection include test bias (e.g., whether a test predicts similarly for applicants from different demographic groups), applicant reactions (e.g., what characteristics of the selection system would influence the degree to which applicants perceive the selection as fair), selection for staffing teams (e.g., what competencies can be tested to predict how applicants would function when working in teams), and validity changes associated with dynamic criteria (e.g., how the validity of a selection test is affected when the components of effective job performance change over time). Many of these topics were summarized by Guion in 1998 and by Schmitt and Chan in 1998.

Training refers to the systematic and typically formal process of employee acquisition or learning of job competencies— knowledge, skills, abilities, and attitudes— that would enhance job performance. The training environment may range from artificial or contrived settings (e.g., classroom lectures, role-play exercises) to highly realistic settings (e.g., on-the-job training in which the learning environment is nearly identical to the actual work environment). Regardless of the setting, the underlying assumption is that job competencies are malleable and alterable through training. The goal of training research is to identify appropriate interventions that can positively affect employees’ target attitudes and behaviors so that the employees can meet the demands of the target job. Training research typically follows the framework provided by the instructional systems design (ISD) model that emphasizes three key interrelated components of the training process: training needs assessment, training design, and training evaluation. In training needs assessment, the primary goal is to provide information on what, where, when, and who. The information gathered also serves as input for the subsequent stages of the training process, that is, training design and evaluation. The strategies to gather information may include organizational analysis to determine where training is needed; job analysis to identify the nature of the job tasks, the underlying job competencies, and the performance standards required for successful task performance; and person analysis to determine performance gaps between potential trainees’ performance and expected performance levels. Training design is concerned with specifying instructional objectives, sequencing training materials, incorporating learning principles, and identifying effective training methods.

There is an increasing consensus among training researchers that a training program is more effective when trainees are given the opportunity to produce the capability, when the training environment enhances trainee self-efficacy and expectations that the training will be effective in leading to acquisition of valued learning outcomes, and when performance feedback given to trainees is credible, accurate, constructive, and timely. Training researchers also appear to agree that the effectiveness of training methods is a function of the properties of the method, the nature of the training content, and the person characteristics of the trainees. For example, declarative knowledge is better acquired through classroom instruction, whereas procedural knowledge is better acquired through work simulations. However, more empirical research is needed, and advances in training research are likely to be led by rigorous studies that establish empirical interactions linking training method, training content, and trainee characteristics. Training evaluation refers to the assessment of the degree to which trainees achieved the anticipated gains in job competencies from training and effectively applied these gains to the actual job. To measure these gains and conduct an adequate training evaluation, training objectives and the intended training outcomes must be explicitly specified in ways that allow their valid measurement. An excellent overview of the typical problems in evaluating training and the alternative ways in which to assess gains was provided by Goldstein and Ford in 2002.

The ISD model, which is based on design principles derived from research findings on performance on simple tasks that require little complex cognitive processing, is somewhat deficient as a theoretical framework for training in jobs that are made up of ill-defined problems and cognitively complex tasks. Recently, several researchers have proposed more holistic approaches. These approaches involve applying cognitive constructs and principles to the training process and recognizing the multifaceted nature of the learning process by expanding the criterion space to include cognitive, skill-based, and affective learning outcomes. This cognitive-oriented and holistic context, grounded in the theory and empirical findings from cognitive psychology research, led to significant conceptual and measurement advances in training research. Many of these advances are related to the conceptualization of expertise and the measurement of metacognitive skills and knowledge structures.

Performance appraisal refers to the evaluation associated with a rater’s evaluative judgment of the effectiveness of an employee’s job performance. Performance feedback refers to the information an employee receives concerning a rater’s evaluative judgment of the employee’s performance and the way in which the information is

In performance appraisal, the performance measure can be either objective or subjective. Examples of objective measures include dollars sold and number of units produced or contracts secured. Some objectivemeasures, such as number of complaints received and days absent from work, are negatively scored. Examples of subjective measures include qualitative judgment of the creativity of work products and supervisor or peer ratings of overall job performance. The vast majority of early research on performance appraisal has focused on subjective measures and examined issues such as the various types of appraisal rating scales, rater accuracy, rater errors, and the cognitive processes underlying appraisal judgments made by raters. Despite the rater training implications of these findings, there is no clear evidence that rater training based on these streams of research has in fact contributed to increased effectiveness of actual performance appraisal systems in organizations. One explanation for the apparent futility of early studies is that the researchers’ focus on rating scales, rater accuracy and errors, and rater cognitive processes is somewhat misplaced because the researchers have neglected the central elements of the appraisal system, including the rater’s motivational context and the employee’s (i.e., ratee’s) perspectives and reactions. This gap was filled by several subsequent streams of research focusing on motivational structures and rater–ratee relationships such as effects of rating purpose, accountability, and rater–ratee similarity on ratings and effects of organizational climate, perceived organizational support, and leader–member Exchange relationships on appraisal reactions. One productive stream of research came from Greenberg’s application of organizational justice research to performance appraisal in 1986. Studies by Greenberg and other researchers have identified a variety of aspects of the appraisal process and outcome (e.g., soliciting and using input prior to appraisal, ability to challenge appraisal) that affect justice perceptions about the appraisal. Most attention has been directed toward employee participation or voice in the appraisal and feedback process. In addition to identifying the antecedents of justice perceptions, researchers have examined the influence of justice perceptions on a number of attitudinal and behavioral outcomes (e.g., organizational commitment). Current research has adopted a broader perspective by locating the appraisal process in the larger context of the performance management system in an organization. This system refers to the interrelationships linking appraisal system development, appraisal processes, and feedback processes.

There has been increasing interest in ‘‘360-degree’’ assessment/feedback systems, where the central idea is to obtain appraisals on the same employee from multiple sources (typically supervisors, peers, and subordinates). Such systems have unique features involving multiple sources and perspectives that raise important research and practical questions regarding the impact of expanding the performance construct space on appraisal outcome and reactions. However, insofar as these systems consist of multiple rater–ratee relationships, many of the cognitive and motivational elements present in conventional appraisal are likely to remain applicable. For example, prior research findings on conventional appraisal that found that employees are more likely to react favorably to appraisal feedback when there is prior discussion on performance expectations at the beginning of the performance period, opportunity for employees to provide input to the appraisal and discuss raters’ rationales for the appraisal judgments, and consideration of employees’ feelings. Performance appraisal and performance feedback have the ultimate common goal of increasing job performance effectiveness. Important conceptual and practical relationships exist between performance appraisal and performance feedback. For example, accountability effects in performance appraisal are likely to be related to the type and specificity of performance feedback information, and justice perception effects in performance feedback are likely to be related to the accuracy and transparency of the performance appraisal process. Research findings with more theoretical value and higher external validity are likely to be obtained from studies that integrate performance appraisal and performance feedback.

Compensation refers to the entire process pf designing and administering the package of returns that an organization provides to an employee in exchange for his or her work input. The package, which may include financial remuneration, services, and medical and other benefits, is typically divided into direct pay and indirect pay/benefits. Direct pay may consist of the fixed base pay, base pay supplements (e.g., market value adjustments, cost-of-living allowances, overtime pay), and performance-related pay (e.g., merit increments, performance bonuses, performance commissions).

Indirect pay and benefits may consist of any services or benefits provided to the employee (e.g., vacations, medical benefits, discounts for goods and services). In human resources management, most attention on compensation design and administration is focused on the strategic mix of the various components of returns to align the compensation system with the resources, constraints, priorities, and strategic goals of an organization within the labor market context of the need to attract and retain suitable employees. This typically revolves around issues of decisions concerning the value or grade level of the various jobs in the organization, the level of compensation relative to that of external referent organizations (which are typically competitors for the same employees), the design of the compensation package for individual employees, and the administration of the package. Compensation research in personnel psychology, on the other hand, is more concerned with the psychological relationships at the individual level (although it may also involve team, organizational, or higher levels of analysis) linking compensation to employee performance and reactions. Specifically, these relationships are concerned with the motivations, perceptions, and attitudes of employees who are affected by the various types of compensation (and ways in which it is administered) and how these motivations, perceptions, and attitudes, in turn, affect employee performance and reactions.

Compared with issues of selection, training, and appraisal, compensation issues have largely been ignored by personnel psychologists, despite the fact that the idea of linking rewards to job performance has been central in empirically established theories of work motivation such as expectancy theory, goal setting theory, and equity and justice theories. Although compensation typically refers to a contractual (legal or semilegal) or formal package of returns, rewards is a more generic term used to refer to any positive reinforcement or inducement provided (explicitly or implicitly) by an organization to employees that is assumed to positively correlate with past, current, and/or future performance. During recent years, the rapidly changing nature of work has led to an increased use of new pay systems by employers. This has, in turn, activated research interest among some personnel psychologists. Not surprisingly, the majority of the recent personnel psychology research on compensation is on new forms of pay systems and has found considerable evidence that some of these new pay systems, such as variable pay and competency- and skill-based pay, are related to improved employee and organizational performance. However, it remains unclear why or how these new forms of pay lead to increased performance, although a number of conceptual models based on various psychological theories (e.g., social exchange theory, theory of planned behavior) have been proposed to account for the observed relationships. Instead of applying Grand theories to commonalities across various new and effective pay systems, midrange theories that relate the specific form of pay system to the pay context, employee characteristics, and employee reactions aremore likely to enhance our understanding and provide practical recommendations for specific compensation contexts.

There are several discernible themes in current research in personnel psychology across the areas of recruitment, selection, training, appraisal, feedback, and compensation. One theme concerns the importance of focusing on the multidimensional and dynamic nature of job performance. In early research, job performance was construed nearly solely in terms of core technical proficiency or task performance. Current research has expanded the performance construct space to include organizational citizenship behaviors, counterproductive behaviors, and adaptive behaviors. This expansion has implications for the various areas of personnel psychology (e.g., identifying and selecting candidates with dispositions toward citizenship behaviors and against counterproductive behaviors, appraising employees on these additional performance dimensions, designing training that enhances the ability to adapt to changing situations). Current research has also focused much attention on the dynamic nature of job performance with respect to changes in performance level over time and changes in performance dimensionality over time. These changes over time raise complex but important conceptual and measurement questions that provide a springboard to productive future research. Another theme concerns person–environment fit, where environment may refer to the job, the work group, or the organization. The basic idea is that maximizing person–environment fit often (but not always) leads to positive outcomes in recruitment, selection, training, appraisal, feedback, and compensation. Research in person–environment fit brings with it several challenging methodological and data-analytic issues such as the need to distinguish between subjective fit perceptions and objective fit assessments. Finally, running across virtually all current research in personnel psychology is the central theme that the changing nature of work has major implications for the conceptualizations and measurement of the various focal constructs as well as the relationships (conceptual and empirical) between constructs.

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