Intellectual capital

With today’s increasingly competitive global market, organisations are placing more and more emphasis upon their ‘human resources’ or ‘intellectual capital’ as a source of competitive advantage. Therefore it is imperative for firms to have the most reliable and valid selection techniques to hire the right people for the right jobs. The model of selection that has emerged as the dominant paradigm in the latter part of the 20th Century is the psychometric process and this paradigm has remained dominant ever since.

The following essay aims to critically evaluate this recruitment paradigm using some of the assumptions made within three other models proposed by Iles (1999): the strategic management model, social process model and critical discourse model. To begin with however, a description of the psychometric paradigm is required. This ‘traditional’ approach has its underlying roots in differential psychology and classical test theory, as its central assumption is that psychological differences between individuals are measurable and are critical in determining job performance (Iles, 1999).

Jobs and employees are considered to be stable entities in stable environments and therefore facilitate the prediction of future job performance. Analytical focus remains for the most part on designing reliable measurements for psychological constructs such as: general ability, numeracy, verbal or spatial ability, personality or motivation (Ramsay and Scholarious, 1999). The power nexus of selection is considered to be held by the organisation which is primarily looking for a person-job fit. In practice a systematic job analysis is conducted in order to establish what skills are necessary to fulfil the position.

This then enables a person specification to be drawn up containing a full, comprehensive description of skills, knowledge etc being sought. From this job specification, the candidate with the most appropriately matched skills from the selection procedures will be chosen. #talk about reliability, validity, equity and utility!!!!! # The main strength of this paradigm is that it claims to select applicants solely on the basis of their ability, ensuring that only job relevant skills and qualities are taken into account.

Due to this, it has been classed as an ‘objective, rational, meritocratic’ approach which aims to minimise bias and discrimination (Iles, 1999). Moreover, the psychometric tests themselves have been proved reliable. For example in a meta-analysis of many studies, Schmidt and Hunter (1998) found the criterion-related validity of a cognitive ability test was 0. 51 showing a clear correlation between cognitive ability and successful job performance. Personality tests are also valid measures of job performance. In particular the personality traits of conscientiousness and openness to new experience are the two best predictors of job performance.

Conscientiousness is correlated with motivation, performance, dependability, carefulness and responsibility, whereas openness to new experience is correlated with the capacity to learn, training proficiency and ability. Recently, however, cracks have appeared in the dominant paradigm (Herriot, 1993), as the realities of organisational change have caused some problems. Herriot and Anderson (1997) explain that the psychometric paradigm is rooted in an era of bureaucracy and assumes there are a large number of stable jobs.

In this respect it fails to take into account the external environment (Strategic management position) as this is no longer the case in the modern day economy. New forms of flexible working and team based roles have become increasingly popular and the conception of a job as a stable set of discrete practices is becoming rare (Atkinson, 1984). This is bad news for the psychometric paradigm as predicting behaviour to fit the roles for a specific, stable, static job is the central tenet of the approach.

Finally the psychometric paradigm does not take into account any corporate strategy factors, e. g business life cycle and so cannot match the hr recruitment practices with the corporate strategies (i. e. best fit model – Purcell, 1999). The social process (Iles, 1999) also critics the psychometric paradigm on a number of levels. This approach argues that although the process may be appear to be objective, in practise it often departs from this ideal and presents an altogether more political and informal set of processes.

The need to judge and evaluate candidates will always afford selectors a substantial element of discretion regardless of the degree and formality present in the selection process (Collinson, 1990). An example of this come from a study by Keenan (1978) who found that recruitment preferences of personnel officers seem to depend on their own personal background and not just on the requirements of the organisation. This can lead to organisations, which employ candidates who are all very similar in their attitudes and beliefs as the personnel officers choose people who are similar to themselves.

This may harm the organisation’s effectiveness (See Scheider’s (1987) attraction-selection-attrition model). Furthermore, the psychometric paradigm assumes that individual differences are stable and constant over time, however much research shows that individual differences are malleable and open to change and are often affected by work experiences (Iles, 1999). The psychometric paradigm has also come under fire for causing a variety of negative employee outcomes. Spitznagel (1982) found that psychometric tests can stress out employees and can evoke test anxiety and perhaps even invade privacy.

Moreover, De Witt et al (1997) found that candidates had positive attitudes towards interviews and behavioural stimulations, however they were less positive towards the intelligence tests and personality inventories as they were seen as irritating, less fair or accurate. Finally the social process model criticises the psychometric model, for it does not take into account the changing negotiating power of some applicants with sought after skills. The psychometric paradigm just assumes that the organisation holds the power to select the candidate they want without any regard for the preferences of the applicant.

It does not take into account the selection/attraction conflict portrayed in Schuler et al’s (1993) model. ## add in here schuler’s model and a blurb about it ### Finally, the social process model argues against the fact that the psychometric paradigm is completely unbiased and discrimination free. It is argued that the psychometric paradigm gives rise to ‘adverse impact’ or indirect discrimination, which is defined as ‘a procedure that rejects a disproportionate number of applicants from one social group which cannot be justified in terms of their ability to do the job’ (Iles, 1999).

Psychometric tests are said to discriminate against minority groups such as blacks and Hispanics and as they as a group tend to score less than white people as they in general tend not to have the same access to good schools etc. This however, is a societal problem that cannot be solved by HRM as it is not possible to give equal opportunities to people at work if they had not had equal opportunities throughout their lives. A third perspective which highlights some weaknesses of the psychometric paradigm comes from the critical discourse theory.

This is argued most clearly by Michael Foucault who regards knowledge, skills and employee performance as a form of discourse which has been constructed by society through a series of political and subjective processes. He explains that job analysis and appraisal attempt to co-ordinate the efforts of employees, while various ‘examinatory techniques’ such as selection tests and assessment procedures seeks to constitute the individual as an object of knowledge and power in order to aid the rational decision making.

In essence this model contends there are ‘no truths’ in the world about anything, including recruitment and selection, as knowledge is socially constructed and not discovered (Holloway, 1991). This theory is therefore completely against the psychometric paradigm which regards recruitment as a scientific, rational process that measures physical skills and behaviours. Therefore, in conclusion, although psychometric tests have been proved to be reliable and worthwhile in the past, the paradigm as a whole has come under considerable criticism in recent years.

Iles’s 3 perspectives: the strategic management approach, social process and critical discourse theory have highlighted a plethora of weaknesses in the psychometric paradigm which have greatly undermined the authority of this dominant perspective. With the ever-changing working environment it is argued that this traditional, rigid approach is no longer appropriate for modern-day organisations and a newer, more flexible and socially inclusive model of recruitment is required, in order to select the best candidates for the new functionally flexible roles.