Problem 17-6 Hiring: The HR Department is trying to fill a vacant position for a
ID: 405847 • Letter: P
Question
Problem 17-6 Hiring: The HR Department is trying to fill a vacant position for a job with a small talent pool. Valide applicatoins arrive every week or so, and the applicants all seem to bring different levels of expertise. For each applicant, the HR Manager gathers information by trying to verify various claims on resumes, but some doubt about a fit always lingers when a decision to heir or not is to be made. (1) What are the Type I and Type II decision costs? (2) Which decision error is more likely to be discovered by the CEO? and (3) How does this affect the HR Manager's hiring decisions?
Explanation / Answer
1. Type I error: - When the null hypothesis is true and you reject it, you make a type I error. Here null hypothesis is the candidate is fit for job profile.
Type II error: - When the null hypothesis is false and you fail to reject it, you make a type II error. Here null hypothesis is the candidate is not fit for job profile.
Type I error costs in rejection of right candidate where as Type II error costs selection of wrong candidate.
2. Type II error is more likely to be discovered by the CEO, because he can easily identify that the selected person is not fit for job.
3. Hiring a wrong person for job is huge problem for HR. the CEO will doubt your capability of hiring. People will blame you for resource loss. Next hiring there will be chance that HR will not get a right candidate easily he will see each & every candidate with a biased view which can also lead to wrong selection.