Banding Selection Scores in Human Resource Management Decisions: Current Inaccuracies and the Effect of Conditional Standard Errors

Abstract

The personnel selection literature has recently included discussion of statistically based banding as a way to handle some differences in test scores when assessing job applicants. Banding uses classical test theory and an estimated standard error of measurement to create bands of individual scores, and these bands are treated as equivalent with respect to top-down selection. However, such banding operationally assumes that standard errors of measurement are homogeneous, whereas a focus on the top score logically and statistically implies the use of a conditional standard error. Other methods, such as item response theory and binomial error models, are therefore more appropriate for computing bands. Via example and analysis, the authors demonstrate that more accurately computed bands are substantially narrower under a variety of circumstances than currently computed bands. Bands as currently constructed will label an inaccurate excess of individuals as equivalent, particularly if the test is relatively easy.