Personality Testing in Personnel Selection: Adverse impact and differential hiring rates Stephen D. Risavy and Peter A. Hausdorf Department of Psychology, University of Guelph, Guelph, ON, Canada N1G 2W1. phausdor@uoguelph.ca Personality tests are often used in selection and have demonstrated predictive validity across a variety of occupational groups and performance criteria. Although different selection decision methods can be used to make selection decisions (e.g., compensatory top down, compensatory with sliding bands, noncompensatory) from personality test results, there is a paucity of research addressing the influence of these different selection decision methods on issues such as, adverse impact and differential hiring rates. This gap in the literature is redressed in the current study. Results from 398 bus operator candidates indicated that there may be adverse impact and differential hiring rate issues depending on the selection decision method used and the designated group being assessed. Implications and future research directions are discussed. 1. Introduction T alent management – the attraction, development, and retention of key employees – begins with finding the right people. Because hiring the right people is critical for organizational success and hiring the wrong people (i.e., making false positive selection decisions) may have a negative impact on an organization, selection is of great importance to human resource practitioners. The nega- tive costs associated with making false-positive hiring decisions are substantial; unqualified employees may make costly errors, may require close supervision, and may need to receive training to become qualified for the job that they were hired to perform. Conversely, the economic benefits of making correct hiring decisions have been documented in the organizational sciences literature (e.g., Hunter & Schmidt, 1982). For example, when selecting candidates based on ability, substantial labor savings have been found because of the increased productivity associated with high performers (Hunter & Schmidt, 1982). As a result of the importance of making accurate selection decisions, organizational researchers and prac- titioners have invested considerable effort in assessing different selection tools. Survey data has provided evi- dence that personality tests are often employed as an assessment measure in personnel selection processes (e.g., Heller, 2005; Rothstein & Goffin, 2006; Ryan & Sackett, 1987). Moreover, Conscientiousness – one of the focal dimensions of personality – appears to have some predictive validity across occupational groups and performance criteria in both North American (Barrick & Mount, 1991; Hough, Eaton, Dunnette, Kamp, & McCloy, 1990) and European (Salgado, 1997) communities. Although some researchers have argued that personality tests are generally not associated with adverse impact (e.g., Ones & Anderson, 2002), there is some evidence of group differences in mean scores between subgroups (e.g., Bartram, 1992; Dion & Yee, 1987). Because of the possibility that there are group differ- ences in personality test data, selecting employees using this information may be associated with adverse impact and/or differential hiring rates. Moreover, adverse impact and/or differential hiring rates may vary based on the decision method that is used to make selection decisions (e.g., compensatory top down, compensatory with sliding bands, noncompensatory). There is a paucity of research addressing the possible influence of these different selec- tion decision methods on issues such as, adverse impact and differential hiring rates when using personality test data to make hiring decisions. The current study focuses on the practical issue of exploring possible group differences in personality as- sessment and the potentially resulting adverse impact on White females and minorities under different selection decision methods. Moreover, differential hiring rates under the different selection decision methods between majority and minority group members will be assessed. In & 2011 Blackwell Publishing Ltd., 9600 Garsington Road, Oxford, OX4 2DQ, UK and 350 Main St., Malden, MA, 02148, USA International Journal of Selection and Assessment Volume 19 Number 1 March 2011