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Q. Randy placed an ad in the paper and so far he received 100 applications and he wants to hire 50 workers. Randy chose two selection methods, interviewing and sample test. He estimates which it would cost 100$ to interview and applicant and 150$ per applicant for work sample.
Validity of the interview is r=.30 while the validity of the work sample is r=.50 the average score the selection measure of those applicants selected is z=.80 (.80 standard deviations above the mean), Randy plans to offer workers a wage of 6$ per hour (course of a year 12, 000 salary).
1. Elucidate how much money would Randy save using each selection method?
2. If Randy can use only one method, which should he use?
3. If the number of applicants increases to 200 (more applicants are coming in everyday), elucidate how will your answers to questions 1 and 2 change?
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