DETERMINING CUTOFF SCORES THAT OPTIMIZE UTILITY - A RECOGNITION OF RECRUITING COSTS

A modification of Brogden's (1949) utility formula is proposed for establishing optimal cutoff scores in criterion-related validity studies. The proposed modification highlights the direct trade-off between selecting more capable applicants and the costs associated with selection and recruiting. Data from national cost-per-hire surveys are presented to illustrate the magnitude of recruiting costs relative to selection costs. In addition, an analysis of recruiting practices suggests the need to account for variable recruiting costs when establishing cutoff scores. Two examples are used to illustrate the proposed procedure. Cutoff scores are set to maximize the utility derived from salesperson productivity and to minimize the expenses associated with accidents by truck drivers.