<p>I believe I know which paper you're referring to. My guess is the widely cited <a href="http://psycnet.apa.org/buy/1998-10661-006" rel="nofollow noreferrer">Schmidt &amp; Hunter (1998)</a> paper. The paper summarizes 85 years of practical and theoretical implications of research in personnel selection. To see that they address what you're asking for, here is a quote from the paper</p>

<blockquote>
  <p>If a superior worker is defined as one whose performance (output) is at the 84th percentile (that is, 1 SD above the mean), then a superior
  worker in a lower level job produces 19% more output than an
  average worker, a superior skilled worker produces 32% more
  output than the average skilled worker, and a superior manager
  or professional produces output 48% above the average for those
  jobs. These differences are large and they indicate that the payoff
  from using valid hiring methods to predict later job performance
  is quite large.</p>
</blockquote>

<p>Then later they state</p>

<blockquote>
  <p>At one extreme, if an organization must hire all who
  apply for the job, no hiring procedure has any practical value.
  At the other extreme, if the organization has the luxury of hiring
  only the top scoring 1%, the practical value of gains from selection
  per person hired will be extremely large. But few organizations
  can afford to reject 99% of all job applicants.</p>
</blockquote>

<p>However, a more recent paper on the subject has been published. That's the <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2853669" rel="nofollow noreferrer">Schmidt, Oh &amp; Shaffer (2016)</a>, which summarizes 100 years of practical and theoretical implications of research in personnel selection. This paper is an update on the former, so you may as well just look only at this latest one.</p>

CC BY-SA 4.0
2018-07-20T22:22:30.403Z
perfect. 4536 citations :)
faustus
CC BY-SA 4.0
2018-09-02T23:29:28.833Z
I take thar paper with a giant boulder of salt https://skeptics.stackexchange.com/questions/40059/is-job-experience-a-poor-predictor-of-job-performance And for more than one reason http://faculty.cas.usf.edu/mbrannick/papers/conf/siopk.htm
got trolled too much this week
CC BY-SA 4.0
2018-09-03T00:05:06.437Z
And I managed to re-find the paper that made me really doubt S&H (without asking a ref-request question here, ha!): https://www.tandfonline.com/doi/pdf/10.1080/10888691.2014.983635
got trolled too much this week
CC BY-SA 4.0
2018-09-03T07:42:11.727Z
@Fizz I know of Ken Richardson. However, no, I don't find his arguments convincing. Many of his arguments are against corrections in meta-analyses that attempt to correct for weakly measured data. The problem is that, even if you completely showed that S&H paper was completely untruthworthy for whatever reasons, these criticisms *have* been dealt with in the wider literature at large. There are many studies that have great data that still finds substantial correlations between intelligence and performance measures.
Eff
CC BY-SA 4.0
2018-09-03T07:49:00.407Z
@Fizz I generally refrain from attacking researchers personally, and instead discuss their arguments. Unfortunately I feel it's necessary in this case. Ken Richardson and Sarah Norgate are completely outside the mainstream of intelligence research. And why? This is obvious. Sarah's university profile: "Sarah’s research expertise lies mainly in applying developmental psychology to topical societal issues..." and "Sarah is committed to social inclusion and, to this end, her published work has involved critiques of work in behaviour genetics..." She is an activist first, not a scientist first.
Eff
CC BY-SA 4.0
2018-07-20T19:27:56.973Z
2018-07-20T20:35:24.843Z
2018-07-20T20:35:24.843Z
Eff
<p><strong>TL;DR</strong></p>

<p><strong>I'm looking for a paper that explicitly quantifies the ROI an employer would likely derive if personnel selection involved intelligence testing and only those +2 SD in cognitive ability were hired.</strong></p>

<p>There's a correlation between IQ and job performance, ranging from .20s for low complexity jobs and .50 for high complexity jobs. Hardly unity (r = 1.00) but regardless, it's still considered to be the best predictor of job performance.</p>

<p>A number of years ago as an undergrad I read a paper discussing the economic rationale of an employer administering an IQ test and only selecting candidates who scored +2 SD above the mean. From the pool of candidates remaining, the employer would then interview for the best candidate as per usual. The author's thinking was along the following lines:</p>

<ul>
<li><p>Suppose you had a group of employees who you were paying an annual salary of \$100,000 and their productivity was normally distributed between say, \$100,000 - \$300,000 (mean = $200,000).</p></li>
<li><p>By selecting those who are +2 SD in cognitive ability, the employer would increase the chances that those who are hired will return them closer to $300,000 per year. </p></li>
<li><p>Total economic gain = Number of employees x Increased return ($) x Duration of tenure </p></li>
</ul>

<p>This topic is relevant to a publication I'm preparing and I've been racking my brain trying to find it. For the life of me I simply cannot find it. </p>

<p>Does this ring a bell for anyone? Ideally, I'd like the specific one that I'm mentioning, but failing that, something in a similar vein. Essentially: suppose you hired only those >130 IQ -- regardless of the rightfulness/wrongfulness of doing so, what I want to know is what the $ amount benefit to the employer would be.</p>

CC BY-SA 4.0
2018-07-16T13:39:18.357Z
Just to clarify, you're looking for a specific paper, or literature in general? For example Linda Gottfredson has written a fair bit on intelligence and work place success. For example, her well known paper "Why *g* matters".
Eff
CC BY-SA 4.0
2018-07-16T13:45:18.180Z
Yep, I've got that paper. Ideally, I'm after that actual paper, but if not, a paper that attempts to quantify this personnel selection method e.g. x% more output per employee per year
faustus
CC BY-SA 4.0
2018-07-16T20:19:50.660Z
Possibly off-topic here, as it pertains more to economy than psychology?
Steven Jeuris
CC BY-SA 4.0
2018-07-17T09:05:55.827Z
Even if such a paper exists, I have doubts in its real-world relevance. Let's say you only want to hire a carpenter with IQ > 130. How many carpenters would have to reject? Hundreds maybe? What's the cost for interviewing all those and not getting the job done in the meantime? If you can't remember a specific field in which this alleged paper's employees were working, it's probably fair to say the paper is bollocks.
got trolled too much this week
CC BY-SA 4.0
2018-07-17T09:10:08.040Z
@Fizz let me rephrase: rather than IQ >130, you select the top 2% of any applicants. The paper had to do with white collar roles in organisations where I presume they have an HR department.
faustus
<measurement><reference-request><intelligence><iq><selection-recruitment>
Paper discussing economic rationale of IQ-based hiring practices
faustus
# Paper discussing economic rationale of IQ-based hiring practices

(Asked by: username_0 on 2018-07-16)

**TL;DR**

**I'm looking for a paper that explicitly quantifies the ROI an employer would likely derive if personnel selection involved intelligence testing and only those +2 SD in cognitive ability were hired.**

There's a correlation between IQ and job performance, ranging from .20s for low complexity jobs and .50 for high complexity jobs. Hardly unity (r = 1.00) but regardless, it's still considered to be the best predictor of job performance.

A number of years ago as an undergrad I read a paper discussing the economic rationale of an employer administering an IQ test and only selecting candidates who scored +2 SD above the mean. From the pool of candidates remaining, the employer would then interview for the best candidate as per usual. The author's thinking was along the following lines:

* Suppose you had a group of employees who you were paying an annual salary of \$100,000 and their productivity was normally distributed between say, \$100,000 - \$300,000 (mean = $200,000).
* By selecting those who are +2 SD in cognitive ability, the employer would increase the chances that those who are hired will return them closer to $300,000 per year.
* Total economic gain = Number of employees x Increased return ($) x Duration of tenure

This topic is relevant to a publication I'm preparing and I've been racking my brain trying to find it. For the life of me I simply cannot find it.

Does this ring a bell for anyone? Ideally, I'd like the specific one that I'm mentioning, but failing that, something in a similar vein. Essentially: suppose you hired only those >130 IQ -- regardless of the rightfulness/wrongfulness of doing so, what I want to know is what the $ amount benefit to the employer would be.

**Tags:** measurement, reference-request, intelligence, iq, selection-recruitment

> **Comments:**
> **username_1**: Just to clarify, you're looking for a specific paper, or literature in general? For example Linda Gottfredson has written a fair bit on intelligence and work place success. For example, her well known paper "Why *g* matters".  
> **username_0**: Yep, I've got that paper. Ideally, I'm after that actual paper, but if not, a paper that attempts to quantify this personnel selection method e.g. x% more output per employee per year  
> **username_2**: Possibly off-topic here, as it pertains more to economy than psychology?  
> **username_3**: Even if such a paper exists, I have doubts in its real-world relevance. Let's say you only want to hire a carpenter with IQ > 130. How many carpenters would have to reject? Hundreds maybe? What's the cost for interviewing all those and not getting the job done in the meantime? If you can't remember a specific field in which this alleged paper's employees were working, it's probably fair to say the paper is bollocks.  
> **username_0**: @Fizz let me rephrase: rather than IQ >130, you select the top 2% of any applicants. The paper had to do with white collar roles in organisations where I presume they have an HR department.  

---

## 1 answers

### Answer by username_1 on 2018-07-20. Score: 4 | Accepted answer

I believe I know which paper you're referring to. My guess is the widely cited [Schmidt & Hunter (1998)](http://psycnet.apa.org/buy/1998-10661-006) paper. The paper summarizes 85 years of practical and theoretical implications of research in personnel selection. To see that they address what you're asking for, here is a quote from the paper

> If a superior worker is defined as one whose performance (output) is at the 84th percentile (that is, 1 SD above the mean), then a superior
> worker in a lower level job produces 19% more output than an
> average worker, a superior skilled worker produces 32% more
> output than the average skilled worker, and a superior manager
> or professional produces output 48% above the average for those
> jobs. These differences are large and they indicate that the payoff
> from using valid hiring methods to predict later job performance
> is quite large.

Then later they state

> At one extreme, if an organization must hire all who
> apply for the job, no hiring procedure has any practical value.
> At the other extreme, if the organization has the luxury of hiring
> only the top scoring 1%, the practical value of gains from selection
> per person hired will be extremely large. But few organizations
> can afford to reject 99% of all job applicants.

However, a more recent paper on the subject has been published. That's the [Schmidt, Oh & Shaffer (2016)](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2853669), which summarizes 100 years of practical and theoretical implications of research in personnel selection. This paper is an update on the former, so you may as well just look only at this latest one.

> **Comments:**
> **username_0**: perfect. 4536 citations :)  
> **username_3**: I take thar paper with a giant boulder of salt https://skeptics.stackexchange.com/questions/40059/is-job-experience-a-poor-predictor-of-job-performance And for more than one reason http://faculty.cas.usf.edu/mbrannick/papers/conf/siopk.htm  
> **username_3**: And I managed to re-find the paper that made me really doubt S&H (without asking a ref-request question here, ha!): https://www.tandfonline.com/doi/pdf/10.1080/10888691.2014.983635  
> **username_1**: @Fizz I know of Ken Richardson. However, no, I don't find his arguments convincing. Many of his arguments are against corrections in meta-analyses that attempt to correct for weakly measured data. The problem is that, even if you completely showed that S&H paper was completely untruthworthy for whatever reasons, these criticisms *have* been dealt with in the wider literature at large. There are many studies that have great data that still finds substantial correlations between intelligence and performance measures.  
> **username_1**: @Fizz I generally refrain from attacking researchers personally, and instead discuss their arguments. Unfortunately I feel it's necessary in this case. Ken Richardson and Sarah Norgate are completely outside the mainstream of intelligence research. And why? This is obvious. Sarah's university profile: "Sarah’s research expertise lies mainly in applying developmental psychology to topical societal issues..." and "Sarah is committed to social inclusion and, to this end, her published work has involved critiques of work in behaviour genetics..." She is an activist first, not a scientist first.  

---

