Department

University of Tennessee at Chattanooga. Dept. of Psychology

Publisher

University of Tennessee at Chattanooga

Place of Publication

Chattanooga (Tenn.)

Abstract

Using credit information for employee selection began around 1988, after polygraph tests for such purposes were banned. Organizations sought other methods that predicted employees’ behavior and gave insight into their honesty, responsibility and integrity. Since the early 1990s, credit information’s influence on hiring decisions has increased significantly. As of 2010, 47% of organizations use credit information for specific jobs, and 13% use them for all jobs (Bryan & Palmer, 2012). The U.S. Equal Employment Opportunity Commission (EEOC) reported that organizations screen for negative credit histories and use that information to impact their hiring decisions (Bryan & Palmer, 2012). Many organizations anecdotally believe credit information indicates responsibility, honesty and accountability. This belief has face validity in the financial industry. Credit information has face validity in two ways during employee selection at financial institutions: 1) financial history relates to an ability to handle financial accounts, and 2) the opportunity to steal is greater at financial institutions (Nielson & Kuhn, 2009). While there may be face validity in the financial industry, most industries are relying on credit information to measure candidates’ conscientiousness and honesty. The assumption is that poor credit information implies some level of irresponsibility, which has the potential for workplace dishonesty or fraud (Bryan & Palmer, 2012). A study at Eastern Kentucky University on the validity of credit reports in predicting performance appraisal ratings and termination found no correlation between credit history and performance ratings (Bryan & Palmer, 2012). The purpose of this study is to determine if credit information has any unique contribution to the selection process, or if it is made redundant through other methods such as background and criminal checks. Data from a large government organization will be used, along with their selection process methods, to determine how much overlap exists between the different variables used in their selection process. A bivariate regression will be run on individual selection variables and a multiple regression will be run on the selection variables collectively. This study hopes to provide a better understanding of the unique contribution credit information may provide to the selection process.

Date

October 2018

Subject

Industrial and organizational psychology

Document Type

posters

Language

English

Rights

Under copyright.

License

http://creativecommons.org/licenses/by-nc-nd/3.0/

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Usage of Credit Information in the Selection Process: A Unique Contribution

Using credit information for employee selection began around 1988, after polygraph tests for such purposes were banned. Organizations sought other methods that predicted employees’ behavior and gave insight into their honesty, responsibility and integrity. Since the early 1990s, credit information’s influence on hiring decisions has increased significantly. As of 2010, 47% of organizations use credit information for specific jobs, and 13% use them for all jobs (Bryan & Palmer, 2012). The U.S. Equal Employment Opportunity Commission (EEOC) reported that organizations screen for negative credit histories and use that information to impact their hiring decisions (Bryan & Palmer, 2012). Many organizations anecdotally believe credit information indicates responsibility, honesty and accountability. This belief has face validity in the financial industry. Credit information has face validity in two ways during employee selection at financial institutions: 1) financial history relates to an ability to handle financial accounts, and 2) the opportunity to steal is greater at financial institutions (Nielson & Kuhn, 2009). While there may be face validity in the financial industry, most industries are relying on credit information to measure candidates’ conscientiousness and honesty. The assumption is that poor credit information implies some level of irresponsibility, which has the potential for workplace dishonesty or fraud (Bryan & Palmer, 2012). A study at Eastern Kentucky University on the validity of credit reports in predicting performance appraisal ratings and termination found no correlation between credit history and performance ratings (Bryan & Palmer, 2012). The purpose of this study is to determine if credit information has any unique contribution to the selection process, or if it is made redundant through other methods such as background and criminal checks. Data from a large government organization will be used, along with their selection process methods, to determine how much overlap exists between the different variables used in their selection process. A bivariate regression will be run on individual selection variables and a multiple regression will be run on the selection variables collectively. This study hopes to provide a better understanding of the unique contribution credit information may provide to the selection process.