Validating Hiring Criteria

We construct a model in which firms use workers' productivities in determining their job assignments. A worker's productivity must exceed some lower bound to satisfy the minimum qualifications for a particular job. If the worker's productivity exceeds some upper bound he is promoted. Under these conditions it is possible that the better educated and more experienced individuals would be the least productive workers on every job, even though, for each worker, education and experience increases his productivity. Whether this anomalous result occurs depends on the underlying distribution of ability in the population and the job assignment policy delineated above. One implication of our analysis is that firms that use hiring criteria that accurately predict a worker's success on the job may not be able to validate those criteria through measurements of the performance of the workers that they had hired. EEOC rules that require hiring criteria to be validated in that fashion may penalize firms with the most efficient hiring and promotion standards.