What is a base rate, and how is it calculated? What do really high and really low base rates mean in general and for organization looking to improve selection? How does the level of base rate affect selection and success rates? At what BR are selection measures most useful, and why?

Question

What will be an ideal response?

Answer 1

Base rate (BR) is the proportion of persons judged successful using current selection procedures. To be of any use in selection, the measure must demonstrate incremental validity (Murphy, 1987) by improving on the BR. That is, the selection measure must result in more correct decisions than could be made without using it. The BR in a selection situation can be changed by raising or lowering this minimum standard on the criterion. Figure 14.9 illustrates that, given a BR of .80, it would be difficult for any selection measure to improve on this figure. In fact, when the BR is .80, a validity of .45 is required to produce an improvement of even 10% over BR prediction. This is also true at very low BRs, where the objective is to predict failure (as would be the case, e.g., in the psychiatric screening of job applicants). Selection measures are most useful, however, when BRs are about .50. This is because the variance of a dichotomous variable is equal to p times q, where p and q are the proportions of successes and failures, respectively. Applications of selection measures to situations with markedly different SRs or BRs can result in quite different predictive outcomes and cost–benefit ratios.