Bayesian Decision-making in Candidate Assessment for Hiring

Volodymyr Savchuk

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the application of Bayesian decision theory in the context of organisational recruitment processes. Bayesian decision theory is a statistical framework that enables decision-makers to make rational choices by incorporating prior knowledge and updating it with new information. In enterprise recruiting, making informed decisions about candidate selection is crucial for optimising staffing outcomes and minimising potential risks. Traditional approaches often rely on subjective judgments and intuition, resulting in less-than-optimal outcomes. By adopting a Bayesian decision-making approach, organisations can enhance the objectivity and effectiveness of their recruitment processes. This paper discusses the fundamental concepts of Bayesian decision theory and demonstrates how it can improve candidate selection in enterprise recruiting. The suggested procedure starts with a traditional set of assessment tools, which provides a decision-maker with initial information about a candidate's abilities. This allows him to assess a prior probability distribution regarding the candidate's suitability for the position. In the second step, the candidate must pass professional tests, each of which can be successful or unsuccessful. This generates additional information for the decision-maker. Using the Bayesian technique, the procedure combines the prior probabilities with the test results to create a posterior distribution, ultimately leading to the likelihood of the candidate's suitability for a specific position. This suggested procedure can reduce the risk of hiring the wrong candidate.

Keywords: Bayesian Technique; Probability Distribution; Prior Information; Posterior Information. (search for similar items in EconPapers)
JEL-codes: M51 (search for similar items in EconPapers)
Date: 2025-01-03
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