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Compare the utilities of the driving test

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Reference no: EM133179544

Speedway is a last-mile logistics company that provides express door-to-door delivery for businesses across Southeast Asia. The company operates in Singapore, Malaysia, Philippines, Indonesia, Thailand and Vietnam and employs up to 600 drivers. As the online shopping market grows, Speedway is experiencing increased demand for its delivery services. The company plans to double its pool of drivers within the next three years. Senior management is concerned that the quality of drivers may decline with the manpower expansion, which in turn increases the risk of accidents for the firm. The COO directed HR to explore options to maintain driver quality. 

Janice, an HR executive, has been tasked to explore either a driving test or safe driving course to maintain driving standards of new recruits. She compiles the information below to support the business case that she is preparing (see Tables 1 and 2). Speedway plans to recruit 200 new drivers annually and expects 2 applications per vacancy. The dollar value of one standard deviation of driving performance is $3,000. 

Table 1. Benefits and Costs of Driving Test

Cost of driving test

$50 per applicant

Validity of driving test

0.55

Table 2. Benefits and Costs of Safe Driving Course

Cost of driving course

$150 per new recruit

Validity of driving course

0.40

Refresher Course

Every year

(a) Using the Brogden-Cronbach-Gleser formula, calculate the overall utility of the driving test. Show your working clearly and round off your answers to two decimal places. 

(b) Using the modified Brogden-Cronbach-Gleser formula, calculate the overall utility of the driving course. Show your working clearly and round off your answers to two decimal places. 

(c) Compare the utilities of the driving test vs. the driving course and recommend the intervention that Janice should adopt. Explain the reason for your choice based on what utility reflects. 

REFERENCE:  Bauer, T., Erdogan, B., Caughlin, D., & Truxillo, D. (2019). Human resource management: People, data, and analytics. SAGE Publications.

Reference no: EM133179544

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