Strategic Industrial and Organizational Psychology and the Role of Utility Analysis Models

The beginning of the twenty-first century poses an interesting paradox for I/O psychology and strategic human resource management. Leading I/O psychology journals, especially in the United States, have reduced attention to utility analysis at a time when the quantitative measurement of human capital is receiving unprecedented attention. This chapter admonishes scholars and practitioners in I/O psychology and human resource management to integrate their disciplines, and create a more strategic approach. We show how the logic and methods of utility analysis provides a framework for I/O psychology to be more strategic, and for strategic human resource management to be more operationally rigorous. We review developments in utility analysis research since 1991, but propose a new perspective based on decision support. We address the “criterion problem” in SDy research with this decision-based perspective, as an alternative to the traditional I/O focus on measurement and psychometrics, to show how the decision-based perspective reveals opportunities to link human capital and organizational success. We present a model, HC Bridge™, that links human capital and organizational performance, and use it to describe new directions for research on utility analysis estimation, acceptance, and decision making. Finally, we address SDy measurement from a strategic perspective, to show how SDy addresses a fundamental gap in human resource strategy. Keywords: HC Bridge; human capital; human resources; measurement; SDy; strategy; utility analysis