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Personality and Social Psychology
Using individual differences to predict job performance: Correcting for
direct and indirect restriction of range
SOFIA SJO
¨BERG,
1
ANDERS SJO
¨BERG,
1
KATHARINA NA
¨SWALL
1,2
and MAGNUS SVERKE
1,3
1
Stockholm University, Sweden
2
University of Canterbury, New Zealand
3
North-West University, South Africa
Sjo
¨berg, S., Sjo
¨berg, A., Na
¨swall, K. & Sverke, M. (2012). Using individual differences to predict job performance: Correcting for direct and indirect
restriction of range. Scandinavian Journal of Psychology 53, 368–373.
The present study investigates the relationship between individual differences, indicated by personality (FFM) and general mental ability (GMA), and job
performance applying two different methods of correction for range restriction. The results, derived by analyzing meta-analytic correlations, show that the
more accurate method of correcting for indirect range restriction increased the operational validity of individual differences in predicting job performance
and that this increase primarily was due to general mental ability being a stronger predictor than any of the personality traits. The estimates for single traits
can be applied in practice to maximize prediction of job performance. Further, differences in the relative importance of general mental ability in relation to
overall personality assessment methods was substantive and the estimates provided enables practitioners to perform a correct utility analysis of their overall
selection procedure.
Key words: Personality, general mental ability, job performance, range restriction correction, personnel selection.
Sofia Sjo
¨berg, Stockholm University, SE-106 91 Stockholm, Sweden. Tel: +46 7086 96888; e-mail: sofia.sjoberg@psychology.su.se
INTRODUCTION
An important issue in personnel selection research is to provide the
most correct estimates of the relationship between individual
differences and organizational outcomes like job performance
(Salgado, 2003; Salgado, Andersson, Moscoso, Bertua, De Fruyt &
Rolland, 2004; Schmidt & Hunter, 1998). In this area of research,
individual differences such as general mental ability (GMA) and
personality traits are often at the center of attention (Barrick &
Mount, 2003; Ones, Viswesvaran & Dilchert, 2005a, 2005b).
Measures of these constructs are sometimes combined to form a
suitability score for the applicant’s expected level of job perfor-
mance and, thus, the accurate weighting of these pieces of informa-
tion is fundamental in order to maximize the predictive power of
the overall assessment. Furthermore, knowledge about the predic-
tive power of the overall assessment is one of the prerequisites for
doing a correct utility analysis of the overall selection procedure
(Cascio, 2000; Schmidt, Hunter, Outerbridge & Trattner, 1986).
Although both theoretical and empirical research provide sup-
port for the notion that GMA and personality traits are of vital
importance for employee performance, the observed associations
often lack in precision (Schmidt, Schaffer & Oh, 2008). One
reason for incorrect estimates of the individual differences–job
performance relationship is underestimation, which often is due to
restriction of range in the measured predictors. Range restriction
occurs when the variance of a predictor in a sample is reduced
because of pre-selection in some way (Sackett & Yang, 2000).
The problem of range restriction in personnel selection research is
often due to the common practice of collecting data on the indi-
vidual differences variables in the restricted population (i.e., the
already selected individuals) while the results are generalized to
the unrestricted population (i.e., the applicant pool).
The overall aim of this study is to provide properly corrected
estimates for the relationship between individual differences and
job performance. Estimates calculated by applying the old and
new method of correcting for range restriction are presented to
determine the operational joint effect of GMA and personality on
job performance. More specifically, by providing estimates of
how each trait measure should be weighted in order to maximize
the prediction of job performance, we compare the incremental
validity estimates of GMA and personality assessment methods
relative to each other. The latter is relevant from a practitioner’s
perspective for designing and performing utility analyses of differ-
ent selection processes.
Direct versus indirect range restriction
Researchers interested in the relationship between individual dif-
ferences and job performance are faced with several artifacts that
may alter the magnitude of the observed correlation. One of these
artifacts is restriction of range in samples used to estimate the rela-
tionship between different predictors and criteria (Sackett & Yang,
2000). Recent research has indicated that traditional ways of han-
dling these problems, by correcting for direct range restriction
(DRR) and for measurement error in the criterion, has underesti-
mated the predictive power of both GMA and personality mea-
sures for job performance (Schmidt et al., 2008). A new
approach, presented by Hunter and Schmidt (2004), involves cor-
recting for indirect range restriction (IRR). This approach has
been shown to provide more accurate estimates of predictive
validity and supports the notion that single measures of individual
differences have greater power in predicting job performance than
previously known (Schmidt et al., 2008). Research applying this
method when investigating the relative importance among traits
Ó2012 The Authors.
Scandinavian Journal of Psychology Ó2012 The Scandinavian Psychological Associations. Published by Blackwell Publishing Ltd., 9600 Garsington
Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA. ISSN 0036-5564.
Scandinavian Journal of Psychology, 2012, 53, 368–373 DOI: 10.1111/j.1467-9450.2012.00956.x
suggests increased importance of GMA relative to personality
traits (Hunter, Schmidt & Le, 2006; Schmidt, Oh & Le, 2006).
Correction for range restriction is needed when the variance of
a variable in a sample is reduced because of pre-selection in some
way (Ree, Carretta, Earles & Albert, 1994; Sackett & Yang,
2000), and the most known and applied formula to correct for
range restriction in the research area of personnel selection has
been Thorndike’s (1949) case II formula. This formula assumes
DRR, meaning that the correction is based on the assumption that
the individuals applying for the job, the applicants, have been
selected directly on test scores top–down. For example, the valid-
ity of a test score for predicting sales potential in an organization
is often estimated using samples of persons within the sales orga-
nization, a restricted sample. Because of range restriction, the pop-
ulation of admitted employees typically have higher mean test
scores and a smaller standard deviation of the scores, resulting in
lower validity estimates. In order to estimate the validity in the
applicant population from the observed validity in the restricted
sample of employees, the case II formula corrects for the effects
of direct range restriction on the test scores.
The circumstances underlying the assumption of case II – that
the applicants have been selected directly on test scores top–down
– is rare in practice. Rather, applicants are typically selected on
some other indirect unknown variable that is correlated with the
test score, for example a composite of unmeasured variables of
applicant performance. In fact, almost all predictive validity stud-
ies have proven to include indirect selection in some way (Hunter
& Schmidt, 2004). In spite of this, the case II formula, and thus
correcting for DRR, has been used in almost all studies relating
test scores to job performance (Hunter et al., 2006), resulting in
partly inaccurate estimates of this relationship.
To overcome this problem, Thorndike presented, as early as
1949, a method for correcting for IRR. He called it the case III
formula. This formula has seldom been applied in practice
because it requires extensive information about the third, indirect
variable and, naturally, this is unidentified information in most
research studies. Instead, Hunter and Schmidt (2004) suggested a
new approach for correcting for IRR. Rather than using informa-
tion about the third variable, they suggested that, before correcting
for range restriction in the observed validity estimate, one should
correct for measurement error in both the test score and the crite-
rion. After correcting for measurement error, the correction for
range restriction should be applied and followed by a transforma-
tion to operational validity. This process makes it possible to cor-
rect for the indirect effect of a third variable without empirical
data on it. Hunter and Schmidt call their formula case IV (for a
full discussion and a mathematical derivation of this equation,
please see Hunter and Schmidt, 2004 and Hunter et al., 2006).
Extensive computer simulations have shown that as long as the
underlying assumption – that range restriction on the unmeasured
third variable creates IRR only on the predictor construct and has
no effect on the criterion construct – is not violated, then the case
IV formula is mathematically identical to Thorndike’s case III and
is very accurate (Le, 2003; Le & Schmidt, 2006). Even if the case
IV formula has been shown to undercorrect slightly for the effects
of range restriction when this assumption is violated, it is consid-
erably more accurate than the traditionally used case II formula
(Le, 2003; Le & Schmidt, 2006).
Individual differences
Personality. The Five-Factor Model (FFM) of personality is
perhaps the most widely known taxonomy of personality today,
and the accumulated empirical evidence about the relationship
between self-report measures of the FFM factors and job perfor-
mance across a wide variety of outcomes is extensive (Barrick,
Mount & Judge, 2001; Hogan & Holland, 2003; Ones &
Viswesvaran, 2001). The first factor of the FFM (Costa & McC-
rae, 1985), Neuroticism, is most often reversed to represent Emo-
tional Stability to facilitate interpretation. A high level of
Emotional Stability represents being calm, relaxed, and able to
handle stress without effort, whereas a low level represents being
anxious, hostile, personally insecure, and sometimes depressed.
Individuals with high levels of Extraversion are sociable, asser-
tive, active, and talkative, in contrast to individuals low in Extra-
version who are reserved, independent, and even paced. High
levels of Openness to Experience represent active imagination,
attentiveness to inner feelings, intellectual curiosity, and indepen-
dence of judgement. Low levels, on the other hand, typically rep-
resent a more conventional, conservative and limited need for,
and openness to, the content, magnitude and intensity of feelings
that flow within the individual. High levels of Agreeableness typi-
cally represent altruism, helpfulness, warmth, compliance, and
modesty, whereas low levels define individuals who are more dis-
agreeable, antagonistic, sceptical and critical towards other peo-
ple. High levels of the fifth factor, Conscientiousness, represent
being competent, dutiful, self-disciplined and well organized, in
contrast to being careless, irresponsible, lazy, impulsive, and low
in achievement striving which characterize those with low levels.
The magnitude of the relationship between job performance
and single traits, primarily measured with personality tests provid-
ing self-reports about the individuals’ own behaviors and reputa-
tions (Ones et al., 2005b), varies between studies. Meta-analytic
results show that Conscientiousness and Emotional Stability pre-
dict job performance consistently across jobs (Barrick et al.,
2001). The willingness to follow rules and to exert effort (high
Conscientiousness) and the capacity to allocate resources to
accomplish tasks (high Emotional Stability) have been suggested
to work as ‘‘will do’’ motivational components generalizable
across jobs and tasks (Barrick & Mount, 2005). The remaining
personality traits – Extraversion, Agreeableness and Openness to
Experience – seem to predict success in specific occupations and
for specific tasks (Barrick et al., 2001).
General mental ability. Research on general mental ability
(GMA, first introduced by Spearman in 1904), selection, job per-
formance, and economic utility is both extensive and provides
unambiguous results (Schmidt & Hunter, 2004). Briefly the results
may be summarized such that GMA is the strongest single predic-
tor of job performance. Research from Europe and North America
clearly shows that measures of GMA, in a superiorly cost-efficient
way, predict how people will perform in the workplace (Hunter,
1986; Salgado, Anderson, Moscoso, Bertua & De Fruyt, 2003;
Schmidt & Hunter, 1992; Schmidt et al., 1986). This relationship
has been shown to grow stronger with the complexity of the job,
and the results are consistent irrespective of the type of task being
performed, making GMA generalizable to predict performance in
Scand J Psychol 53 (2012) Using individual differences 369
Ó2012 The Authors.
Scandinavian Journal of Psychology Ó2012 The Scandinavian Psychological Associations.
different types of jobs (Hunter et al., 2006). Despite the convinc-
ing evidence for the validity and practical efficiency of GMA
measures to predict job performance, GMA tests are used spar-
ingly by employers in the process of personnel selection.
The combination of individual difference measures
The focus of previous research on GMA and two of the FFM
traits, Emotional Stability and Conscientiousness, is justifiable
taking into consideration their generic relationship with the crite-
rion of job performance. However, the process of assessing indi-
viduals in personnel selection procedures usually aims at taking
all relevant traits into consideration simultaneously. A more
applied approach would therefore be to consider the operational
validity of all relevant traits when used together. This latter
approach also creates awareness of, and corrects for, the relation-
ships among all traits (Schmidt et al., 2008). One example of this
would be the practical situation where a large number of appli-
cants are applying for the same job and are all tested on their
GMA and FFM trait levels.
In order for these six separate test scores to result in informa-
tion about each individual’s probable overall suitability for the
job, and thus guide the personnel decision whether to hire or not,
the parameters are weighted in some way to form a suitability
score. This weighting may not only impact the level of predictive
validity but it may also, and more importantly, have a severe
impact on the rank order of candidates. Furthermore, in the
applied setting the focus is usually on the assessment methods,
such as personality tests, GMA tests, assessment centers and so
forth, rather than on the underlying psychological constructs. For
practitioners, the choice is rarely between which constructs to
assess and incorporate into the assessment of suitability but rather
between which assessment methods to use. Presenting properly
corrected estimates of incremental validity for each assessment
method is not only relevant but necessary in order to enable prac-
titioners to estimate the utility of using the different methods sep-
arately and in combination in the selection process.
Job performance
In the present study, the criterion is overall job performance. The-
oretically, this criterion incorporates several aspects of human per-
formance in the workplace, including aspects of task and
contextual performance. However, in the primary studies underly-
ing the meta-analyses on which the present study is based, the job
performance data is primarily based upon supervisory ratings. In
this type of ratings contextual performance tends to be heavily
weighted which can impact the final results (Rotundo & Sackett,
2002). For more details concerning the criterion measure of job
performance, please see Schmidt et al. (2008).
The present study
The present study compares the methods of correcting for DRR to
the one used to correct for IRR by re-analyzing meta-analytic data.
First, the operational joint effect of individual differences on job
performance is presented along with estimates for each separate
trait. The properly corrected regression estimates for the joint
effect of GMA and all five FFM traits, and for the effect of sepa-
rate traits on job performance, have not been presented previously.
These estimates are necessary for the correct weighting of the sep-
arate traits and for obtaining the most accurate suitability scores.
Second, the properly corrected incremental validity estimates of
adding assessment methods, the GMA measure over personality
measures, and the reversed, are presented. The relative importance
of assessment methods, GMA in contrast to personality, is impor-
tant for the understanding of how to set up a selection process and
is necessary in order to estimate the utility gained of applying
each method.
METHOD
Data and measures
In order to provide the most stable estimates, data from previous meta-
analytic studies were re-analyzed. The underlying correlation matrix used
as input for the regression analysis was compiled from Schmidt et al.
(2008), although some of these data were originally gathered from other
studies. The uncorrected meta-analytic true score correlations among the
FFM traits were originally reported in Mount, Barrick, Scullen and
Rounds (2005), and the corresponding correlations between FFM and
GMA were originally published in Judge, Jackson, Shaw, Scott and Rich
(2007). The third part of the correlation matrix contains the bivariate
relationships among the predictors and job performance, which were
collected from Appendix D in Schmidt et al. (2008). The transformation
of the relationships among the predictors and job performance to DRR
and IRR respectively was computed applying the procedure suggested by
Schmidt et al. (2008). The FFM measures included are of self-report
character and the main part of the job performance criterion is based on
supervisory ratings (Judge et al., 2007; Mount et al., 2005; Schmidt
et al., 2008). The complete correlation matrix used is published in
Schmidt et al. (2008, Appendix C and D).
Analysis
In order to explore the relationship between the predictors (GMA and
personality traits) and the criterion of job performance, the latter was
regressed on the FFM traits and GMA. The overall relationship between
the predictors and the criterion is presented for DRR and IRR as multiple
correlations (R) and standardized regression coefficients were computed
for each separate predictor. The incremental validity of the two assess-
ment methods (GMA tests and personality tests) was computed by hierar-
chically regressing job performance on each assessment method and
varying the order; first adding the GMA test before personality measures,
and then the reversed.
RESULTS
The results of the regression analyses are presented in Table 1.
First, the multiple correlations (R) for DRR and IRR, respectively,
indicate the absolute level of operational validity of individual dif-
ferences on job performance. The results show that the absolute
level of validity increased substantially when applying IRR com-
pared to DRR, indicating that the DRR method underestimates the
operational validity of individual differences to predict job perfor-
mance. The standardized regression coefficients (b) for each sepa-
rate personality trait and GMA are presented both for DRR and
IRR displaying the relative importance among all six traits using
the two methods of correction. As mentioned above, the impor-
tance of GMA increased substantially when applying IRR, as
370 S. Sjo
¨berg et al. Scand J Psychol 53 (2012)
Ó2012 The Authors.
Scandinavian Journal of Psychology Ó2012 The Scandinavian Psychological Associations.
compared to DRR, and this effect was not observed for any of the
personality traits. The exceptional explanatory power of GMA
compared to self-reported personality in the prediction of job per-
formance, where GMA was twice as important as the most impor-
tant personality trait, Conscientiousness, was supported by the
results.
Second, the incremental validity of assessment methods is
presented in the rows denoted DRof Table 1. The incremental
validity of personality over GMA measures was modest while the
increase of GMA over personality was substantial, regardless of
correction method. Overall, these results are congruent with previ-
ous research highlighting that GMA, relatively speaking, accounts
for an extensively larger proportion of variance than all five
personality traits together. Nevertheless, the magnitude of the
incremental validity when applying IRR instead of DRR was con-
siderable, and the results obtained when using the IRR method
indicate that the operational validity of GMA measures is even
higher compared to self-reported personality measures than
previously known.
DISCUSSION
The aim of the present study was to provide properly corrected
estimates of the relationship between individual differences and
job performance. The contribution of these results to practitioners
is represented by the most accurately corrected estimates of the
operational predictive validity for all relevant traits jointly, sepa-
rately and combined into GMA and personality assessment meth-
ods. By including GMA and all five FFM traits the estimates
correspond more closely to the assessment methods of self-
reported personality measures and GMA tests in the applied pro-
cess of personnel selection. If a personality measure is used, a full
descriptive model almost always underlies the measure and the
information for the selection decision later on. Specific traits such
as Emotional Stability and Conscientiousness, which previous
research has presented estimates for (Schmidt et al., 2008), are
seldom extracted from the personality assessment, even if that
would be a defendable approach in some situations. Conscien-
tiousness and Emotional Stability might even be the two FFM
traits that practitioners consider the least important traits for job
performance, perhaps because the expression of these traits are
less visible to others (Connelly & Ones, 2010).
The results show that by applying the more correct method for
range restriction, IRR, the operational joint effect of individual
differences in predicting job performance increased substantially
compared to applying DRR. This is congruent with the results
presented by Schmidt et al. (2008) and acknowledges that this
type of restriction of range issues affects the estimates. The pat-
tern of relative importance among the personality traits were not
affected by method of correction and Conscientiousness was
found to be the most valid personality predictor. Nevertheless, it
is important to reflect upon the fact that Conscientiousness was
not even half as important as GMA, which increased in predictive
validity applying IRR compared to DRR. This inequality of rele-
vance among the traits is important to acknowledge and to incor-
porate (by correct weighting) in the assessment process in order to
maximize the predictive validity. Thus, the accurate weighting of
the observed scores corresponding to these traits makes it possible
to obtain the level of validity presented in the study, and the
continued presentation of relative regression estimates instead of
bivariate correlations enable practitioners to use the estimates for
weighting. Providing regression weights for GMA and all five
FFM traits also facilitates the use of a mechanical approach to
assessing suitability in contrast to applying an intuitive or holistic
approach (Highhouse, 2008).
The fact that practitioners rarely choose which psychological
constructs to assess, but rather focus on which assessment method
to use, is a motive for presenting the validity gained by using
methods assessing both GMA and self-reported personality. The
fact that assessment methods that measure individual differences
such as FFM traits and those that measure GMA do not have the
same predictive power of job performance has already been estab-
lished (Schmidt & Hunter, 1998). However, the results obtained
by using the more accurate method of IRR indicate that the differ-
ences in importance are even greater than previously known. Our
findings indicate that the substantive increase in operational joint
validity of individual differences in predicting job performance is
primarily due to a previously underestimated validity of GMA
when using the DRR method. The beta weights in our analyses
indicate that the assessment of GMA, compared to self-reported
personality assessments, represents an exceptionally strong predic-
tor of job performance and that the incremental operational valid-
ity of self-reported personality assessment over GMA assessment
is modest. Despite the fact that our results indicate that a personal-
ity assessment method does not add much predictive information
(even with all FFM traits included) above and beyond a measure
of GMA, it is important to acknowledge that even a small increase
in incremental validity can provide a substantive increase in utility
depending on the overall recruitment and selection circumstances
(Cascio, 2000). The incremental validity estimates enable a more
Table 1. Summary of regression analyses comparing direct and indirect
restriction of range in the prediction of job performance with individual
differences
Factor
DRR IRR
Step 1(b) Step 2(b) Step 1(b) Step 2(b)
Personality first
Emotional Stability 0.03 )0.02 0.02 )0.05
Extraversion 0.05 0.08 0.06 0.10
Openness )0.01 )0.11 0.00 )0.14
Agreeableness )0.01 0.00 )0.01 0.01
Conscientiousness 0.20 0.23 0.21 0.26
General mental ability 0.54 0.68
R0.22 0.57 0.23 0.71
DR0.35 0.48
GMA first
General mental ability 0.51 0.54 0.65 0.68
Emotional Stability )0.02 )0.05
Extraversion 0.08 0.10
Openness )0.11 )0.14
Agreeableness 0.00 0.01
Conscientiousness 0.23 0.26
R0.51 0.57 0.65 0.71
DR0.06 0.06
Note: DRR = direct restriction of range; IRR = indirect restriction of
range.
Scand J Psychol 53 (2012) Using individual differences 371
Ó2012 The Authors.
Scandinavian Journal of Psychology Ó2012 The Scandinavian Psychological Associations.
accurate utility analysis of these two assessment methods relative
to each other and in relation to other, more time consuming and
less valid methods (cf. Schmidt & Hunter, 1998).
Although assessing applicant level of GMA and taking
evidence-based results into account in the selection procedure is
becoming more common in Scandinavia, as in many other parts
of the world, it cannot be said to be common practice. Information
about the relative importance of different individual traits, includ-
ing the exceptional position of GMA in relation to job perfor-
mance, is often met with scepticism and discomfort. It is far more
common to assess personality, and the suggestion to leave out per-
sonality assessment from the selection process would probably
not only startle practitioners but be perceived as an unprofessional
suggestion. Nevertheless, the results still provide accurate validity
estimates for the two assessment methods GMA and self-reported
personality.
It is also important to note that the larger effect of correcting
for IRR on assessment methods of GMA compared to personality
indicates that organizations tend to select individuals with higher
GMA, even if they do not explicitly aim to. When it comes to
personality assessment, on the other hand, which was less affected
by range restriction, organizations seem to select individuals more
randomly (or at least not systematically) based on personality.
In summary, applying the more accurate method of range
restriction correction, IRR, generates somewhat different results
than the previously applied method of DRR when it comes to the
operational validity of individual differences in predicting job
performance.
The results of the present study provide stable arguments for
increased validity of individual differences as predictors of job
performance, primarily due to the even greater impact of GMA
measures, and provide clear evidence for the relative importance
of GMA and single personality traits, and between measures of
GMA and self-reported personality assessment overall. Further-
more, the present study provides practitioners with relative
weights for the different traits by taking an applied perspective
and including GMA and all five FFM traits. These weights are
necessary in applied practice and enable a mechanical approach
which will result in a suitability score with the highest possible
predictive validity for job performance.
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