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The HR department is trying to fill a vacant position for a job with a small talent pool. Valid applications arrive every week or so, and the applicants all seem to bring different levels of expertise. For each applicant, the HR manager gathers information by trying to verify various claims on resumes, but some doubt about fit always lingers when a decision to hire or not is to be made. What are the type I and II decision error costs? Which decision error is more likely to be discovered by the CEO? How does this affect the HR manager’s hiring decisions?

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Answer:

Type 1 decision error cost and Type 2 decision error cost

Explanation:

Type 1 decision error cost has to do with recruiting the wrong candidate or person specification for the job, type 1 error are expensive to the organization and frustrating to the employees. Type 2 decision error cost has to do with the opportunity cost forgone, when the right candidate which could have been hired, was not hired.

The CEO is likely to discover the Type 1 decision error cost

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