The principle of employee selection is relatively simple: HR managers collect and combine current information on candidates. Despite the best process, information and analysis, the selection is like predicting the future (i.e., how well they will perform a job). Predicting future performance and human behaviour is known to be very difficult. People are complex and their behaviour is not as predictable as what we would like to think. Errors in our assessment and selection of candidates do happen. The mistakes, or errors, that occur can be put in two separate categories, Type I or Type II.

Type I error: This error occurs when you select someone who turns out to be a poor performer. Type 1 errors, or ‘false positive’ errors[1]‘, are relatively easy to detect and we all have examples of people who obtain jobs for which they were ill-suited. These errors are costly for organizations: production or profit losses, damaged public relations or company reputation, accidents due to ineptitude or negligence, absenteeism, etc. in addition to the costs associated with training, transfer, or terminating the employee. Costs of replacing the employee, the third type of cost, includes costs of recruiting, selecting, and training a replacement. Generally, the more important the job, the greater the costs of Type I errors.  A spectacular example of a Type I error occurred in the US Space Program and NASA. The incredible story of astronaut Lisa Nowak is an example of the fact that even the most rigorous selection system can lead to Type I errors.

Player holding Stanley cup

Type II error: This error takes place when a selection process fails to detect a potentially good performer. Type II errors are different than the first type in that they are harder to detect (i.e., the person is never given a chance to perform) – and predicting the future was difficult. As a result, costs associated with ‘false negative’ errors, as they are also referred to, are generally difficult to estimate. A context in which the impact of a false negative can be detected and measured is in professional sports. In the 1984 National Hockey League draft, Patrick Roy, one of the greatest goaltenders of all time and quite possibly the best clutch goaltender in NHL playoff history, was not taken until the third round. For all of the NHL teams that passed him over (twice, some three times!), he was definitely a Type II error!

It is clear that organizations would want to minimize these selection errors as much as possible. However, doing so can be quite tricky because the two types of errors are negatively related to each other. Think of the NASA example. NASA, to make sure that all astronauts have the ‘right stuff’, relies on one of the most rigorous selection system ever designed (for those interested, check out the selection process for Mars One, aimed to establish a permanent human settlement on Mars). While this process will be effective in minimizing Type I errors (false positive), it will inevitably lead to many Type II (false negatives) and screen out potentially strong candidates. Conversely, an organization that wants to minimize Type II (i.e., make sure that it does not let ‘diamonds in the rough’ slip away), will inevitably suffer from a higher rate of Type I errors. Thus, Type I and Type II errors are related and one or the other is inevitable for organizations. The objective is to simply minimize them or even better, make less of these errors than your competitor.

Making The Offer

‘Making the Offer’ step is by no means the easiest or least important.

Constructing a formal written offer is often preceded by one or more discussions between the HR professional and/or the hiring manager, and the selected candidate. These discussions involve confirmation of the total compensation and specifics, start date, probationary period (if applicable), vacation, any special accommodations required, incentives (eg. signing bonus and claw-backs), relocations expenses and legal considerations or agreements (eg. non-compete, confidentiality agreements, parachute clause).
It is also important to establish and document, in the offer, the timeframe for the candidate to accept the offer. It is customary practice to a establish a reasonable timeframe while not notifying other short-listed candidates not selected in order to provide a backup plan in the event your selected candidate does not accept the offer.

It is not unusual to engage in negotiations of the final terms and conditions of employment and therefore, the final offer. Much of this can be avoided early in the selection process by setting expectations and discussing with each candidate interviewed, e.g. if the candidate expects a salary or total compensation package that is significantly outside the bounds of the job. You do not want to invest a lot of time and resources to get the offer stage only to find out that there was a gap or misunderstanding that eliminates the candidate and stops the offer.

Finally, the offer step is one that you want to ensure is a positive and efficient process for the selected candidate – making a good impression on behalf of the company is essential. You do not want to lose your top candidate or have them begin the job with a bad taste in their mouth and doubting their decision.


Falcone, P., “The New Hire: Five Questions to Ask before Making the Job Offer,” n.d.,, accessed July 13, 2011,

  1. The terms 'false positive' and 'false negative' are used in any contexts in which testing occurs. We are now all very familiar with these terms in the context of testing for COVID-19.


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Human Resources Management - 2nd Ontario Edition Copyright © 2022 by Elizabeth Cameron is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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