Alternate Methods of Estimating the Dollar Value of Performance.

The standard deviation of performance quality measured in dollars, SD$, is critical to calculating the utility of personnel decisions. A popular technique for obtaining SD$ calls for supervisor estimates of the dollar value of performance at different levels. In many cases supervisors can base their estimates on the cost of contracting out the various levels of performance. Estimation problems can arise, however, in contexts where contracting out is not possible, such as in government organizations without private industry counterparts. Estimation problems may also exist where individual salary is only a small percentage of the value of the performance to the organization or of the equipment operated. This paper presents two strategies for estimating the value of performance and for determining SD$ by considering the changes in the numbers and performance levels of system units which lead to increased aggregate performance. One hundred U.S. Army tank commanders provided data about their jobs for these two strategies as well as for the supervisor estimation and salary percentage strategies. The new strategies appear to provide more appropriate and acceptable values of SD$ for those complex, expensive systems where dollar values of performance are less easily estimated.