type i and ii decision error costs

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Type I and II Decision Error Costs

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 to hire is made.

  • What are the Type I and Two decision errors 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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