Utility analysis is a method used to evaluate human resource decisions on a financial basis. Current methods depend on an assumption that individual performance and value of performance share at least a linear relationship. This study examined several group dynamics factors, expected to be present in a typical organizational setting, which may cause violation of this critical assumption. These factors were group versus individual performance, social norms for effort and performance, and situational constraints. Results of a survey from over 500 computer programmers provided support for the prediction that these factors caused violation of the assumption of a linear, deterministic relationship between performance and value of performance. Computer simulations were then conducted to determine the extent of bias introduced into the utility analysis process resulting from these effects. Results indicated that current methods of estimating selection utility may overestimate true utility by as much as 32 percent. Limitations and extensions of the findings are also discussed
