Does GPA Matter?

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CollegeHuman resource professionals and universities have important roles in the hiring process for recent college graduates. Ideally, universities teach the requisite skills and evaluate student learning, while human research professionals screen by the educational institutions’ assessmentmeasures and ultimately hire based on a candidate’s fit with the demands of a job. The selection process can only be as effective as the competence and coordination between these groups, yet we contend that each party knows little about the actual day-to-day practices of the other. To address the issue, we would like to initiate an ongoing dialogue.

In this piece, we explore a commonly held belief among our peers in higher education that undergraduate GPA informs employers in screening undergraduates. Faculty and staff spend endless hours on committees ruminating on the particulars of academic policies, such as whether to use plus/minus grade systems, proper pass/fail options, how many courses may be repeated, and how long students should have to withdraw from courses. Every single point is treated as sacred.     

These commonsense beliefs find empirical support in the annual survey conducted by the National Association of Colleges and Employers (NACE).  In Job Outlook 2014, NACE indicates that 67 percent of their responding employer members screen by GPA, with a median of 3.0 being the cut-off.  However, it may be unwise to generalize the NACE results too quickly. One reason is that NACE members tend to be large firms, whereas, according to Susan Adams of Forbes, small firms are much less likely to screen by GPA. Additionally, the 2014 survey achieved a response rate of less than 20 percent (N=208, with only 159 even considering students with bachelor’s degrees). A mere 37 firms responding accepted applications from students with liberal arts degrees. The results do not seem to speak for many firms or to many undergraduates.  

A broader challenge can also be mounted against the general effectiveness of formal procedures in securing quality employment. Research dating back nearly half a century to Mark Granovetter’s seminal work, Getting a Job, indicates that the majority of jobs are learned about and many secured through informal networks. Beyond achieving the basic credential, who you know may matter more than how well you know (GPA).

Growing Dismissal of GPA?

We asked two senior-level college recruiters — a regional generalist (situated in Charlotte, N.C.) and another employed by a major financial institutional who performs searches for their prestigious analyst training program (headquartered in California) — about the recruitment of undergraduates.

The regional recruiter indicated that in his initial screening of recent college graduates, he pays attention to degree completion, internship/practicum, meeting minimum experience requirements, and software competency. From his experience, the client firms almost never relied on GPA; those few who did were even less likely to examine transcripts. 

The specialized recruiter for the large national financial firm described a more complex multistage recruitment process, but ultimately shared a similar message: GPA is valued little and transcripts are not explored in any detail prior to hire. The process included campus information sessions in prescreened schools, further screening of applicants’ materials, and a series of personnel interviews (often conducted by alumni employed by the financial institution). In screening resumes, he utilizedfield of study, scholarships, academic awards, GPA (no threshold and optional), internship/practicum, and evidence of leadership. The recruiter added that the firm’s legal office advised against reliance on GPA. When asked why, he listed two reasons: first, they have found little or no correlation between GPA and ability to perform the job; second, inconsistent grading policies between professors and universities creates inconsistencies when using GPA as a measurement.

Our recent published research supports the real-world lessons learned by these human resource practitioners in their devaluing of GPA as an effective sorting mechanism. Because of the changing nature of the academic market place, colleges are confronting growing pressures to recruit, retain, and graduate students. We show how universities sometimes play an active role in inflating students’ GPA by modifying academic policies such as withdrawal, repeats, and satisfactory/unsatisfactory grade options. Academic regulations often give students the power to selectively inflate their GPAs, making effective comparison of GPAs problematic and the standard 3.0 cutoff required by employers quite pedestrian.Overall, the widespread assumption made by academics that GPA is salient to recruiters and firms appears to be misinformed.  

Increasing the Value of GPA to Recruitment Professionals 

We propose a simple solution to restore GPA as an effective screening tool. We suggest that employers/recruiters should request the EAR (earned hour to attempted hours ratio) on all resumes, in addition to information on GPA. The measure would provide sufficient context to better frame an individual GPA.  

Earned and attempted hours are widely recorded by most registrars for all students. Earned hours include all credit hours for which students attain a passing grade (plus transfer credits), but excludes incomplete grades, withdrawals, and failing grades such as F or U grades (unsatisfactory performance). Typically, attempted hours include all hours a student enrolled for, which combine earned hours, plus transfer credits, plus those hours of withdrawn, failed, repeated courses, and unsatisfactory and outstanding incomplete grades. Much like a baseball batting average, an EAR of 1.0 indicates a student that earned a passing grade in 100 percent of the classes in which the student officially enrolled. On the other hand, a student with an EAR of 0.66 means that the student failed, dropped, repeated or has outstanding incomplete grades in one-third of all the courses attempted. 

To that end, both recruiters were excited about the EAR. First, they agreed it would quickly offer some important context to the increasingly irrelevant GPA. But more importantly, it offers a means to assess such intangible factors as “stick-to-it-ness” and work ethic. The regional recruiter thought it was analogous to “path history” for recent college graduates, where a low EAR might be seen in the same light as excessive job-hopping. The national recruiter echoed that it would be a “valuable additional data point.” The lower EAR is not necessarily an indicator of a character flaw. In fact, it could summon a story that reflects persistence and, in many situations, the overcoming of hardships. 

Our takeaway points are the following: 1. if established measures, such as GPA, are not useful beyond the academic walls, then universities and employers may need to jointly develop new measures, such as the EAR, to aid firms in selecting the strongest candidate; 2. both academics and human resource professionals need to establish more clear lines of communication to avoid inefficiencies in the sorting process. We hope this piece illustrates the benefits of such a discussion.

By Jonathan Marx and David Meeler