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In recent years, it has been advocated that capital budgeting and financial accounting techniques be used in evaluating the utility of human resources programs such as selection, training, and performance appraisal (Cronshaw & Alexander, 1985; Boudreau, 1983a, 1983b). We have demonstrated that many of these methods are often conceptually and logically inappropriate. We also showed that even in cases in which these techniques are logically applicable, their use may have unintended negative consequences. Finally, we discussed the question of the appropriate conceptual definition of utility. We conclude that different conceptual definitions of utility are useful under different circumstances; there is no single “correct” definition of utility.

This paper presents an empirical examination of the selectivity and market timing performance of a sample of U.S. equity pension fund managers. Regardless of the choice of benchmark portfolio or estimation model, the average selectivity measure is positive and the average timing measure is negative. However both selectivity and timing appear to be somewhat sensitive to the choice of a benchmark when managers are classified by investment style. Meta‐analysis revealed some real variation around the mean values for each measure. The 80 percent probability intervals for selectivity revealed that the best managers produced substantial risk‐adjusted excess returns. We also found a negative correlation between selectivity and timing, but we argue that the observed negative correlation in our data is largely an artifact of negatively correlated sampling errors for the two estimates.

Convergence, Regional house prices, Structural time series models, Trends and cycles, Unobserved components, C32, C33, E32, R11,

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