1. What does r^2 mean in this context?
2. Is it ethical for colleges to base admissions and financial aid decisions on scores alone?
3. 
   

Croatian Transmission System Operator, Ltd. is one of national electricity grid operators in the EU. As a state-owned enterprise, and as a relatively big employer of university graduals (mostly electrical engineers, lawyers and economists), the company strives to provide equal opportunities for job seekers. Once they get the jobs and work a while, their university scores can be compared to job performance evaluations. Recently, the company asked three levels of managers superior to each of 30 entrants with master degree from the last ten years to grade them. The average grades were then compared to the university scores from the HR records (not available to the managers). The 32 interviewed managers were not told what the purpose of the exercise was. The result was surprising: 2 between the two grades was as low as 0.014, meaning that merely 1.4 percent of person's subjective evaluation by her/his superiors is explainable by university scores. Even more, the F-test revealed that probability of wrongful rejection of the hypothesis r0 was as high as 75%. This example opens a lot of ethical questions: Can University scores be used as (one of) legitimate selection criteria in equal-opportunity job contests? Can companies rely on these scores as a reasonable forecast of future job performance? Is it OK to teach students that they would get better jobs with higher university scores? Is it even important to score students with more detailed grades than just pass/fail? Will persons graduated with honors do better than their less successful colleagues or is it just a reflection of modern obsession with test scores and best performance?