Final answer:
Reliable selection procedures are critical for organizations to screen potential employees effectively, helping to mitigate risks associated with hiring, such as asymmetric information. They include evaluating educational background, accolades, and professional references to identify suitable candidates.
Step-by-step explanation:
Reliable selection procedures are essential to an organization because they significantly reduce the risks associated with asymmetric information in the labor market. Employers face a challenge similar to that of a used car buyer; they want to avoid hiring a 'lemon' or a poor-quality employee. To mitigate this risk, employers implement selection procedures such as requiring degrees from certain schools, considering academic awards, evaluating high grade point averages, and seeking professional references as indicators of a candidate's work ethic, perseverance, and ability. These practices are important because skills can be taught, whereas personality and core attributes are more difficult to change once an employee is hired.