Correlation
refers to any of a broad class of statistical relationships involving dependence.
is the relationship between an event (the cause) and a second event (the effect), where the second event is understood as a consequence of the first.
Two variables that are correlated does not mean that one s necessarily is the cause of the other. One good example from the TedX Talk by Ionica Smeets. The graph below shows a positive correlation between number of drownings in the US and ice cream sales. Does that mean that ice cream causes drowning of is there some underlying variable that we don't know which really causes drowning? In this case, the causal factor is nice weather (actually swimming). When the weather is nice, people will go swimming increasing the chances of drowning with respect to the colder weather.
Why is u understanding causality important for HR?
Because in HR we have infinite amounts of data floating around and we are trying to make meaning out of them. I will go through only one example for this post and might elaborate more in the future.
Think that as HR you have decided to give people 10% more days off in a year and saw that employee engagement increased meaningfully in the following year. You really want to believe that your 10% favor caused the increase in engagement, right? This might or might not be the case. To be able to figure out if there is a causal relationship or not you can do two things:
1. Have a control group in you sample where no increase is given (but make sure that both samples represent your population) and compare the engagement of your groups
2. Control other variables (by keeping them constant or controlling them through statistical analyses) which might be causing employee engagement. Did you give any other incentives? Was there a major change in the environment? Was there a major change in the lives of your employees outside the work life (e.g. a governmental project supporting working parents' babysitting needs, a subway station built close by to your company decreasing the commuting time)?
You better understand the causal relationship between two variables in your HR practices, otherwise; you might end up making your recruitment decisions from IQ scores for your candidates by measuring their head circumference like Francis Galton did in the 1880s :)
Here are more food for thought about correlation vs causation in Human Resources Practice: