Contextualization is a key feature of many selection procedures. It is assumed that placing applicants into a job-related context contributes to validity by increasing the point-to-point correspondence with the criterion. Yet, a job-related contextual frame might also have unintended effects, such as disadvantaging applicants who possess the desired knowledge, skills, and abilities, but lack context-specific experience. In our theorizing, we draw on narrative comprehension models and introduce the key concept of context familiarity to develop hypotheses related to three different contextual frames: a job-related context, an everyday context, and an idiosyncratic context. With data from two online sample providers, we investigated the impact of contextualization variations in situational judgment test (SJT) items on applicant perceptions and subgroup differences. Results showed that subgroup differences were smallest in a job-related context compared to everyday and idiosyncratic contexts. In terms of applicant perceptions, we found that perceived cognitive load was significantly higher in less familiar contexts, while test anxiety was not. Test anxiety served as a mediator in the relationship between ethnicity and SJT scores regardless of the contextualization format. There was also some evidence of lower test motivation in the ethnic minority group when SJT items contained an everyday context. These findings highlight the role that contextualization can play in the search for selection procedures that produce lower subgroup differences and a positive candidate experience.
