There's a lot of psychology at play here.
Lauren Rivera, examined hiring processes in three types of elite professional service firms: investment banks, law firms, and management consulting firms. “These types of firms share important similarities, allowing for a robust comparison.”
Her results are fascinating.
You have 10 seconds to make an impression – most resumes go straight to the trash:
Because professionals balanced recruitment responsibilities with full-time client work, they often screened resumes while commuting to and from the office and client sites; in trains, planes, and taxis; frequently late at night and over take out… [E]valuators tended to do so very rapidly, typically bypassing cover letters (only about fifteen percent reported even looking at them) and transcripts and reported spending between 10 s to 4 min per resume.
The process is very subjective:
[M]ost firms did not have a standard resume scoring rubric that they used to make interview decisions, evaluators reported “going down the page” from top to bottom, focusing on the pieces of resume data they personally believed were the most important “signals” of candidate quality.
When evaluators do select resumes they try to pick out people like themselves:
[R]oughly one-third of evaluators did not use educational prestige as a signal. One of the primary differences between these two groups was their own educational history, with those who had attended “top” schools being more likely to use educational prestige as a screen than those who had attended other types of selective institutions.
Elite credentials matter
[E]valuators drew strong distinctions between top four universities, schools that I term the super-elite, and other types of selective colleges and universities. So-called “public Ivies” such as University of Michigan and Berkeley were not considered elite or even prestigious…
Elite schools are better signals (let other people do the pre-screening for you.) After all, no one ever gets fired for hiring a Harvard MBA:
Evaluators relied so intensely on “school” as a criterion of evaluation not because they believed that the content of elite curricula better prepared students for life in their firms – in fact, evaluators tended to believe that elite and, in particular, super-elite instruction was “too abstract,” “overly theoretical,” or even “useless” compared to the more “practical” and “relevant” training offered at “lesser” institutions…
[I]t was not the content of an elite education that employers valued but rather the perceived rigor of these institutions' admissions processes. According to this logic,
the more prestigious a school, the higher its “bar” for admission, and thus the “smarter” its student body.
In addition to being an indicator of potential intellectual deficits, the decision to go to a lesser known school (because it was typically perceived by evaluators as a “choice”) was often perceived to be evidence of moral failings, such as faulty judgment or a lack of foresight on the part of a student.
[E]valuators believed that the most attractive and enjoyable coworkers and candidates would be those who had strong extracurricular “passions.” They also believed that involvement in activities outside of the classroom was evidence of superior social skill; they assumed a lack of involvement was a signal of social deficiencies… By contrast, those without significant extracurricular experiences or those who participated in activities that were primarily academically or pre-professionally oriented were perceived to be “boring,” “tools,” “bookworms,” or “nerds” who might turn out to be “corporate drones” if hired.
But you can't signal that you are signalling.
Across the board, they privileged activities that were motivated by “personal” rather than “professional” interest, even when activities were directly related to work within their industry (e.g., investing, consulting, legal clinic clubs) because the latter were believed to serve the instrumental purpose of “looking good” to recruiters and were suspected of being “resume filler” or “padding” rather than evidence of genuine “passion,” “commitment,” and “well-roundedness.”
Do evaluators think that grades are an indicator of intelligence?
[M]ost evaluators did not believe that grades were an indicator of intelligence. Rather, they provided a straightforward and “fair” way to rank candidates, particularly those within a given school… [G]rades were used to measure a candidate's moral qualities. An attorney (Asian-American, male), believed that grades were an indication of a candidate's coping skills, “It tells me how they can handle stress; if they'd had their feet to the flames before. If they've gotten good grades at a very competitive school, they're probably pretty sharp and can take care of themselves.”
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(1) Rivera, Lauren. 2011. Ivies, Extracurriculars, and Exclusion: Elite Employers' Use of Educational Credentials. Research in Social Stratification and Mobility. 29: 71-90. http://www.sciencedirect.com/science/article/pii/S027656241000065X
(2) Caplan, Bryan. 2011. How Elite Firms Hire: The Inside Story. Library of Economics and Liberty. http://econlog.econlib.org/archives/2011/11/how_elite_firms.html