Federal regulations prohibiting discrimination in hiring require that employment selection procedures to evaluate applicants be based on job-related criteria. The preplacement physical examination used in employment, particularly in the placement of handicapped persons, must also be conducted in a job-related manner. This paper discusses the development and use of the physical examination in selecting and placing applicants for jobs in the workplace with special reference to handicapped persons and disabled veterans. It presents and justifies a method of performing these examinations in a manner consistent with humanistic and business goals as well as the goals of federal regulatory agencies prohibiting employment discrimination.