Adverse impact refers to when a selection method leads to a disproportionate percentage of members of a given group to be hired compared to another group. Your book describes how to decide if adverse impact is occurring. This exercise will help you assess your understanding of adverse impact.
Assume for this example that you are a human resources director of a large organization. You are interested in assessing whether a certain selection procedure is leading to adverse impact among minorities. With this information in mind, please answer the following questions.
1) To assess the adverse impact of the selection procedure, you need to know the selection ratio for minorities and non-minorities. What information would you need to calculate the selection ratio (a) for minorities and (b) for non-minorities?
2) Adverse impact is determined by the 4/5ths rule. Explain this rule.
3) You have collected the following data for the selection procedure you are interested in. 300 non-minorities and 40 minorities applied for a job with your organization. Using your selection procedure, 60 non-minorities and 6 minorities were selected. Based on this information, is there evidence of adverse impact? Write your calculations and reasoning below. Remember to take the perspective of the organization you work for (not the perspective of the minority group attorney) as you wish to keep your job.
4) If adverse impact is found to exist, what should the employer do?
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