Adverse Impact

Definition

Adverse impact refers to the disproportionately negative effect that an employment practice or policy may have on a protected group, such as race, color, religion, sex, or national origin. It is a critical consideration in the employee selection process to ensure fairness and compliance with anti-discrimination laws.

5 Must Know Facts For Your Next Test

1. Adverse impact is a key consideration in the employee selection process, as employers must ensure that their selection criteria do not disproportionately exclude or disadvantage protected groups.
2. The 80% rule, also known as the four-fifths rule, is a commonly used statistical test to determine if an employment practice has an adverse impact on a protected group.
3. Employers must demonstrate that any employment practice or policy with an adverse impact is job-related and consistent with business necessity, and that there are no alternative practices with less adverse impact.
4. Adverse impact can occur at various stages of the employee selection process, including recruitment, testing, interviews, and final selection decisions.
5. Addressing adverse impact is not only a legal requirement but also a moral and ethical responsibility for employers to promote diversity, equity, and inclusion in the workplace.

Review Questions

• Explain the concept of adverse impact and its significance in the employee selection process.
  • Adverse impact refers to the disproportionately negative effect that an employment practice or policy may have on a protected group, such as race, color, religion, sex, or national origin. It is a critical consideration in the employee selection process because employers have a legal and ethical responsibility to ensure that their selection criteria do not unfairly exclude or disadvantage individuals based on their membership in a protected group. Addressing adverse impact is essential to promote fairness, diversity, and compliance with anti-discrimination laws.
• Describe the 80% rule (or four-fifths rule) and its role in evaluating adverse impact.
  • The 80% rule, also known as the four-fifths rule, is a commonly used statistical test to determine if an employment practice has an adverse impact on a protected group. It compares the selection rate of the protected group to the selection rate of the group with the highest selection rate. If the selection rate of the protected group is less than 80% of the highest selection rate, it is generally considered to have an adverse impact. This statistical analysis helps employers identify potential issues with their selection procedures and take appropriate actions to address any disproportionate exclusion of protected groups.
• Analyze the employer's responsibilities in addressing adverse impact, including the legal and ethical considerations.
  • Employers have a legal and ethical responsibility to address adverse impact in the employee selection process. Legally, they must demonstrate that any employment practice or policy with an adverse impact is job-related and consistent with business necessity, and that there are no alternative practices with less adverse impact. Ethically, employers should strive to promote diversity, equity, and inclusion in the workplace by ensuring that their selection criteria do not disproportionately exclude or disadvantage protected groups. Addressing adverse impact is not only a compliance requirement but also a moral imperative to create a fair and inclusive work environment that values the contributions of all individuals, regardless of their race, color, religion, sex, or national origin.

Related terms

Disparate Impact: The statistical analysis used to determine if an employment practice has an adverse impact on a protected group, typically measured by the 80% rule or the four-fifths rule.

Protected Group: A group of individuals that are protected from discrimination based on characteristics such as race, color, religion, sex, national origin, age, disability, or genetic information.

Uniform Guidelines on Employee Selection Procedures: A set of federal regulations that provide guidance on how to evaluate the impact of employee selection procedures and ensure compliance with anti-discrimination laws.