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Using Tests to Determine Potential Discriminatory Practices

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(4/5ths rule, restricted policies, geographic comparisons, and the McDonnell-Douglas Test) How could a human resource management (HRM) department use these tests to determine potential discriminatory practices? What considerations should be given when using these tests?

The 4/5ths Rule One of the first measures of determining potentially discriminatory practices is a rule of thumb called the 4/5ths rule. Issued by the EEOC in its Uniform Guidelines on Employee Selection Procedures, the 4/5ths rule helps assess whether an adverse impact has occurred. Of course, the 4/5ths rule is not a definition of discrimination. It is, however, a quick analysis to helps assess HR practices in an organization. Moreover, in applying the 4/5ths rule, the Supreme Court ruled in Connecticut v. Teal (1984) that decisions in each step of the selection process must conform to the 4/5ths rule. To see how the 4/5ths rule works, suppose we have two pools of applicants for jobs as management information systems analysts. Our applicants' backgrounds reflect the following: 40 applicants are classified in the majority and 15 applicants are classified as members of minority populations.29 After we test and interview, we hire 22 majority and 8 minority members. Is the organization in
compliance? In this case, we find that the company is in compliance; that is, the ratio of minority to majority members is 80 percent or greater (the 4/5ths rule). Accordingly, even though fewer minority members were hired, no apparent discrimination has occurred. Remember, whenever the 4/5ths rule is violated, it indicates only that discrimination may have occurred. Many factors can enter in the picture. Should the analysis show that the percentage is less than 80 percent, more elaborate statistical testing must confirm or deny adverse impact. For instance, if Company A finds a way to keep most minority group members from applying in the first
place, it need hire only a few of them to meet its 4/5ths measure. Conversely, if Company B actively seeks numerous minority-group applicants and hires more than Company A, it still may not meet the 4/5ths rule. Restricted Policy A restricted policy infraction occurs whenever an enterprise's HRM activities exclude a class of individuals. For instance, assume a company is restructuring and laying off an excessive number of employees over age 40. Simultaneously, however, the company is recruiting for selected positions on college campuses
only. Because of economic difficulties, this company wants to keep salaries low by hiring people just entering the workforce. Those over age 39 who were making higher salaries are not given the opportunity to even apply for these new jobs. These actions may indicate a restricted policy. That is, through its hiring practice (intentional or not), a class of individuals (in this case, those protected by age discrimination legislation) has been excluded from consideration. Geographical Comparisons A third means of supporting discriminatory claims is through the use of a geographic comparison. In this instance, the characteristics of the potential qualified pool of applicants in an organization's hiring market are compared to the characteristics of its employees. If the organization has a
proper mix of individuals at all levels in the organization that reflects its recruiting market, then the company is in compliance. Additionally, that compliance may assist in fostering diversity in the organization. The key factor here is the qualified pool according to varying geographic areas. McDonnell-Douglas Test Named for the McDonnell-Douglas Corp. v. Green 1973 Supreme Court case,30 this test provides a means of establishing a solid
case.31 Four components must exist:32
1. The individual is a member of a protected group.
2. The individual applied for a job for which he or she was qualified.
3. The individual was rejected.
4. The enterprise, after rejecting this applicant, continued to seek other applicants with similar qualifications.
If these four conditions are met, an allegation of discrimination is supported. It is up to the company to refute the evidence by providing a reason for such action. Should that explanation be acceptable to an investigating body, the protected group member must then prove that the company's reason is inappropriate. If any of the
preceding four tests are met, the company might find itself having to defend its practices.


Solution Preview

How can a business protect itself from discrimination charges?

In order to protect itself from discrimination charges, a business needs to be in compliance with the four tests as stated within the 4/5ths rule, the laws of restricted policies, laws related to geographical comparisons, as well as the McDonnell-Douglas test. The four test basically seek to protect the interests of the minority who usually are the easiest targets for discrimination during employment and hiring ...

Solution Summary

The solution discusses how a HR management (HRM) department could use specific tests to determine potential discriminatory practices.