Adverse Impact

Adverse impact has received considerable attention since the passage of the 1964 Civil Rights Act. More specifically, Title VII of this act refers to issues regarding employee selection. The legislative and judicial fields have worked on defining and interpreting the law. Over 45 years of case law and interpretation have helped to define it’s meaning. Adverse impact has been defined as an employment decision that results in negative consequences more often for members of one protected group compared to other groups based on race, gender, age or national origin. The most definitive test of adverse impact is the four-fifths or 80% rule. Adverse impact refers to percentages and not raw numbers. Adverse impact means that protected groups should be selected at a minimum of 80% rate compared to the majority group. Members of protected groups should also be selected in percentages that are representative for the geographic area where applicants are recruited from. Applicants should be qualified to meet minimum qualifications, such as a high school diploma or GED certificate. All qualifications for applicants should be based on job analysis findings which define the knowledge, skills, abilities and other characteristics required for successful performance. If a selection procedure is determined to result in adverse impact, it must be shown to be a valid predictor of performance. Additionally, the employer should seek to find alternative procedures to eliminate the adverse impact.

GAN continuously completes adverse impact analyses on its entire selection procedure. As discussed, when determining adverse impact, the relevant work force must be considered.

Adverse impact is also a function of recruitment. With recruitment, qualified applicants can be available for the selection pool, which will reduce or eliminate adverse impact.