Below is the first blog in a series that will discuss broad-based Industrial & Organizational (I/O) topics. The series will continue for the next several months and cover important questions and topics for HR professionals.
In the world of HR, it can often be difficult to know where a new endeavor should begin. There are many different laws and regulations across the country, various priorities within in organizations, and a need to keep up in a competitive environment. What should the foundations of the decision-making process be when there are all these different voices and ideas to keep in mind? One of the most important tools in any HR professional’s toolbox should be the Uniform Guidelines on Employee Selection Procedures. The Uniform Guidelines were developed by the EEOC in accordance with Title VII in 1978 to provide a framework for employers to assess whether employment testing and selection procedures were lawful under Title VII. The Guidelines outline the manner in which selection procedures (such as tests, interviews, and reference checks) should be administered and monitored. Thus, familiarizing oneself with the Guidelines will provide a useful base of knowledge for almost any HR professional.
The basic principle of the Guidelines is that any HR practice that has an Adverse Impact on a protected group is unlawful if it is not job-related and consistent with business necessity. Adverse Impact, often used interchangeably with the term Disparate Impact, refers to practices that may appear neutral but have a discriminatory effect. This principle is where the idea of the Four-Fifths Rule comes into place—if any protected group is being selected at a rate that is less than 80% (the number itself is a rule of thumb, rather than a legal definition) of the rate that another protected group is being selected, that is typically considered Adverse Impact. For example, say a company is hiring entry-level engineers using a scored test and has an applicant pool that contains 50 females and 100 males. If the company hires 30 of the females (60%) and 80 of the males (80%), then the Four-Fifths Rule would be violated (60% / 80% = 75%). If there are no valid defenses as to why one group is selected at a rate that is less than 80% of the favored group, then this would be considered Adverse Impact. The lower selection rate could be defended as lawful under Title VII if the procedure is a valid predictor of performance and cannot be replaced via another method that does not produce the Adverse Impact. For instance, if the organization utilizes a selection test to screen employees that is shown to be a valid predictor of objective measures of performance, and that test is not found to have a clear replacement, then that test may be used. However, it should be noted that any employer that is knowingly using a selection procedure that results in Adverse Impact may be playing with fire—they will need to be able to prove that they explored other options, that those other options aren’t as valid, and that the validity measures they used are objective.
One big question that often comes up in these discussions is: What is meant by Validity? Validity essentially refers to whether there is evidence that a practice is effectively doing what it is meant to do, and there are three different approaches to assessing validity. Criterion-related validity refers to whether a selection procedure accurately measures an outcome. Going back to the example above, if the selection test is found to accurately account for a statistically significant portion of employee performance, then it has Criterion Validity. The second approach is Content Validity, which is an assessment of whether the procedure accurately covers the content of the construct that it is measuring, and this is typically determined by having Subject Matter Experts (SMEs) review of the practice. For instance, if a company develops an Assessment Center (AC) procedure to select engineers, and it has a panel of SMEs evaluate whether the AC is an accurate representation of the engineering role, they can establish Content Validity. The final approach to validity is Construct Validity, which is determining whether a procedure accurately measures specific characteristic(s) that are proven to be important to the role. For instance, if a company has data that shows that leadership skills are predictive of performance in managerial roles, and they have candidates take a leadership assessment as part of the promotion decision process, then this assessment has Construct Validity if it accurately measures leadership ability. More in-depth details regarding validity will be covered in a later Blog post in this series!
The Guidelines go much further on all of these topics and more. They lay out, in detail, the technical standards required to establish Validity in many different cases. In addition, they describe when cut-off scores can be used, when Job Analysis is needed, and what level of documentation is required, to name a few of the other topics. It is a robust document that any HR professional involved in Selection, Retention, or Compensation should be familiar with, as these types of decisions are all connected. A company cannot have equitable compensation without equitable hiring and promotion decisions. As such, we highly recommend a more in depth look at the Uniform Guidelines here, and that you come back to read the rest of the Blogs in this series that will cover Job Analysis, Validation Studies, and more!