Statistical Analysis of Adverse Impact

Written with human resources professionals, in-house counsel and employment lawyers in mind, readers are introduced to the statistical analysis of adverse impact. Various tools for examining disparate impact are presented in a non-technical manner. Concrete examples and simple calculations demonstrate how these statistical tools can be applied to questions of adverse impact in hiring, promotion, and termination decisions. Traditional areas of vulnerability to adverse impact are discussed, and some emerging areas with potential for adverse impact, such as the use of social media in recruiting and current employment status as a candidate screening tool, are presented. The underlying sources of vulnerability are explored and pending legislation is discussed. The importance of litigation avoidance is stressed, and suggestions for minimizing the risk of employment litigation with proactive statistical analysis are provided. The goal is to give human resources professionals and legal counsel a better understanding of the information their statistical consultants are providing. This leads to an improved ability to identify and correct problem areas that may exist within the organization, as well as to prevent problems from arising in the future.