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Adverse Impact Analysis AKA: Disparate Impact

April 7, 2009. John Paneto. 2. Math Functions. Numerator 6Denominator 1006 divided by 100 = .06 or 6%. April 7, 2009. John Paneto. 3. Termination Rate Slide 1. For any kind of adverse personnel action(e.g. termination, layoff, disciplinary action)determine which termination rate is thelowest, and compare all others to it. .

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Adverse Impact Analysis AKA: Disparate Impact

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    1. April 7, 2009 John Paneto 1 Adverse Impact Analysis AKA: Disparate Impact

    2. April 7, 2009 John Paneto 2

    3. April 7, 2009 John Paneto 3 Termination Rate Slide 1 For any kind of adverse personnel action (e.g. termination, layoff, disciplinary action) determine which termination rate is the lowest, and compare all others to it.

    4. April 7, 2009 John Paneto 4 Termination Rate Slide 2 The lowest termination rate becomes the numerator, the higher rate becomes the denominator.

    5. April 7, 2009 John Paneto 5 Example #1 Males (Adverse Impact Analysis for Women) Out of 100 male employees, 6 males are layed off Determine rate for male employees 6 divided by 100 = .06 or 6 % 6 = .06 or 6% 100

    6. April 7, 2009 John Paneto 6 Example #1 Females Out of 50 female employees, 5 females are layed off. Determine rate for female employees. 5 divided by 50 = .10 or 10 % 5 = .10 or 10% 50

    7. April 7, 2009 John Paneto 7 The 80% Rule or 4/5’s Rule Adverse Impact is defined as a substantially different rate of selection in hiring, promotion, or other employment decision which works to the disadvantage of members of a race, sex, or ethnic group in the Uniform Guidelines on Employee Selection Procedures.

    8. April 7, 2009 John Paneto 8 Termination Ratio Termination rate of group with lowest rate Divided by Termination rate of group in question

    9. April 7, 2009 John Paneto 9 Termination Ratio for Females Termination rate for males .06 or 6% Divided by Termination rate for females .10 or 10% .06 =.60 or 60 % .10 Compare termination ratio to .80 or 80% If less than 80% there is Adverse Impact

    10. April 7, 2009 John Paneto 10 Determining Adverse Impact on Minority Groups

    11. April 7, 2009 John Paneto 11 Example #2 Whites & Hispanics Out of 1000 white employees, 40 whites are layed off. Out of 20 Hispanic employees, 4 Hispanics are layed off.

    12. April 7, 2009 John Paneto 12 Example #2 Termination Rate for Whites & Hispanics Whites: 40 divided by 1000 = .04 or 4% Hispanics: 4 divided by 20 = .20 or 20%

    13. April 7, 2009 John Paneto 13 Termination Ratio for Whites & Hispanics Whites Termination Rate = .04 or 4% Hispanics Termination Rate = .20 or 20% Hispanics Termination Ratio = .20 or 20% Compare termination ratio to 80% Adverse Impact? Yes!

    14. April 7, 2009 John Paneto 14 Example # 3 Whites & Blacks Out of 500 White employees, 50 Whites are layed off. Out of 100 Black employees, 11 Blacks are layed off.

    15. April 7, 2009 John Paneto 15 Termination Rate for Whites & Blacks Whites: 50 divided by 500 = .10 or 10% Blacks: 11 divided by 100 = .11 or 11%

    16. April 7, 2009 John Paneto 16 Termination Ratio Whites & Blacks Whites Termination Rate: .10 Blacks Termination Rate: .11 Blacks Termination Ratio: .909 or 91% Compare termination ratio to 80% Adverse Impact? No!

    17. April 7, 2009 John Paneto 17 Example #4 Whites & Asians Out of 200 White employees, 30 whites are layed off. Out of 10 Asian employees, 1 Asian is layed off.

    18. April 7, 2009 John Paneto 18 Termination Rate for Whites & Asians Whites: 30 divided by 200 = .15 or 15% Asians: 1 divided by 10 = .10 or 10%

    19. April 7, 2009 John Paneto 19 Termination Ratio for Whites & Asians White Termination Rate .15 Asian Termination Rate .10 Adverse Impact ? Note: Since the termination rate for Asians is less than the termination rate for Whites, it is not necessary to determine the termination ratio for Asians.

    20. April 7, 2009 John Paneto 20 Disabled & Vietnam Era Veterans Considerations #1 Adverse Impact Analysis should be conducted for Disabled Employees and Vietnam Era Veterans similar to the other groups. Compare Disabled to rest of workforce.

    21. April 7, 2009 John Paneto 21 Disabled & Vietnam Era Veterans Considerations #2 Compare Termination Rate for Disabled Employees and Termination Rate for Non-Disabled Employees. Total Agency Workforce: 828 Present Disabled Workforce: (Minus) 102 Total Non-Disabled Workforce: 726 Number of Non-Disabled Employees to be terminated: 37 Termination Rate for Non-Disabled: .05 or 5% (37 ÷ 726)

    22. April 7, 2009 John Paneto 22 Disabled & Vietnam Era Veterans Considerations #3 Present Disabled Workforce: 102 Disabled Employees to be terminated: 8 Termination Rate for Disabled: .08 or 8% Termination Ratio for Non-Disabled: 5% ÷ 8% = .625 or 62.5% Adverse Impact? Yes.

    23. April 7, 2009 John Paneto 23 The End

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