If You are Using Tests as Screening Tools BEWARE!

The Uniform Guidelines on Employee Selection Procedures was passed in 1978 and it set the standards that employers must meet when applying screening tools or tests in the process of selecting employees for hiring, promotion, training or whatever. It defined the test for adverse or disparate impact (the 80% Rule or the Four Fifths Rule) and set the standards companies must use when using “tests.” But based on a recent lawsuit the message has been sent that if you are using tests as screening tools BEWARE!
Tom Starner, writing in Human Executives Online, reported on a case in which “…a Denver-based cheese and dairy producer, agreed to pay $550,000 in back pay and lost benefits (to those it didn’t hire) in a settlement of the DOL’s allegations that the company created artificial barriers for minority job applicants through its use of pre-employment testing.” Yes, you read that correctly OVER half a MILLION dollars! The company was using a basic mathematics test to assess candidates “basic skill.” They applied this to everyone including laborers. The Department of Labor ruled that this test used “…in its application process had an adverse impact on minority job applicants because it tested applicants’ skills in math and observation, skills unrelated to laborer jobs.” According to Christine Riordan, dean and a professor of management at the Daniels College of Business at the University of Denver, as quoted by Starner, “The dilemma, …, is that while leading psychologists have shown that ability tests (usually written) are exceptional predictors of job performance, use of these tests typically results in adverse impact — meaning employers using these tests are less likely to hire non-Caucasians.”
The EEOC has developed the following “best practices” for employers using tests:

  • Employers should administer tests and other selection procedures without regard to race, color, national origin, sex, religion, age (40 or older), or disability.
  • Employers should ensure that employment tests and other selection procedures are properly validated for the positions and purposes for which they are used. The test or selection procedure must be job-related and its results appropriate for the employer’s purpose. While a test vendor’s documentation supporting the validity of a test may be helpful, the employer is still responsible for ensuring that its tests are valid under UGESP.
  • If a selection procedure screens out a protected group, the employer should determine whether there is an equally effective alternative selection procedure that has less adverse impact and, if so, adopt the alternative procedure. For example, if the selection procedure is a test, the employer should determine whether another test would predict job performance but not disproportionately exclude the protected group.
  • To ensure that a test or selection procedure remains predictive of success in a job, employers should keep abreast of changes in job requirements and should update the test specifications or selection procedures accordingly.
  • Employers should ensure that tests and selection procedures are not adopted casually by managers who know little about these processes. A test or selection procedure can be an effective management tool, but no test or selection procedure should be implemented without an understanding of its effectiveness and limitations for the organization, its appropriateness for a specific job, and whether it can be appropriately administered and scored.

There are several things you can do to help guard against being caught in the same dilemma the above mentioned company was caught in. These include:

  • Make sure the tests you are using are directly related to the job you are trying to fill. You can do this by conducting a job analysis and keeping the relevant job descriptions up to date.
  • Have employees who are recognized good performers in the job take the tests to see how they perform and if indeed their results are related to their performance. (Reliability and validity are the key terms here.)
  • Once you have conducted the tests conducted an adverse impact analysis, that 80% rule, and see if you are having an adverse effect on protected individuals who are taking the test. If the answer is “yes” you need to take a long, hard look at the test. If you want to continue using it you had better have a very justifiable business reason for doing so.

BTW, an interview is a “test.” Can yours pass the “test’?
Employment Tests and Selection Procedures
Uniform Guidelines Code of Federal Regulations
Article by Tom Starner: Discrimination Ruling Puts Employers to the Test

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