Minimalize Your Legal Risks While Targeting Your Best Hires


Article by Greg Barnett, PhD – Vice President of Research and Development, PI Worldwide

Target recently agreed to settle an EEOC complaint that cost them a whopping 2.8 million dollars. Whenever a large company like Target is involved in a lawsuit of this nature, it is worth taking notice and understanding what went wrong.

The EEOC complaint focused specifically on the company’s hiring for non-exempt, upper-level professional roles. The investigation found sufficient evidence that three of Target’s pre-employment assessments disproportionately screened out applicants based on race and gender. One of the tests also violated the Americans with Disabilities Act as it was deemed to be a form of pre-employment medical exam (with some reports suggesting that it was an assessment interpreted by psychologists).

While Target claims no intentional wrongdoing, the primary fault was found in the company’s use of assessments that weren’t accurately measuring characteristics that were clear necessities for performing the job or failing to document how the assessment tools were measuring job required skills, abilities, etc.

While no company wants to intentionally discriminate against others, they do want to hire the very best talent for the roles they’re looking to fill. The EEOC is clear that companies can use assessment tools that can lead to unfair outcomes if (and only if) they measure characteristics of potential employees that are required to perform the job.

When using assessment tools that may lead to unfair selection ratios, companies must show job relevancy in order for the tools’ use to be valid. For example, many manufacturing positions are filled after candidates are screened using a physical strength assessment. While some physical strength tests will lead to a disproportionate number of women being eliminated from the candidate pool, the assessment is legal to use if the requirements – like regularly lifting 150 pounds on an ongoing basis – are relevant to the role.

This means that it is especially important to identify the requirements for a job before you implement any selection process. Use a good job analysis process to identify what is required for success in a job role before using selection tools. Many companies offer easy to use job analytic technology that is geared for their own assessment tool or tools. At PI, we strongly recommend that every client use our PRO (Performance Requirement Options) behavioral job analysis tool before ever using the Predictive Index for hiring. The PRO asks subject matter experts (people who know the job well) to identify the key behaviors required for success in a job role, taking into account not just the responsibilities of the job, but also the work environment and culture. Formally, the output provides a clear outline about what is needed for success in the job so that selection decisions are based on behavioral requirements. Informally, the PRO process has a big benefit for our clients because it provides an opportunity to have a discussion about the role and the behaviors that are best suited for success. These discussions can be valuable because they both align various internal stakeholders, but also help build much better clarity around what a person is expected to do in a job. Using job analysis may take a little extra time but it is time well spent when considering the benefits of hiring better talent and the costs of not getting it right.

It is important to carefully monitor the performance of all assessment tools to ensure that they aren’t leading to adverse impact (i.e. unfairness) against a protected group. Target probably should have more carefully tracked their entire hiring process to identify what percentage of different protected classes were remaining in the candidate pool as they were going through various stages of the assessment process. Had they been actively monitoring this, they probably would have noticed the exclusions and been able to make earlier course corrections either to the tools they were using or the criteria they were basing their decisions on.

While looking at assessments, there is often an important balance between risk and fairness. While personality and behavioral tools tend to be fair to all people who take it (e.g., there are no differences on gender, age, or ethnicity), tools like cognitive ability tests can do a better job of identifying top talent. Instead of shying away from higher risk assessments, the best approach is to first understand what is required for success on the job (e.g. job analysis) and then build a balanced selection system which maximizes validity and minimizes risk.

Take-aways:

  • Always conduct a job analysis that helps identify what is required for the job
  • Use that analysis as an initial basis for making choices about the selection tools you are using
  • Monitor your candidate pool and pass rates to make sure protected groups are not receiving unfair treatment
  • Consider identifying a selection strategy that balances traditionally fair assessments with higher risks tools
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