Department of Labor Relies on SIOP Members for Adverse Impact Guidance

By Barbara Ruland

The book, Adverse Impact Analysis: Understanding Data, Statistics, and Risk, edited by SIOP Fellows Scott Morris and Eric Dunleavy, has been cited as a resource on practical significance in EEO Analysis by the US Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP).  The citation is specifically for the chapter written by Fred Oswald, Eric Dunleavy, and Amy Shaw.

As part of its FAQ on the topic, the OFCCP defines practical significance as “whether an observed disparity in employment opportunities or outcomes reflects meaningful harm to the disfavored group,” and acknowledges that practical significance, not just statistical significance, should be considered in compliance reviews. This distinction is important because, as the OFCCP notes, “a virtually unnoticeable disparity in, for instance, selection rates, may nevertheless be statistically significant due to the size of the data set.”

Because every personnel decision an organization makes exposes it to the risk of creating an adverse impact, this is a vitally important topic.  Adverse Impact Analysis provides advanced information on the subject, helping readers develop a sophisticated understanding of the data, statistical models, and legal frameworks for analyzing employment disparities.

Adverse Impact Analysis is intended primarily for practitioners who analyze employment disparities in the context of EEO litigation and compliance. The book is a valuable resource for students, researchers, and practitioners in I-O psychology, human resource management, labor economics, and EEO law.

“The EEO compliance landscape is constantly evolving,” Morris said. “One area that organizations should be watching now is pay equity. New EEO-1 reporting regulations require employers to report data on compensation disparities for broad occupational classifications. “

Dunleavy added, “This particular area is complex, and analysts should stay up to date on changing laws, analytic approaches, and recent case law. Our book includes multiple chapters on this topic, and I-O psychologists may have a particularly relevant skillset related to this area.

He cited AI-enhanced selection tools as another area of great interest, saying new technologies can be evaluated for adverse impact “just like traditional selection tools.” Dunleavy believes most of the issues covered in the book generalize to those situations, although the technologies may add some unique aspects to consider.

Morris and Dunleavy have collaborated on presentations about adverse impact analysis at the annual SIOP conference for several years, and they always have large audiences for their talks. Over time, they realized that the same issues came up repeatedly.

Many of those issues arose, according to Dunleavy, because the world of work had changed since relevant federal regulations and widely used reference texts had been published.  Morris said, “The topic of practical significance is a great example of an area where scientific thinking and legal/compliance practice were out of sync.”  

“It became clear,” he continued, “That a resource was needed to unify the diverse perspectives on the topic—that is what we hoped to accomplish with this book.“ Dunleavy added, “We realized that there was a need for something more contemporary and that our combination of scientific knowledge, real world consulting experience, and networks made for a potentially unique recipe for a book.

Scott B. Morris, PhD, is a professor of industrial/organizational psychology at Illinois Institute of Technology and currently chairs the SIOP Awards Subcommittee on the Zedeck-Jacobs Adverse Impact Reduction Research Grant. He works primarily on applied data analysis issues in personnel selection, including adverse impact analysis, test bias analysis, and test validation.

Eric M. Dunleavy, PhD, is the director of the Personnel Selection and Litigation Support Services department at DCI Consulting Group and an adjunct faculty member of George Mason University and University of Maryland Baltimore County at Shady Grove. He was coauthor of the “On the Legal Front” column in SIOP’s member magazine, The Industrial-Organizational Psychologist, for 7 years, and his primary areas of expertise are in employee selection, validation research, adverse impact analyses, and other EEO analytics.

Morris said their goal in creating the book was to bring together a group of diverse experts on the topic, “integrating perspectives from industrial-organizational psychology, human resource management, labor economics, and law.”

Including Fred Oswald and Amy Shaw, a dozen distinguished SIOP members contributed to the book. Other SIOPers involved were David Cohen, Kevin Murphy, Rick Jacobs, Dennis Doverspike, Catalina Flores, Kayo Sady, Michael Aamodt, Kathleen K. Lundquist, Toni S. Locklear, and Richard Tonowski.  

“A number of labor economists wrote chapters on key topics such as analyzing promotions and terminations,” Dunleavy said. “In addition, we had some very well-known attorneys involved. For example, Cyrus Mehri and Michael Lieder, two well-known plaintiff attorneys, wrote a chapter from their perspective, and David Ross and Gina Merrill, two well-known defense attorneys, wrote a chapter from their perspective. Reading these two chapters back to back to see where there is agreement and disagreement is a fascinating exercise.”

Adverse Impact Analysis provides guidance on common practical challenges when evaluating group disparities in employee selection, promotion, compensation and termination decisions. “Although most I-O psychologist are familiar with basic adverse impact analysis, few appreciate nuances involved in dealing with complex and messy data in HR information systems, or with the sophisticated data modeling techniques frequently applied labor economists,” Morris said. Therefore, the book also addresses data collection, and basic and advanced statistical analyses.

The two editors contributed a chapter based on work they did on a SIOP task force on Contemporary Selection Practice Recommendations. “As part of the committee’s work,” Morris said, “We wrote a white paper on data aggregation in adverse impact analysis, which was presented to EEOC leadership in 2016.” That work also established a dialogue with the EEOC. “With the new OFCCP guidance,” he concluded, “It is encouraging to see the compliance reviews coming in line with contemporary scientific thinking.”

Find Adverse Impact Analysis: Understanding Data, Statistics, and Risk here.

Contact the Editors

Email  Scott Morris

Email Eric Dunleavy or call him at 202-280-2175