Tanglewood Case 5: Disparate Impact Analysis

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Tanglewood Case 5: Disparate Impact Analysis

Recruitment and Selection
HRM 450

Current Needs Assessment
Tanglewood prides itself on encouragement of diversity in the workplace. All hiring and promotion decisions should be made on the basis of character and quality of work. The ensuing lawsuit brings about a need to analyze Tanglewood’s selection strategies to ensure these practices are not hindering the promotion of diversity. In order to do this, it is necessary to study the flow and concentration statistics of the organization. Flow statistics are calculated by comparing the number of people hired and promoted in the organization with the total number of people that apply. These statistics are then divided into different groups (i.e. race, gender). The selection rates of the different groups are compared to determine if there is a significant difference in selection between the groups. An example of this would be to look at the number of total white applicants and the percentage of those applicants that were hired. Then, look at the total number of African American applicants and the percentage of those applicants that were hired. These two percentages must then be compared. A useful comparison of these percentages would require that the number of African Americans selected equal 80% or the number of white employees hired. This is known as the four-fifth’s rule.

The Uniform Guidelines on Employee Selection Procedures (UGESP) requires that all organizations keep records that will allow for calculation and comparison of these statistics. The UGESP also requires that the four-fifth’s rule be calculated in all organizations. If is it shown that “a selection rate for any…group is less than four-fifths (4/5) (or eighty percent) of the rate of for the group with the highest rate” then this will usually be considered to be evidence of adverse impact. Adverse (or disparate) impact occurs when staffing practices have potential discriminatory impact on individuals because of sex, race, religion, disability, national origin or age. Although the four-fifths rule is really only a guideline, any digression from this rule should be thoroughly examined. It is also important to note that although the discrimination is not intentional, it may be occurring all the same and could possibly be deemed illegal.

Along with the flow statistics of the selection processes in the organization, it is necessary to examine the concentration statistics among different groups in Tanglewood. Concentration statistics inspect the total number of individuals employed in a certain position as compared to the number of individuals from different race groups employed in a certain position. For example, it is useful to look at the percentage of white employees employed in the position of Store Manager compared to the total number of Store Managers. Then, look at the percentage of African Americans employed in the Store Manager position compared to the total number of Store Managers. Also, it is useful to examine the percentage of African American employees employed in upper management positions as compared to the percentage of African Americans employed in the lower positions such as Store Associate. Although there are no specific legal guidelines for the analysis of concentration statistics, it is important to explore them as a means of determining any possible unintentional discrimination in selection practices. Current Organizational Statistics

After careful examination of the Tanglewood’s flow statistics, there is evidence this organization may be involved in selection practices that have disparate impact on some minority groups. The following selection statistics are provided to show instances of violation of the four-fifths rule.

Store AssociatesTotal WhiteTotal Non-WhiteAfrican-American Selection Ratio23.00%22.79%24.00%24.00%

Shift LeaderTotalWhiteTotal Non-WhiteAfrican-America
External15.88%16.31%13.88%5.88%...
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