Adverse Analysis

Adverse Impact Calculations: Sex

Adverse impact occurs when a decision, practice or policy has a disproportionately negative effect on a protected group even though the adverse impact may be unintentional.

EEOC’s Uniform Guidelines for Employee Selection Procedures:

“Adverse Impact: 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.”

Rule of thumb for “substantially different rate”: any group’s selection rate that is less than four-fifths (4/5ths) or 80% of the selection rate for the group with the highest selection rate.

“4/5ths” or “80%” is a rule of thumb is not intended as a legal definition. Rather it is a practical means of keeping the attention of the enforcement agencies on serious discrepancies in rates of hiring, promotion and other selection decisions. When adverse impact exists, an organization may be vulnerable to charges of discrimination.


· Read and reflect on what adverse impact means.

· Read and reflect on the terminations and promotions calculations below.

· Determine:

1. Is Adverse Impact indicated in these calculations? Why / why not?

2. What should the organization do to correct or prevent Adverse Impact?

An adverse impact analysis has been conducted and the following data was provided. Manager’s job: determine if adverse impact is indicated for both terminations and promotions (why or why not), and provide advice on what the organization should do to resolve any adverse impact indications. Total number of employees: 1,499 (Females: 953 Males: 546)

Termination report: 70 termed females, 23 termed males Promotions report: 73 promoted females, 42 promoted males

Termination: a negative employment action

If calculations for the minority group are greater than 80%, adverse impact is indicated.

Promotions: a positive employment action

If calculations for minority group are less than 80%, adverse impact is indicated.


Females: 70 / 953 = 7%

Males: 23 / 546 = 4%


Females: 73 / 953 = 8%

Males: 42 / 546 = 8%

Ratio calculation:

7% Females / 4% Males = 174%

Ratio calculation:

8% Females / 8% Males = 100%

Step 1a: Was Adverse Impact indicated for terminations and why? Step 1b: Was Adverse Impact indicated for promotions and why?
Step 2: What corrective action should your organization take for
The workforce: