Adverse Impact

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Statistical Calculations

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Adverse Impact Analysis by Favored Group

balanceAAP will flag statistical results on Adverse Impact reports, when they meet the parameters below.

Positive Employment Action (Applicants, Promotions)

The favored class is the one with the highest selection rate. Statistical evidence exists for adverse impact if the selection rate of the non-favored class is less than 80 percent of the favored class.

Example:
Applicant Pool for Job Group = 100 Males and 68 Females
Number of Females Selected: 10 / 68 = 14.7 (15%)
Number of Males Selected: 6 / 100 = 6.0 (6%)
Favored Group = Females
0.06 / 0.15 = 0.4 (40%)

There is statistical evidence that Adverse Impact exists.

Negative Employment Action (Terminations, Involuntary Promotions)

The favored class is the one with the lowest selection rate. Statistical evidence exists for adverse impact if the selection rate of the favored class is greater than 80 percent of the non-favored class.

Example:
Termination Pool for Job Group = 168 Whites and 39 Minorities
Number of Minorities Selected: 2 / 39 = 0.05 (5%)
Number of Whites Selected: 10 / 168 = 0.06 (6%)
Favored Group = Minorities
0.05 / 0.06 = 0.83 (83%)

The statistical evidence does not show Adverse Impact exists.

Note: aapbalanceAAP relies on Standard Deviation or Fisher’s Exact test to determine if the above results are statistically significant, depending on sample size. Results will be flagged if they are statistically significant.