1 bryan baldwin state of washington department of personnel may 3, 2006 creating defensible...

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Bryan BaldwinState of Washington

Department of PersonnelMay 3, 2006

Creating DefensibleSelection Procedures

IPMA-HR Western Region Annual Training Conference

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Overview/Objectives

By the end of today, you will know:1. What hiring practices can be challenged.2. What you are defending against.3. What the relevant laws are.4. What is meant by “validity.”5. Why we should care about good selection.6. What you can do to help ensure defensibility.

Defensible Selection

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“Selection Procedure”

• Uniform Guidelines on Employee Selection Procedures:

• “Employment decisions include but are not limited to hiring, promotion, demotion, membership…referral, retention, and licensing and certification…Other selection decisions, such as selection for training or transfer, may also be considered employment decisions…”

• Connecticut v. Teal (1982)

• Professional guidance• APA Standards• SIOP Principles

• Bottom line: Anything that narrows the talent pool


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Why do we spend so much time on assessment?

• Increases productivity of workforce• Helps prevent errors from being made• Increases employee satisfaction and reduces

turnover• Better fit• Processes are more consistent and fair

• Improves organization’s reputation• More attractive as employer

• Helps ensure we treat people fairly


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“Many lawyers think of test validation studies as just a bunch of paperwork that benefits no one but the psychologists…The cost of test validation is normally insignificant compared to the benefits received, and these benefits continue for each year that the test is used—and beyond, to the extent that employees selected by the test remain on the job.”

- Seberhagen (1990)


It’s not just about defensibility

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What are we defending against?

1. Discrimination complaints Disparate treatment Disparate/adverse impact

2. Privacy violations

3. Improper medical tests

4. Negligent hiring/failure to perform due diligence

5. Violations of merit system rules

6. Violations of bargaining contracts


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“Defensible”

• Withstands scrutiny from:• Applicants/candidates• Peers• Union representatives• Regulatory agencies• Attorneys• Jury• Judge

• Something you could stand behind• Something you wouldn’t mind seeing in the paper


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The Laws

1. Title VII2. Section 1981/19833. ADEA4. ADA and Rehabilitation Act5. USERRA and VEVRAA6. FCRA7. Immigration Reform and Control Act8. Executive Order 112469. State and local laws10. Employment torts


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Regulatory Agencies

1. Equal Employment Opportunity Commission (EEOC)2. U.S. Department of Justice (DOJ)3. U.S. Department of Labor (DOL)

• OFCCP• VETS

4. Federal Trade Commission (FTC)5. U.S. Department of Homeland Security6. State agencies, for example:

• California Department of Fair Employment and Housing• Washington Human Rights Commission• Oregon Bureau of Labor & Industries

7. Local agencies


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“Internet Applicants”

• New OFCCP regulations• Cover certain federal contractors• Require collection of demographic information• Require tracking of database searches• Require qualifications to be job-related• Should be thoroughly reviewed by covered employers

• Pending EEOC regulations (UGESP Q&A)• Will the final version mirror OFCCP regulations?• Applies to more employers


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Disparate Treatment

• Inconsistent/unfair application of policy or procedure

• Employer must give a job-related, legal reason why they did what they did

• Plaintiffs and judge/jury will look for any situations where you treated “similarly situated” individuals differently

• Serious liability for organization and, in some cases, the individual


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Disparate/Adverse Impact

• Policy/practice applied same way to all groups but has the effect of discriminating against some

• Classic examples: diplomas, height

• Common measure: “4/5ths rule”

• Employer must show selection process was job-related and consistent with business necessity

• Court/jury will look for evidence of validity per the Uniform Guidelines


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Exceptions


• Bona Fide Occupational Qualification (BFOQ)• Religion, sex, national origin, or age only

• Must be “reasonably necessary to the operation of that particular business or enterprise”

• Bona Fide Seniority System (BFSS)

• Affirmative Action Diversity can be a compelling interest AA must be narrowly tailored to achieve goals Race/ethnicity can be considered a “plus” only Can take many forms

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Why do applicants complain?

• They perceive a violation of Title VII of the federal Civil Rights Act of 1964 as amended in 1991

• The exam didn’t pass the smell test (wasn’t “face valid”)

• They feel they weren’t treated fairly• They’ve heard other applicants felt the same• They like to complain


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Procedural Justice

Procedural justice – the fairness of the process used to select applicants/new hires (not the result)

Studies have linked procedural justice to: Recommending the employer to others Perceptions of fairness Applicants’ intention to take a job Organizational attractiveness Turnover intentions Filing complaints


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Applicant Perceptions

Instrument Favorability Rating

Interviews Higher

Work sample

Resumes

References

Cognitive ability

Personality tests

Biodata

Honesty tests Lower

Source: Hausknecht et al. (2004)


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What is “validity”?

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Sources of Validity

Uniform Guidelines: “The 3 C’s”: Relationship between scores and job performance

“Criterion-related validity” Test content matches job content

“Content validity” Test is measuring abstract concept (dependability)

“Construct validity”

Validity generalization


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“The closer the content and the context of the selection procedure are to work samples or work behaviors, the stronger is the basis for showing content validity. As the content of the selection procedure less resembles a work behavior…the less likely the selection procedure is to be content valid, and the greater the need for other evidence of validity.”

– Uniform Guidelines, 14(C)(4)

Validity Evidence


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So how often do these lawsuits happen, anyway?


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Charges in 2005 (thousands)

Source: EEOC

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16.6 15

0

10

20

30

40

50

60

70

Title VII ADEA ADA


2222Source: EEOC

2,340

8,035

14,893

16,585

23,094

26,740

0 10,000 20,000 30,000

Race/Color

Sex

Age

Disability

Nat. Orig.

Religion

2005 EEOC Charges Filed by Type


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Ehh..what’s the worst thing that could happen?


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1. Equitable relief• Hiring, reinstatement, back pay, legal fees, etc.• Adverse impact or disparate treatment

2. Legal relief• Compensatory damages, e.g., pain and suffering• Punitive damages: to punish the employer

• Available only against private sector employers• Available only in disparate treatment cases• May not be available for violating state laws (e.g., AZ)

3. Limits• Title VII, ADA, ADEA: see next slide• State laws vary (e.g., unlimited in CA civil case)• Section 1981 and 1983: unlimited

Potential Penalties


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# employeesMaximum compensatory & punitive

damages per complaining party

15 – 100 $ 50,000

101 – 200 $ 100,000

201 – 500 $ 200,000

> 500 $ 300,000

Title VII, ADA, and ADEA


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But validation is so expensive!

$$

$

$

$

$

$

Average cost of content validation: $5-20K

Median 2003 compensatory award in discrimination case:

$232K


Median settlement in discrimination case, ’96-’02:

$50-70K

Sources: Seberhagen (1990); Jury Verdict Research

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First…reality

• No selection system is perfect

• Someone can always complain


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How to Protect Yourself

1. Job analysis, job analysis, job analysis

“People will continue to measure the wrong things as long as they fail to define what they want to measure.”

- Guion (1998)


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Knowledge, Skills, and Abilities

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Ability to prepare clear, complete and concise reports.

X X X X X

Ability to apply accounting and auditing principles and procedures in the work performed.

X X X X X X X

Ability to analyze data and draw sound conclusions.

X X X X X X

KSA-Selection Method Matrix

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2. Use “good” exams

• Based on results of job analysis• Reliable• Valid• Structured• Free of obviously illegal questions• Weighted according to the job analysis• Bias for work sample/performance tests• Beware on-line tests—especially personality tests


3131Sources: Schmidt & Hunter (1998); Roth et al. (2005); Aamodt (1998); U.S. MSPB (2005)


0 100

Written tests

College GPA

References

Education level

Interviews

Work experience

What works?

Supervisors’ Opinion Validity

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Looking in the mirror

Source: Rynes et al. (2002)


Study of 959 HR professionals

Question Answer % Wrong

1. The most valid employment interviews are designed around each candidate’s unique background.

2. Although people use many different terms to describe personalities, there are really only four…as captured by the Myers-Briggs Type Indicator (MBTI).

5. Companies that screen job applicants for values have higher performance than those that screen for intelligence.

3. Being very intelligent is actually a disadvantage for performing well on a low-skilled job.

4. “Integrity tests” don’t work well in practice because so many people lie on them.

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Adverse Impact

Sources: Several, including Aamodt (2006), Roth et al. (2001), and Hough et al. (2001)


d-value

0 0.5 1 1.5 2

Integrity tests

Reference checks

Conscientiousness

Structured interview

Biodata

Situational jdgmt (video)

Job knowledge test

Work samples

Situational jdgmt (paper)

Cognitive ability

GPA

Reading comp

Muscular strength

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3. Focus in-depth validation on certain jobs first

4. Do not rely on one method of assessment—use a “whole person” approach

5. Minimize the reading level

6. Document, document, document


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Documenting the Selection Process

• Job analysis and critical behaviors/KSAs• Decision process for choice of selection methods• Selection method(s) development or purchase• Rating scales and benchmarks• Recruitment activities• Applicant responses (can summarize)• Reference/background check information• Final selection process

• Record retention period: Varies• Recommend three years


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7. Train and be trained• Hiring supervisors• Staff• Candidates

8. Be consistent & courteous with your applicants

9. Establish & follow clear policies & procedures

10. Establish an exam review procedure


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11. “Sell” your exam to applicants

12. Pre-test

13. Look at your SMEs

14. Do background and reference checks


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Background and Reference Checks

• Background checks are database checks• Reference checks are real-time interviews• Check personnel files when available• Obtain a release• Give yourself enough time


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Background Checks• Examples:

• Criminal background checks • Credit checks• Educational/employment verification• Driving record

• Be very wary of using arrest records to deny job• Analyze conviction records—no blanket policies• Tie denial of employment to nature of job• Follow requirements of the FCRA and other laws• May be required for certain jobs (check laws)• Not to be undertaken lightly


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Reference Checks

• Do them as part of your due diligence

• Ask job-related questions

• Ask follow up questions

• Use a standard form

• Consider assigning to specialists

• Document questions and answers

• Off-list checks


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15. Provide candidates enough time

16. Keep an eye on things – ongoing evaluation

17. Periodically audit your examination process

18. Set your pass points systematically


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Where do we set the pass point?

“…under [the Civil Rights Act] a discriminatory cutoff score on an entry level employment examination must be shown to measure the minimum qualifications necessary for successful performance on the job.”

- Lanning v. SEPTA (1999, 3rd Cir.)

“[cutoff scores should be] reasonable and consistent with normal expectations of performance.”

- Craig v. County of Los Angeles (1980, 9rd Cir.)

“[cutoff scores]…should normally be set as to be reasonable and consistent with normal expectations of acceptable proficiency within the work force.”

- Uniform Guidelines on Employee Selection Procedures (1978)


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19. Check immigration status• Must verify authorization to work in U.S.• Penalties for non-compliance can be steep• Estimates of unauthorized workers up to

30% in some industries (e.g., construction)

20. Consider applicant privacy and medical testing issues


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Privacy Violations• Polygraph tests

• Public entities often exempt from laws (esp. police)• Be very wary of relying on them

• Personality tests (e.g., Target, Staples cases)• Drug testing

• Generally supported if administered to all applicants• Tie to job responsibilities (e.g., operates vehicle)• Safer for applicants than current employees• May be required for some jobs (e.g., transportation)• Current use v. rehabilitated addicts & alcoholics

• Criminal/credit history• Follow requirements of the FCRA

• Be aware of state/local laws


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Improper Medical Tests

• Pre-employment questions• “Are you able to perform the essential functions of this

job, with or without reasonable accommodation?”

• EEOC definition of medical test

• Medical inquiries/tests must come after job offer

• Karraker v. Rent-A-Center (2005)

• Miller v. City of Springfield (1998)


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21. Use broad, inclusive recruitment strategies that target qualified applicants

22. Use standard applications, not resumes

23. Don’t ignore the Uniform Guidelines

24. Involve multiple stakeholders

25. When in doubt … seek help !!


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Electronic newsletters

–www.elinfonet.com

–www.ahipubs.com

–hr.cch.com

–www.blr.com

How can I keep up on all these

changes in the law?


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Resources/ReferencesLinksUniform Guidelines: www.uniformguidelines.comOFCCP: www.dol.gov/esa/ofccpEEOC: www.eeoc.gov

Recommended Reading1. Testing and assessment: An employer’s guide to good practices. Available at www.onetcenter.org/guides.html2. Gutman, A. (2000). EEO law and personnel practices.3. Brannick & Levine (2002). Job analysis.4. Guion, R.M. (1998). Assessment, measurement, and prediction for personnel decisions.5. Rosen, L. (2005). The safe hiring manual.

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