This is “Cases and Problems”, section 5.6 from the book Beginning Management of Human Resources (v. 1.0).
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The Four-Fifths Rule
The four-fifths rule is a way of measuring adverse impact in selection processes of organizations. It works like this: assume your organization requires a cognitive test for employment. You set a test score of 70 as the required pass rate for the candidate to be considered for an interview. Based on our numbers, if 50 percent of men passed this test with a score of 70, then four-fifths or 40 percent of women should also be able to pass the test. You might calculate it like this:
|Gender||Total who scored 70 or above||Total who took the test||Percent|
|Male||52||62||83.8 or 84% passed|
|Female||36||58||62.07 or 62%|
If you divide the total of who scored above 70 by the total number who took the test, it shows the percentage of 84 percent passed the test. If you divide the number of women who passed by the total number of women who took the test, you come up with 62 percent. Then divide 62 percent by 84 percent (62/84 = 73.8%). The resulting 74 percent means that it is below the 80 percent or the four-fifths rule, and this test could be considered to have disparate impact.52/62 = 84% of men who took the test passed the test 36/58 = 62% of women who took the test passed the test 62/84 = 73.8%, less than 80%, which could show disparate impact
This is only an indicator as to how the selection process works for the organization, and other factors, such as sample size, can impact the reliability of this test. Using the tables below, please calculate possible disparate impact and then answer the questions that follow.
|National Origin||Passing Test Score||Total Number Taking the Test||Percent|
|Age||Passing Test Score||Total Number Taking the Test||Percent|
|People under 40||28||52|
|People over 40||23||61|
|Gender||Passing Test Score||Total Number Taking the Test||Percent|
Please calculate the above numbers using the four-fifths rule. Based on your calculation: