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Adverse Impact Analysis

Adverse impact analyses compare the pass rates of various subgroups on a selection procedure to determine if one group fails at a disproportionate rate. The Uniform Guidelines on Employee Selection Procedures require employers to examine the adverse impact of any selection procedure.

Multiple methods of calculating adverse impact exist. A common "rule of thumb" method is the "four-fifths" rule. When the pass rate for one group is less than 80% of another group, adverse impact is said to exist. Other statistical methods for calculating adverse impact include z tests and Fisher’s Exact Probability test.

It is important to note that adverse impact is not illegal; rather it is only a requirement that validity information should be available.