Time Magazine has a cover story this week entitled “How High Is Your XQ?” which describes the current interest among employers in the use of personality tests to make hiring, promotion and termination decisions. The answers to test questions are supposed to reveal personalty traits that are correlated with success on the job. You may hear the area referred to as “people analytics.” The providers of such testing include Hogan Assessment, Caliper, Prophecy Healthcare, Pegged Software, Gallup’s StrengthFinder, and Infor.
Testing raises legal issues that employers need to be aware of before they put people analytics into practice:
Reasonable accommodation: The disability laws require employers to provide reasonable accommodations during the hiring process, to make sure that applicants are not screened out because of an inability to perform tasks that are not essential functions of the job. The EEOC’s guidance on “Job Applicants and the Americans with Disabilities Act” gives this example: “An employer gives a written test to learn about an applicant’s knowledge of marketing trends. Maria is blind and requests that the test be given to her in braille. An individual’s knowledge of marketing trends is critical to this job, but the employer can test Maria’s knowledge by giving her the test in braille. Alternatively, the employer could explore other testing formats with Maria to determine if they would be effective, for example, providing a reader or a computer version of the test.”
Disparate impact: Testing may exclude people with certain protected characteristics, This is referred to as disparate impact. For example, in Griggs v. Duke Power Co., 401 U.S. 424 (1971) (the Supreme Court’s seminal case on disparate impact), the employer’s requirement that applicants have a high school diploma and submit to an intelligence test excluded a disproportionate number off African American applicants from consideration. Where a disparate impact on those with a protected characteristic is shown, the employer must that the testing is job-related and consistent with business necessity. Even if the employer can make that showing, the testing may still be unlawful if the employees can show that there is a less discriminatory alternative. The process for determining whether a test is job-related and consistent with business necessity is called validation. A group of federal agencies (including the EEOC) has developed Uniform Guidelines on Employee Selection Procedures for use in making sure that testing has sufficient validity to survive scrutiny under the discrimination laws. For a discussion of applying the guidelines to Prophecy, see Legal Defensibility of the Prophecy Assessment, from Biddle Consulting (one of the partners in the development of Prophecy). For further information, see also the EEOC’s fact sheet on “Employment Tests and Selection Procedures.”