WTO and Global Relation

EEOC

EEOC is Watching You: Recruitment Discrimination Comes to the Forefront

by  Dr. Michael Harris May 30, 2006

“Who ultimately receives employment opportunities is highly dependent on how and where the employer looks for candidates.” The above quote is found in the Equal Employment Opportunity Commission’s compliance manual on race and color discrimination, which was released on April 19, 2006. While there has been a great deal of attention lately to the Office of Federal Contract Compliance Programs and its new definition of an Internet applicant, the EEOC has provided a clear signal that recruitment practices and procedures will be scrutinized much more carefully in the future for possible discrimination. The remainder of this article summarizes some of the key points regarding recruitment and hiring that are covered in this compliance manual, followed by suggestions for employers and recruiters to reduce their chances of legal problems.

A Renewed Focus on Discrimination in Recruitment and Hiring Causes of Recruitment Discrimination

This compliance manual notes five recruitment practices that may be given particularly careful scrutiny by the EEOC:

Illegal use of job advertisements and recruitment agencies. The compliance manual notes that job advertisements that specify race, ethnicity, or other protected categories are illegal. Similarly, asking a recruiter to use race, ethnicity, and other protected categories (e.g., age) in the hiring process is illegal. Indeed, the compliance manual notes that if discrimination occurs in the recruitment process, both the employer and the employment agency may be liable. Recruiters, employment agencies, and employers should beware; recruitment and hiring can create legal liability for all parties, not just the employment agency or the employer. You may be responsible for the discriminatory acts performed by another party.

Word-of-mouth recruiting. Although many organizations make extensive use of word-of-mouth recruiting, the compliance manual notes that this technique “in a non-diverse workforce is a barrier to equal employment opportunity if it does not create applicant pools that reflect the diversity in the qualified labor MARKET.” Thus, caution is needed when over-relying on word-of-mouth recruiting to ensure that it is not creating barriers to hiring minorities.

Homogenous recruiting. The compliance manual notes that use of homogenous recruiting can be a cause of discrimination. The examples provided of homogenous recruiting include an instance where a largely white municipality that is situated next to a largely black municipality only hires its own residents and refuses to advertise in publications that circulate in the largely black municipality. You need to careful, therefore, in choosing applicant sources that do not result in the exclusion, or near exclusion, of protected groups.

Use of stereotyping in decision-making. In accord with current psychological theories, the compliance manual observes that racial bias is not always conscious, and that decisions infected by stereotyped thinking or other forms of less conscious bias may also be discriminatory. Organizations therefore need to be careful to avoid stereotyping when engaging in recruiting and hiring decisions, particularly since decision-makers may be unaware of their biases and stereotypes.

Discriminatory screening of applicants. Besides the obvious factor of using race (or, of course, other protected categories, such as gender) for screening applicants, the compliance manual notes that it is discriminatory to use a screening procedure that has “a significantly disparate racial impact” unless it can be shown to be “job related and consistent with business necessity.” The terms “disparate racial impact” and “job related and consistent with business necessity” are discussed next.

What is Disparate Racial Impact?

Disparate racial impact occurs when a screening device (e.g., educational requirement), or even a recruitment practice, produces a significant difference in the hiring of African-Americans (or other protected racial groups) compared to Caucasians. While a detailed discussion of how to test for disparate racial impact is beyond the scope of this article, suffice it to say that this may be demonstrated by comparing the percentages of African-Americans passing the test or getting hired versus the percentages of Caucasians passing the test or getting hired. Census data comparing the percentage of African-Americans in the workforce versus the percentage of African-Americans in the relevant labor MARKET may also be used to demonstrate disparate racial impact.

What is Job-Related and Consistent With Business Necessity?

There is no one single accepted definition of “job related and consistent with business necessity.” For some recruitment and hiring practices – such as an objective test – legal and professional standards have emphasized the use of an appropriate validation study. One approach to validation involves showing that test performance is sufficiently correlated with job performance (i.e., a criterion-related validation study). Another approach to validation involves documenting that the test (e.g., a typing test) is closely related to the work performed (e.g., typing documents) on the job (i.e., a content validation study). In other instances (e.g., use of safety equipment), a screening procedure that reflects a direct and obvious relationship to successful performance of the job in question may be sufficient to prove job relatedness.

Suggestions for Recruiters and Employers

Do you have standardized recruiting and hiring processes? While standardization of recruitment and hiring practices certainly helps diminish the chance of a lawsuit, it by no means guarantees freedom from lawsuits. Recall that disparities between racial or ethnic groups must be defended by proving job relatedness. Standardization of practices, including use of documented job requirements and qualifications, is not always enough to defend your organization in a disparate impact lawsuit, but it is a good start, as it will help in a disparate treatment lawsuit.

Do your recruiting and screening practices indicate possible disparities? While highly sophisticated statistical analyses are likely to be used if there is a lawsuit, you can obtain a rough estimate, using simple percentages, as to whether any of your recruiting and screening practices cause disparity between various protected groups. For example, do African-Americans seem to be more heavily screened out with any tests that you use? Is the percentage of racial and ethnic minorities in your workforce similar to the percentage in the geographic area from which you recruit? How about various minimum requirements that you include, such as conviction records? Do they tend to screen out minorities in a greater proportion than Caucasians?

Can you provide evidence that each of your recruiting and screening practices is job-related and consistent with business necessity? In addition to legal reasons, it makes logical sense that all of your recruiting and screening practices should be job-related. There should be documented evidence of job relatedness for any tests you use. To ensure that other practices are job-related, you may wish to consider how a jury would view them. It may also be helpful to have an external expert review your recruiting and screening procedures to determine how they compare with current “best practices” and recent research.

Are you casting a wide net in your recruiting sources? Recall above that EEOC is particularly concerned about word-of-mouth and homogenous recruiting practices. Where do you recruit from? Are you sure that you are casting as wide a net as possible? Or, are you focusing too heavily on recruitment sources that are almost exclusively used by Caucasian males? You may need to consider broadening your recruitment program to include sources that target minorities and women.

Are your recruiters and employment agencies familiar with discrimination laws? Do your recruiters understand the basic legal concepts discussed in the compliance manual? Are they knowledgeable as to what interview questions are illegal to ask? Have they had up-to-date training in these laws? Don’t wait to find out when it is too late; make sure that all of the recruiters you work with, whether they are external or internal to your organization, are knowledgeable and understand discrimination laws.

Summary New and changing legal standards and requirements demand attention to ensure that you lessen your legal exposure. As EEOC focuses more on recruitment and hiring discrimination than in the past, your policies and practices in this area may come under greater scrutiny. Now is the time to audit your practices and make sure that your recruiters and hiring managers understand and use legally acceptable employment practices. This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pend

Salary Survey

What is a Salary Survey?

Chapter Highlights

1. What are Salary Surveys?
2. Types of data gathered in a salary survey.
3. Where can I find salary surveys?
4. Choosing the right survey for you. What to look for in a survey.
5. Participating in a Survey.
6. Conducting in a Survey.

What are Salary Surveys?

Salary Surveys are tools used to determine the median or average compensation paid to employees in one or more jobs. Compensation data, collected from several employers, is analyzed to develop an understanding of the amount of compensation paid. Surveys may focus on one or more job titles, geographic regions, employer size, and or industries. Salary surveys may be conducted by employer associations (e.g., SHRM), survey vendors, or by individual employers. 
Survey data is often time sensitive and may become out-of-date quickly. Because of the time sensitive information, surveys are often identified by by the year or quarter in which the data was collected. 

The purpose of salary surveys provide a means for comparison of salaries at the company 

Several salary survey demos are available at: HR-Survey.

Surveys gather and summarize compensation information and provide a means for comparison of salaries at the company.

Types of data gathered in a salary survey

Salary Surveys are analyses of compensation data. This data may include quantifyable aspects of compensation such as:

1. Base salaries
2. Increase percentages or amounts
3. Merit Increases
4. Salary Ranges
5. Starting Salary
6. Incentives/Bonuses
7. Allowances and Benefits
8. Working Hours

Salary Surveys may also include non-quantifyable aspects of compensation such as:

1. Educational Requirements
2. Geographic Location
3. Source of Hire (Internal/External)
4. Working Conditions

Where can I find salary surveys?

List of on-line survey vendors available at HR-Guide.

Associations conduct surveys of their members including:

1. Society for Human Resource Management
2. College and University Personnel Association
3. ACA
4. NACUBO

Surveys are also available from various government departments including:

1. Bureau of Labor Statistics
2. Occupational Compensation Survey
3. State Occupational Employment and Wage Estimates

Choosing the right survey for you.
What to look for in a survey.

How do I choose a salary survey? The results of surveys conducted by third parties (e.g., associations, consultants, survey vendors) can be relatively inexpensive compared to the cost of developing the same results your self. Surveys conducted by associations and vendors are often have a large number of participants which results in a more accurate analysis. Before purchasing survey results, you should make sure the results contain:

• Appropriate Jobs
  Salary Surveys collect compensation data for one or more jobs (job titles). The jobs may vary depending on industry and or size of employer. For example, some surveys for printing companies may include titles such as: Press Operator, Binding Machine Operator, or Lithographic Press Operator. Job titles specific to the banking industry include: Teller, Cashier, Account Manager, or Investment Manager. Job titles should be have little overlap and should unique titles that describe the job. For example the following job titles: Secretary A, Secretary B, and Secretary C do not adquately describe the heirarchical relationship between the three job titles.
• Summary
  Salary Survey results should contain a summary of the data analysis. This summary is useful for understanding trends that are occurring the labor market.
• Methodology
  Is there a minimum number of responses needed before reporting results? Data should not be reported for too few incumbents. Need to report median salary as well as averages. The mean is the average of all numbers divided by the number of responses. The 'mean' can be affected by extreme values. The median is the midpoint with half of the responses are above that number and half fall below. Please note that in salary data, the median tends to be lower than the mean due to the fact that there is no upper limit to the rates that can be paid for a job. However, the lower limit is zero. Therefore, the distribution of salaries tends to be skewed with a few salaries at the extreme high end of the range. Fact: In salary data, the median will almost always be lower than the mean. Explanation.
• Tabulations
  At a minimum, survey results must be tabulated by Job Title. This means that the average or median salary should be reported separately for each job in the survey (assuming that there were sufficient numbers of participants to make the analysis meaningful). If the survey includes data from a large number of participants, the value of the survey results will be increased if the results can be tabulated by other employer demographics such as: funding type (public/private), industry, geographic region, size (number of employees or financial measure)

Use survey results that will match jobs at your organization within the same industry and/or geographic location.

Participating in a Survey

Have you been asked to participate in a Salary Survey? If so, you you need to do the following things:

1. Identify the response deadline.
   Often a salary survey will collect data during a specific time frame so that the results will be created and published on time. Responses that are submitted late may not be accepted by the survey vendor.
2. Match Jobs
   Matching jobs on the survey questionnaire to your institution - Job matching should be based on several factors:
   • Title - The easiest jobs to match on a survey questionnaire are those in your institution that have an identical job title. All companies have a ‘President’ and at least one Secretary. Most have a Director of Marketing, Director of Human Resources, Director of Information Systems, Director of Facilities.
   • Organizational Structure - The next easiest technique for matching jobs is to find jobs in your organizational structure that match the implied (or even displayed) stucture on the survey. Often a survey will examine the salary data for jobs at several levels within a career path. For example, the jobs Accountant, Senior Accountant, Director of Accounting, Chief Financial Officer may be included in the same survey questionnaire. The structure of two or more jobs within your institution may closely match the structure of jobs on the questionnaire.
   • Job Duties - The most time consuming technique for matching jobs is to match them on the basis of decriptions.
3. Determining what data is needed
   Salary Ranges
   Lists of employees by job title with salaries
4. Backup your Response
   Make a photocopy of the completed questionnaire before returning
5. 
   

Bargaining Ability of employee union

Bargaining ability of Employees union and Individual employees

Bargaining ability of Employees union means group of workers presenting their demands in front of the top management. It may be related to Salary, Working condition, Promotion, Transfer etc.,

Statutory requirements

Compensation has been protected by various government statutory acts.
Payment of wages act
Payment of minimum wages act
Payment of bonus act
Equal remuneration act

Ability to pay

Ability to pay means organisation capacity to pay the employees. The companies pay according to their capacity and capability. If the company pay more than the market then the company will be under loss. If the company pay less than the market then the employee wont stick to the organisation. That is the reason the company has to maintain balance for the payment.

Worth of the job

In Companies  where there is no pre planned compensation programme usually derive the compensation from the opinion of the senior workers who are familiar with the job.

Demand supply condition in job market

Demand and supply of the workers influence the wage and salary structure. If the demand for certain employment is high and the supply is low ultimately there will be rise in the salary structure. At the same time if the demand for certain employment is low and the supply is high ultimately there will be fall in the salary structure.