1. What is Impact Ratio?

Impact Ratio is a key metric used in Equal Employment Opportunity (EEO) analysis to measure potential adverse impact in selection processes. It compares the selection rates of minority and majority groups to identify potential discrimination.

2. How Does the Calculator Work?

The calculator uses the Impact Ratio formula:

Where:

• Minority Selection Rate — Percentage of minority candidates selected (%)
• Majority Selection Rate — Percentage of majority candidates selected (%)
• Impact Ratio — Resulting ratio (unitless)

Explanation: The ratio helps identify if there is a significant difference in selection rates between different demographic groups, with values below 0.8 typically indicating potential adverse impact under the "four-fifths rule."

3. Importance of Impact Ratio Calculation

Details: Impact Ratio analysis is crucial for organizations to ensure fair hiring practices, comply with EEO regulations, identify potential discrimination, and promote diversity and inclusion in the workplace.

4. Using the Calculator

Tips: Enter both selection rates as percentages (0-100%). Minority Selection Rate must be ≥0, and Majority Selection Rate must be >0. The calculator will compute the ratio and display the result as a unitless value.

5. Frequently Asked Questions (FAQ)

Q1: What is the "four-fifths rule"?
A: The four-fifths rule (or 80% rule) is a guideline suggesting that an impact ratio below 0.8 may indicate adverse impact and potential discrimination in selection processes.

Q2: What constitutes a good impact ratio?
A: Generally, impact ratios of 0.8 or higher are considered acceptable, while ratios below 0.8 may warrant further investigation into potential adverse impact.

Q3: When should impact ratio analysis be conducted?
A: Organizations should conduct impact ratio analysis regularly for hiring, promotion, and other selection decisions to ensure compliance with EEO requirements and promote fair practices.

Q4: Are there limitations to impact ratio analysis?
A: Yes, impact ratio is a screening tool and doesn't prove discrimination. Small sample sizes, business necessity, and other factors must be considered in comprehensive analysis.

Q5: What actions should be taken if impact ratio is below 0.8?
A: Organizations should investigate the reasons, review selection criteria for job-relatedness, consider alternative selection methods, and document the analysis process.