Emotional Intelligence and Employment Practices Liability Part II: The Legality
and Effectiveness of Employee Assessment Tools
By Donald A. Phin, Esq., Employment Practices Liability Consultant Newsletter
Please see Part I of this discussion,
which took a look at "The Nature and Importance of Emotional Intelligence."
The military first used character assessment tools, designed to evaluate what we
now call emotional quotient, as far back as World War I. Private employers adopted
these tests after World War II and used them at an increasing rate until threats
of lawsuits and agency regulation scared them away. In a series of public-sector
cases, some tests were found to have had a disproportionate or disparate impact
on protected classes of persons. More recently, employees have made claims alleging
the tests also violate their right to privacy under state and federal legal theories.
(We will discuss the legal issues associated with testing later in this article.)
Despite such claims, I have found a half-dozen of these assessments to be accurate
in their ability to identify my core character traits. Moreover, the assessments
have afforded me valuable insight for personal and professional improvement. Indeed,
there are a number of effective tools on the market that should be used every time
a company makes a hiring or promotional decision. Such tools should also be used
to further develop effective communication and understanding between employees and
management.
"We hire for attitude and train for skills." —R. Rajagopalan, manager at Ford plant
in India
Since we are pursuing a risk management/legal analysis of employee testing issues,
the appropriate starting point in the legal analysis begins with guidelines the
Equal Employment Opportunity Commission (EEOC) promulgated in 1973. These guidelines
are summarized in Figure 1.
Figure 1
Summary of Uniform Guidelines in Employee Selection Procedures (1978)
CFR Title 29, Volume 4 Section 1607, et seq.
The CFR guidelines apply to tests and other selection procedures which are used
as a basis for any employment decision, including hiring, promotion, demotion, membership,
referral, retention, licensing, certification, training or transfer. 1607.2(b).
The guidelines are not intended, nor should they be interpreted, to discourage use
of a selection procedure so long as it has been validated in accordance with the
guidelines for each purpose for which it is used. 1607.2 (c)
If the use of any selection procedure has an adverse impact on the hiring, promotion,
or other employment opportunities of members of any race, sex or ethnic group it
will be considered discriminatory and inconsistent with the guidelines unless properly
validated. 1607.3 (a)
An adverse impact is determined by the 4/5ths rule. A selection
rate for any race, sex, or ethnic group that is less than 4/5ths of the
rate for the group with the highest rate will generally be regarded as evidence
of adverse impact. 1607.4 (d)
When developing assessment tools, employers may rely on construct validity studies.
Evidence of the validity of a test or other selection procedures through a construct
validity study should consist of data showing that the procedure actually measures
the degree to which candidates have identifiable characteristics
which have been determined to be important in successful
performance in the job [emphasis added] for which the candidates are
being evaluated. (For example, the ability to type well is important for a secretary.)
1607.5 (b)
The guidelines recognize that in 1973 construct validation was a relatively new
field. That is no longer true. Today, construct validity is the standard by which
most current assessment tools are validated. The guidelines suggest that when evaluating
construct validity, the following occur.
1. There should be a job analysis identifying critical work behaviors and the constructs
behind them. For example, if the willingness to open a dialogue is an important
work behavior of a salesperson, candidates may be most successful if they have an
outgoing or extrovert personality type.
2. A selection procedure should be identified that measures the construct.
3. The guidelines then suggest that the relationship between the construct, selection
procedure, and work behaviors be supported by one or more criterion-related studies.
Based upon the summary of the EEOC guidelines in Figure 1, the following points
become clear.
- To anyone but an expert, these definitions are confusing at best.
- The EEOC
does not prohibit the use of psychological testing.
- Assessment tools are only
prohibited where they have a disparate impact on a protected class.
- Even if
a particular assessment does have a disparate impact, the employer is not liable
under Title VII if the employer can show that the tool accurately predicts successful
job performance. This is what construct validation is all about.
Summary of Case Law Involving Employee Assessment
The legal issues surrounding the use of personality assessment tools can be boiled
down to two subject areas: (1) disparate impact claims under Title VII of the Civil
Rights Act (and similarly related statutes) and (2) invasion of the right to privacy
claims.
I will summarize the core issues in these two areas. Since this is not a legal brief,
I will not supply you with a litany of case citations. Web sites are provided later
in this article to help you obtain such information.
Title VII Claims
As the EEOC guidelines pointed out, any test may be used, provided it does not create
an "adverse impact" on a protected class. In fact, when objective assessment/testing
tools are properly used to make hiring or promotional decisions, statistics indicate
that these tools actually reduced exposure to "adverse impact" claims.
The good news for small employers is that there have been few lawsuits filed against
them alleging adverse impact. Most likely, this is because plaintiffs attorneys
find it inefficient to litigate such claims. Proving disparate impact cases requires
a large number of similarly situated employees to obtain statistical significance.
Assuming a test does have an adverse impact, the burden is on the employer to show
that the test actually predicts successful job performance through validation and
reliability studies. Having done so, it then becomes the burden of the employee
to show that despite its apparent validity, the test was used as a "pretext" in
the hiring decision. The majority of cases researched in this area either attacked
the test as being inappropriate under the circumstances (i.e., not structured to
help in the hiring process) or discriminatorily administered. (It is important to
note that it is as much the implementation of an assessment tool as the tool itself
that determines its validity. For example, if a company only uses an assessment
tool with one particular group, then its administration could be considered discriminatory.)
The courts have also appeared to grant greater leniency where the job in question
is highly stressful or involves public safety (e.g., firefighters, police, executives).
Invasion of Privacy Issues
"I believe my sins are unpardonable."—Statement
used by Dayton Hudson in a hiring assessment
The most well known case in this area is Soroka v Dayton
Hudson Corp., 235 Cal F App 3rd 654 (1991), in which a California Appellate
Court found that the compelling interest test
determines whether a psychological test violates an applicant's right to privacy.
In this case, Target department stores were using a blend of tests to help in hiring
security officers. Among other areas, the tests contained questions concerning the
applicants' sexual, religious, and moral preferences. Because Dayton Hudson was
unable to show that the tests directly measured the characteristics of a qualified
security officer, the court determined that these intrusions invaded the applicants'
privacy.
A number of privacy cases decided across the country over the last several years
have made it very clear that the "expectation of privacy" is at its lowest during
the application stage. Conversely, courts appear to place a higher burden on employers
who use assessment tools when making promotional or downsizing decisions. It also
appears that the manner in which a test is presented and how its results are communicated
go a long way in creating the perception of whether it was fair or invaded a person's
privacy.
Figure 2 provides a summary of effective guidelines for using character assessment
tools in the hiring or promotional processes, based on case law and EEOC guidelines.
Figure 2
A Checklist for Using Character Assessment Tools
- Conduct a job analysis and profile critical factors for success.
- Make sure
that any assessment used is both reliable (consistent
in its application, meaning that an applicant taking the test on multiple occasions
receives similar scores or results) and valid
(it accurately assesses the requisite skills for the trade or job in question),
before the test is used. Ask that any assessment provider furnish you with these
studies.
- Verify that the assessment is designed for the specific process being
undertaken (i.e., hiring, team facilitation, promotion).
- Obtain permission for
use of the assessment from the applicant.
- Be consistent in using the assessment
(i.e., use it for all job applicants and promotional
decisions in a specific job class)
- Don't use the assessment as a gatekeeper.
Rather, it should be only one of several factors
for making employment-related decisions.
- Make sure the assessment focuses on
major aspects of the job. Preferably the assessment correlates with any applicable
job descriptions.
- Maintain the confidentiality of assessment results.
-
Avoid asking about sex, religion, politics, and social beliefs.
- Consider outsourcing
the assessment function to a third-party testing firm whose credentials you have
checked.
An extensive review of the claims alleging discrimination or invasion of privacy
reveals a minimal risk to employers. In fact, proper use of these tests actually
reduces an employer's exposure because it moves beyond the interviewer's subjective
analysis to a more objective standard. For example, while an interviewer may have
some prejudgments and perhaps discriminatory notions about what makes a good salesperson,
use of the proper assessment tools will enable the interviewer and the organization
to move beyond these potentially destructive beliefs.
Costs versus Benefit Analysis of Testing
"Unmet emotional needs cause the majority of problems at work." —EQI.org
As with any risk management analysis, a company must weigh the costs versus the
benefits when conducting an employee assessment. The cost of an assessment tool
includes administration time and any fee paid for using the tool (anywhere from
$25 to $200 per use). Should someone file a lawsuit or make a claim with an administrative
agency resulting from the use of such a tool, defense costs must also be considered.
As already discussed, however, a very small number of claims have actually been
filed against companies using assessment tools. My review unearthed less than a
dozen such claims filed against private employers.
On the flip side of the equation are the myriad benefits that can be derived from
using employee assessments. These benefits include not only the potential for greater
productivity, but also the avoidance of conflict and job failure, which may turn
into a lawsuit or agency claim. In addition, because validated tests do not discriminate
according to age, sex, and race, using tests can reduce an interviewer's subjective
biases, ultimately making the selection process fairer for all candidates.
Some Emotional Intelligence/Employee Assessment Links
There is a wealth of useful material addressing the topic of employee testing and
emotional intelligence available on the Internet. Figure 3 lists a number of useful
web sites that provide background material concerning employee assessment tools
and several actual tests that can be taken on-line.
Employment Liability Profiles: Victims and Victimizers
While I have seen a number of psychological workups, I am aware of no published
studies (which is not to say that there aren't any) providing the emotional profiles
of either the victim or the accused in today's employment practices liability cases.
To date, little or none of the empirical inquiry has focused on the interrelationship
between emotional quotient and susceptibility to employment liability risk claims.
It is therefore necessary to design studies with those issues in mind. Cooperation
between the corporate, legal, and insurance communities could go a long way toward
facilitating this research.
To achieve that end, the following are the kinds of questions to be asked when things
go wrong at the emotional level.
- How was that secretary feeling when she didn't use the company's sexual harassment
complaint procedure?
- Why was the executive willing to jeopardize his job and
career in exchange for a fling at the office that could only end in disaster?
-
Why do we hold beliefs that someone who is different from us cannot be as competent
as we are?
- How could someone possibly get so angry that they would be willing
to injure a coworker?
Researchers have asked similar questions when it comes to criminal activity for
hundreds of years. (What is in the mind of the mass murderer? Why do illegal drugs
have such a hold on people?) But we seldom ask these questions about behavioral
issues as they pertain to the workplace. Perhaps if testing procedures were able
to collect emotional competency profiles of the plaintiffs and defendants in employment
practices liability cases, we would have a better understanding of why these claims
surface in the first place.
Over the past 2 years I have seen a great deal of literature indicating that claims
exposure in the employment practices area is related to the culture of the organization.
This is a realization that has been long in the making. When you think about it
corporate culture is the collective EQ or "character" of an organization. I submit
that a company's employment practices litigation profile has infinitely more to
do with its collective emotional intelligence level than does its level of technical
compliance. For example, a number of my clients display an enviable degree of cultural
synergy and corporate cohesiveness, yet poor adherence to compliance standards.
However, none has ever been involved in even a single employment-related lawsuit.
In sharp contrast is the fact that I have never represented a corporate client in
a sexual harassment case that did not have a
highly detailed, well-documented sexual harassment policy.
Conclusion
So, what can we learn from Daniel Goleman (see Figure 3) and the work of others
in this field of employee assessment? First, we are certainly going to learn a number
of new technical terms. Somebody doesn't just have a "good personality." Now, they
score high on 8 out of 12 "relevant emotional competencies." Top salespeople don't
merely know how to communicate with the customer; they possess a set of measurable
skills including high empathy and tolerance. The risk is that such terminology causes
more confusion than it provides clarity. As an example, whenever I argue a matter
before a jury, I stick to the "rule of three." If I can't convince a jury with my
three best arguments, then I should have settled the case before it even reached
a jury.
Figure 3
Emotional Intelligence/Employee Assessment Web Sites
- www.ZERORISKHR.com.
A state-of-the-art assessment tool designed to assist recruiters, managers, and
human resource personnel in the interviewing process and, ultimately, in making
effective hiring choices. The product is offered by International Risk Management
Institute, Inc., and is supported by more than 20 years of validation studies.
-
www.testpublishers.org.
Frequently asked questions regarding the use of testing tools.
- www.aele.org. The best collection of testing cases
on the web. Focuses on public safety agencies but still of great value.
- www.eiconsortium.org.
The Consortium for Research in Emotional Intelligence in Organizations was founded
by Daniel Goleman and his associates. There are a number of excellent articles available
at this site including "The Business Case for EI," prepared by Cary Cherniss PhD.
-
www.eqi.org. This site
contains a very frank approach to the subject of emotional intelligence. Of interest
are the criticisms of Goleman's work.
-
www.queendom.com. This is a fascinating site that offers a number of free EQ
tests and other assessments. It contains a 70-page quiz that provides an EQ analysis.
-
www.ihhp.com. This
site, provided by the Institute for Health and Human Potential, provides a free
12-question EQ test, along with a personalized analysis of the results. The Institute
offers more in-depth assessments, along with additional study and training materials.
-
www.equniversity.com.
A similar site also providing a brief EQ assessment and evaluation
The question then becomes, "What are you doing about EQ in your organization?" As
the saying goes, "What comes to you comes from you." If you really care about being
good at what you do, you must first focus on your own emotional competencies. Begin
by taking several of the assessments noted in
Figure 3. If you seek to go further, have yourself analyzed by up to five
different sources. The cost is but a drop in the bucket—compared to the impact such
assessments could have on you and your relationships.
In addition, ask other people to assess your emotional intelligence. What can they
see about you that you can't see for yourself? Don't be afraid to find this out.
The key question is, "What are you going to do about it? Once you have undergone
a thorough self-analysis and improved your own competencies, you can then challenge
the people around you to do likewise. You will have to lead by example. If you can't
get support for this effort on a companywide basis, pursue it on your own. Then,
go to work on the organization, your law firm, or your insurance company.
In writing this article I anticipated raising many more issues than I could resolve.
That said, let me offer four specific steps you can take.
- Identify the emotional competencies of key stakeholders in the risk management/employment
liability equation, including the employees (at all levels), the risk manager, the
human resources department, corporate attorneys, and compliance officers.
- Analyze
the emotional quotient of both the victims and the accused in employment liability
cases. Much of this input will by nature have to come from former coworkers. This
is necessitated by the fact that both the victim and the victimizer will generally
no longer be with the company. In reality, coworker input may actually be more accurate
given the limitations of the litigants' self-awareness.
- Once your research has
been completed, identify the 80/20 of critical emotional competencies (i.e., the
20 percent of competencies that, when they appear to be lacking, seem to cause 80
percent of all claims).
- Incorporate this knowledge into compliance training
programs for all stakeholders within the organization.
Donald A. Phin, Esq.,
has been an employment and business litigation attorney since 1983 and earned certification
as a professional consultant to management (CPCM) in 1994. He presents workshops
and seminars for groups including The Executive Committee, CEO Club, Foundation
for Enterprise Development, Insurance Marketing and Management Services (IMMS),
and Risk and Insurance Management Society (RIMS). Mr. Phin is the coeditor of
EPLiC and the human resources consultant for IMMS. He is
the author of Building Powerful Employment Relationships
and LAWSUIT FREE! How To Prevent Employee Lawsuits.
His articles have appeared in The Risk Report, Business Insurance,
CFG Update, and other industry publications. He can be
reached at (800) 234-3304 or by e-mail at don@donphin.com.