HR Tech’s Adverse Problem

While I totally loitered at the Society for Industrial and Organizational Psychology Conference (I was a presenter, just failed to register – oops), I’d thought a post on what we talked about yesterday and a bit about what’s happening at the University of Minnesota’s HR Tomorrow Conference today: adverse impact, why it’s important, and why you should care.

Adverse impact (known as “disparate impact” by the lawyers) is when groups of individuals described by a particular characteristic is negatively affected by an employer’s decision, selection tool, or policy when that decision, tool, or policy is neutral on its face or does not intend to actually have a negative impact.  For example, if an employer uses a psychological test that filters out African Americans, the test would have an adverse/disparate impact on African Americans.

The concept of disparate impact has been around for a long time.  The United States Supreme Court in Griggs v. Duke Power formally recognized the claim.  Since that time, the law has been debating many aspects of the claim, including what statistical models to use, does the doctrine apply if the rule intends to discriminate, how does impact different from treatment, and will the doctrine apply to all the HR technology out there.  While this post could go on-and-on about all of these questions, this last piece is really important for HR tech buyers, and the answer is probably.

We already know that lots of HR technology vendors, including the fancy-dancy stuff like artificial intelligence, machine learning, algorithms, etc., market their products as the only way to find the best candidates, identify problem employees, and make all your dreams come true.  When these technologies are used, their use could create a disparate impact.  How do we know?  Because we’ve already seen how these technologies discriminate outside the world of HR – see photo ID that classifies African Americans as gorillas, recidivism tools that increase prison terms for African Americans, etc., so it is highly likely that they could operate the same way when it comes to HR tech.  Arguably, HR tech has the potential to greatly impact because the decisions HR makes affect individual’s livelihood.

So what should we do about diverse impact?  While there are many, many things we need to do to limit the potential that the HR tech we use doesn’t discriminate, we should start with two things.  First, we have to know how the technology works and the data it uses to make recommendations.  This requires vendors to be open and honest with us, lose the marketing gloss, and really explain their products. Can they explain how the tech works?  Can they explain how the tech works on our organization’s data?  Could the data have bias baked in?  (The answer to this last one is probably yes, especially if we’re looking at hiring or performance data.  There’s just no escaping it.)  When vendors are transparent and honest about these issues, we can take more steps to mitigate any disparate impact the tech might have.

Second, we need to test and test and test to see if the tech creates the disparate impact.  Lawyers and data scientists talk about validation as the test.  For lawyers, validation means under the Uniform Guidelines for Employee Selection Procedures.  For data scientists, validation means how strong the correlations are statistically.  This definitional problem causes more debate and potential confusion.  So, we need to find vendors who understand, appreciate, and can articulate validation under both tests.  Because the HR tech world is a bit like the wild, wild west, it’s hard to find them. (Trust me, they’re out there.  I’ve probably met them or at least brow-beat them from a distance on this very issue.)

All that said, I want HR to understand and appreciate that these issues could exist and start playing an active part in fixing these issues.  While I’d love for everyone to trust each other, placing blind faith in a vendor is not in our organizations’ best interest.  Holding people accountable is one of the strengths in HR.  We should use it here too.

One final note, I love this stuff.  This tech is going to revolutionize how we do business.  I just want to do it in such a way that doesn’t create that much risk for our businesses.  Remember my pledge?

 

Photo by Patrick Lindenberg on Unsplash

Happy Equal Pay Day?

Today is Equal Pay Day.  According to Institute for Women’s Policy Research, white women make only 80.5 cents for every dollar men make.  The wages are even lower for Black and Hispanic women.  (Hispanic women will have to work an additional 232 years for pay parity!)  We all know that something has to be done about it.  So how is the wage gap going to change?

Salary History Bans.  According to HRDive, seven states and six localities have prohibited employers from asking candidates about their current or previous salary histories.  The theory supporting the bans is that if an employer sets an employee’s wage based upon what she previously made, the new employer may be perpetuating the wage gap.  If an employer can’t ask the previous salary history, then the employer will be setting the wage on either the market rate for the position or based upon what the employee desires – a question that is not prohibited.

For reasons that remain a mystery, some are vehemently opposed to salary history bans.  Michigan passed a law prohibiting any localities from enacting salary history bans while others have initiated a lawsuit to prohibit the law from going into effect.  Their arguments for asking the question and as such against the bans are stopping title inflation, salary histories actual verify previous performance, or we already have laws that prohibit wage disparity.  However, we still have significant wage disparity.  So if we can’t ask one question, will our entire recruiting process fall?  (Spoiler:  No.)

Yes, there are detractors to salary history bans.  They argue that salary history bans will hurt women in the long-run given our poor salary negotiation skills.  However, if we set salaries based on the market and our own payroll, then the job pays what it pays.  No negotiation necessary.  Try the Ellen Pao method.

Reinterpret Existing Law.  Yesterday – one day before Equal Pay Day – the Ninth Circuit Court of Appeals held that a candidate’s previous salary cannot be a defense to an Equal Pay Act claim.  Specifically, Judge Stephen Reinhardt (in what may be his last opinion) wrote, “To hold otherwise—to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum—would be contrary to the text and history of the Equal Pay Act.”  This decision is a big deal for a couple of reasons:  (1) an employee’s previous salary could have been used as a defense to a wage gap previously – this decision stops that, (2) the decision bolsters salary history bans, and (3) the decision limits employer discretion in determining pay to only job-related criteria for determining pay.  This alters the law in a way that may reduce the wage gap.

Market Rule.  I, like many others, encourage employers to use market rates.  This means that employers have to invest and participate in salary surveys.  That said, the benefit of paying the market rate without regard to what a candidate used to make levels the playing field for employers and candidates.  Employers can feel confident that they are going to find candidates and differentiate themselves from their competition based on workplace culture.  Candidates can differentiate between employers without regard to pay.  They can find the workplace that fits them best.

When it comes to the wage gap and Equal Pay Day is that we have to do better.  Use market rates, don’t ask salary history questions (on applications or in interviews), review your payroll to determine if gaps exist, and work with your friendly neighborhood employment attorney to help do the right thing.

If you’d like more information or to read some opinion on Equal Pay Day, check out Lilly Ledbetter’s take.

Photo by Sharon McCutcheon on Unsplash

More Ways Not To Fire

Last May, I offered my tips on terminations, including not firing via cable news ticker.  Apparently, my tips went unheeded by some prominent terminators.  So, in an update to that post, I offer some more tips.  (Warning:  This post comes laced with sarcasm.)

Don’t fire someone when they have a stomach bug.  When someone is vomiting or plagued with diarrhea, it’s considered bad manners to terminate them when they are on the toilet. Wait until you can see their face without invading a bathroom.  Heck, what you’re about to tell them might make them sick all over again.  Let them get past the first round of sickness.

Don’t fire someone within hours of his pension vesting.  The Employee Retirement Income Security Act is a real thing.  ERISA Section 510 retaliation claims are a real thing.  Section 510 states that it is unlawful to discharge for the purpose of interfering with the attainment of a right (i.e. pension).  If you terminate someone to avoid pension liability, it’s likely that a Section 510 claim is in your future.  This is on top of any claims the individual may have if he is in the public sector.

Don’t be mean.  The very act of terminating someone is already seen as mean.  Not many people want to work for a mean employer.  Mean employers have trouble finding people to fill roles.  Mean employers get nasty Glassdoor and Indeed reviews.  You do not want to be that employer.  Try to give the individual you are terminating as much dignity as possible.  Don’t let them find out via press release.  Be brave and do it face-to-face.  Anything else is seen as cowardice.  Post-it notes, emails, texts, cable news ticker, tweets, Slack message, etc. are all cowardly ways to terminate.

I don’t mind firing people.  By the time my clients call me, they have toiled with the decision to terminate, they’ve lost sleep over it, and have thought of all the other possible alternatives. So, I’m reaffirming their gut instinct and offering my theoretical airbags and seatbelts to the term.  I’m also advising them on how not to fire badly.  Please read all of my tips on how to fire and then heed them.

 

Photo by Jamie Street on Unsplash

#UltiConnect!

This week, I was honored to be included in a loveable group of yahoos – I mean, influencers – at Ultimate Software’s Connections Conference in Las Vegas.  These people are leading the way in human resources and technology, and I’m lucky to call them friends.

The conference itself was really something.  While Robin Roberts and John O’Leary’s keynotes were fantastic, it was Ultimate Chief Executive Officer Scott Scherr who left the biggest impact on me.  Mr. Scherr’s general session did not focus on what was new or why his leadership has brought success to the company like how many other CEOs may have spent their time.  Instead, he focused on his people.  He went through a list of Ultipeeps who have made a difference.  This list was impressive, even if he was slightly embarrassing a few of them.

But what really got me was how Mr. Scherr focused on their “People First” mantra as not just a mantra but a lifestyle.  In a presentation to SHRM in 2009, Mr. Scherr said the following, “The measure of a company is how they treat their lowest paid employee.”  In this year’s session, Mr. Scherr talked about how the character of the company relies on the character of its people.  When you hire good people, you treat them well, they will take care of the 3,700 customers there at the conference and all those who were unable to attend.  This is so true.  Another (more lawyerly) way to look at this is when people are treated well, the compliance risks are significantly lower for an organization.

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If you’d like to see the sessions where I presented, please see the links for employee communication (I start at 17:25) and women in leadership.  The women in leadership session was made up of some fantastic women!  I highly recommend spending some time to learn from them.

 

Let Go of Welcomeness

In the legal world, welcomeness has been an element of a sexual harassment claim since Meritor Savings Bank v. Vinson – the first U.S. Supreme Court case to recognize sexual harassment under Title VII.  Did the alleged victim welcome the breast grab?  Did she engage in the sexual banter herself?  Did he want his “junk tapped” by coworkers?  If a claim is going to be successful, this analysis is a must.

Yet, this legal standard doesn’t capture the reality of workplace harassment.  It ignores several factors that are at play that could suggest the conduct is welcome when it is most definitely not.  Let me try to convince you that we need to focus on the conduct or comments of harassment and not whether that same conduct is welcome.

People say, “it’s okay” to make the encounter end quickly.

When something bad happens, we often say, “it’s okay” because we want a couple of things: (1) we don’t want to really talk about how we’re feeling, and (2) we want to get out of this situation.  This happens with sexual harassment too.  If someone grabs a butt or a breast – especially if that person is a co-worker or god forbid a manager – we want to get out of this situation fast.  Like super duper fast.  If we actually talk about how this feels or if we challenge a person who has input on our career (including co-workers), we might feel that we’re going to make the situation worse.  So, we say, “it’s okay,” “don’t worry about it” or even shrug it off.  These words or shrug are not words of consent but are words of resignation.  We’re resigned that this happened, and we want to move on.

People do this all the time.  We don’t always confront our racist uncle at Thanksgiving dinner or our pastor after a particularly homophobic sermon.  We don’t because we don’t want to cause trouble.  So, why do we make harassment targets do the same thing to prove that they actually were harassed?  (If I had a dime for every harassment policy that says you must tell the harasser to stop as the first step…)

For HR and harassment investigators, the “it’s okay” is a challenge.  For those focused on whether the conduct was welcome, this is the silver bullet.  She said, “it’s okay” so it must be.  It was welcome.  Nothing to see here.  No harassment.  This is the problem. Reminder: Employers have an obligation to keep harassment out of the workplace. Employees have no obligation to report under the law.

Even when sexual conduct is welcome, it’s unwelcome to somebody.

In harassment trainings, I go through a bunch of scenarios.  One of my favorite rapid-fire scenarios is this:

Colin has been head’s down on a project for weeks.  The project is finally over, and he accompanies the team to happy hour to celebrate.  He’s so happy to be done with the project, he kisses Judy.  Is this harassment?

Without fail, within five seconds of reading this scenario, some jokester yells out “what if Judy is his wife?”  I give him (always a him), a look that screams “listen, buster” and calmly say, “Do you work with your wife?”  (Hushed giggles throughout the crowd.)  If Judy was Colin’s wife, arguably he does not engage in sexual harassment as the law would view it.  If Judy is his wife and they begin a rigorous game of tonsil hockey, then the team around them turn their heads away, get up to go to the bathroom, and/or otherwise consider calling it a night.  If this happens, there is an arguable case for sexual harassment since the team clearly did not want to watch the competitive sport of kissing as played by their coworkers.

Here’s another rapid-fire example:

Peter and Juliet joke around all the time.  The jokes have turned flirty with both commenting on each other’s bums.  Is this harassment?

Depending on the industry I’m training, a varying degree of uncomfortableness spreads throughout the crowd.  They suspect the answer is yes, and some will admit they may have done this but they’re not sure if this is “illegal.”  I explain that I’ve helped an organization in a very similar circumstance where the banter was consensual, but the person next to them had to hear it day in and day out.  Eventually, he complained to his boss who then promptly fired him.  While the underlying sexual harassment claim might not have been actionable, the retaliation that resulted was clear.  The lesson here for employees – don’t engage in sexual banter even when you and the other person wants to.

Even when sexual conduct is welcome, it doesn’t always stay welcome.

News flash:  Romantic relationships fail at an alarming rate.  Consider all the relationships that an individual has to go through before marriage.  Then consider that half of marriages fail.  That’s a lot of failed relationships.  In the workplace, relationships fail a lot too.  When a welcome, romantic relationship fails the potential for harassment or retaliation to occur is high.  Scorned lovers – male or female – exist and wreak havoc.  They can seek to rekindle their love with unwanted words, gestures, and touching – all potential conduct in violation of an employer’s sexual harassment policy.

Let’s let go of welcomeness.

When we get a complaint of harassment, we need to look at the conduct or comments that led to the complaint.  It shouldn’t matter whether the conduct was invited or even wanted.  What should matter is that we don’t want our employees, clients, customers, vendors, etc. to watch a rigorous game of tonsil hockey, a butt grab, or hear a particularly randy joke.  We shouldn’t tolerate it in our workplaces regardless of whether it was the married couple in cubes four and ten or the supervisor to her employee in the breakroom.  It’s the conduct that is the problem, not whether it was welcome conduct.

Photo by Sweet Ice Cream Photography on Unsplash

Beyond Legal Risk

Harassment is a costly business.  The actual cost of a harassment lawsuit could include wage loss, emotional distress, civil penalties, and attorneys’ fees.  The actual monetary hit a company can take is not small.  In theory, it could put a business under.  But there is a much, much larger risk that employers need to understand – the loss of reputation.  The loss of reputation falls into two distinct yet related categories:  loss of customers and loss of employees and candidates.

Loss of customers (or vendors, suppliers, etc.) is not insignificant. Signet Jewelers lost significant revenue when women turned away from its jewelry stores after harassment and discrimination issues came to light.    When Uber placed a surcharge on riders headed to airports to protest immigration issues and followed closely by Susan Fowler’s blog post outlining the rampant gender discrimination and harassment at the ride hailer, Uber suffered mightily.  It lost revenue, over a quarter of a million users, and become under close scrutiny around the world.

A loss of customers does not just affect large companies.  Small and medium-sized companies who are embroiled in scandal can get shuttered too.  For example, a Charlotte, North Carolina eye doctor surrendered his medical license and filed bankruptcy after sexual harassment allegations came to light.  A tech startup (in the HR-space no less) can’t raise funds or keep valuable customers after its CEO resigned in disgrace following harassment allegations.  This idea that harassment allegations can’t happen here is a myth unless you actively and obsessively build a respectful workplace.

Keeping and finding talent is also a challenge for a company with a reputation problem.  Uber employees were looking for the exits after Ms. Fowler’s blog post.   Employee turnover is high when a bully or harasser is able to stay with a company as inappropriate comments or conduct is a sign of a bad corporate culture.  Recruiters have to work harder, explain more, and actively try to “sell” your culture rather than let your culture speak for itself.

These days with review sites like Glassdoor and Indeed as well as social media, candidates can also get a good sense of a company culture well before an interview.  Take this Glassdoor review.  The review states that this employee is “sexually harassed on a daily basis.”  Or this review that states that the owner “encourages a hateful and discriminatory environment[.]”  Or even this review on Indeed that simply says, “Do NOT Apply if you are female.”  By a Glassdoor survey, 70% of candidates read reviews before interviewing with a company.  Will the reviews you get effect who wants to apply and/or interview with you?

Today, the Weinstein Company is likely to declare bankruptcy.  The Weinstein Company is not the first company to seek bankruptcy protection after an explosive sexual scandal.  American Apparel, Bikram yoga, Le Cirque, and neighborhood Mexican restaurants have all entered into bankruptcy following allegations of sexual harassment.  It can happen to any company who does not take the risks of sexual harassment seriously.  But these are just the financial risks.  The long-term effect of a bad reputation will linger on these companies and their products and services.  So, if you’re concerned about harassment in your workplace, do something about it now.  While not all small and medium-sized businesses will make the front page when harassment allegations surface, customers, suppliers, candidates, and employees will learn about it.  Don’t let it fester and get bigger and even more toxic and damaging.

 

Photo by Daniel von Appen on Unsplash