Affirmative Action Planning Methodology 101 Part II · Affirmative Action Planning Methodology 101 ... Think Outside the Box Diversity and Equal Employment ... Item 9 (Cont.) (c)

Affirmative Action Planning Methodology 101

Part II

A presentation of the

BCG Institute for Workforce Development (BCGi) April 3, 2013

Recap

Plan Implementation

Audit Review

Compensation

OFCCP Updates

Resources

Questions and Answers

Agenda Part II

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1) Types of AAPs

• Establishment

• Functional

• Roll-Up

2) Number of AAPs to Develop

• Pros and Cons of a Roll-Up AAP

3) Required Components of the AAPs

• Narrative

• Technical Components

4) Developing Job Groups

• “Number that you look like”

Recap

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5) Determining the Availability

• Identifying the Factors and the Factor Weights

• External Factor

• Internal Factor

• Coming up with the “number that you should look like”

6) Setting Goals

• Answers the question: “Where are we at?”

7) Adverse Impact Analysis

• Answers the question: “How did we get here?”

Recap

Plan

Implementation

Copyright © Biddle Consulting Group, Inc. 5

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Designation of Responsibility and Accountability :

• CEO, Human Resource, Managers

Be aware of each individual’s role within the AAP

Know the AAP and be informed of problem areas:

• Personnel activity, personnel procedures, and selection disparity

• Compensation disparity

Develop and implement an auditing system that measures the effectiveness of its AAP:

• Monitor records of personnel activities -hires, promotions, terminations- and compensation.

If an X-Ray diagnosed a broken bone, wouldn’t you want to fix it?

Plan Implementation

Ref: 41 CFR 60-2.17 (c) 7

Action Oriented Program (AOP)

Develop and execute AOPs to correct any problem area

• Update annually to reflect procedures that produce measurable results

• Document ALL good faith efforts

Remove identified barriers

Expand employment opportunities

Plan Implementation

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Think Outside the Box

Diversity and Equal Employment Opportunities

• Incorporates workers in different pay classifications and personnel systems

• Including age, geographic considerations, personality, tenure issues, and a myriad of other areas

Plan Implementation

Plan Implementation

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Plan Implementation

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Plan Implementation

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1) Types of Audits

2) Audit Process

3) The Desk Audit Letter

4) Audit Checklist

5) Recommendations

Audit Review

Ref: 41 CFR 60-1.20 (a) 14

What is a Compliance Evaluation or Audit? An evaluation to determine if the contractor maintains

nondiscriminatory hiring and employment practices and is taking affirmative action to ensure that the contractor does not make employment decisions with regard to race, color, religion, sex, and national origin.

What information does the OFCCP have access to during a compliance evaluation?

• Applicants • Hires • Promotions • Terminations • Utilization • Compensation

Audit Review

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Types of Audits

1) Compliance Evaluation

• Desk Audit

Submission of AAPs and supporting documents to the OFCCP

Review of documents at OFCCP’s Office

• On-Site Audit

Conducted at the contractor’s facility

Inspection of company’s personnel and employment practices, documents

Can involve personnel interviews

2) Corporate Management Compliance Evaluation

• Review to ensure that there are no barriers to women/minorities when it comes to advancement within the organization

Audit Review

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Results: 1. No Apparent/No Technical Violation 2. Notice of Violation (Conciliation Agreement) 3. Show Cause/Recommendation for Enforcement

Yes

No

FCSS (ID’s Contractors for Audit)

Corporate Scheduling Announcement Letter

(ID’s Contractor’s AAPs for Audit in a 12-month period)

Desk Audit Letter

Contractor Submits AAP

OFCCP Reviews AAP

Problem Areas/Triggers Additional Data/ OFCCP On-Site

OFCCP Provides Audit Result(s)

Audit Review

Audit Letter and

Checklist


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Normally addressed to the President or CEO

* Tip: Route memo/email to anyone who may receive the Scheduling Letter informing them to immediately forward it to the proper personnel.

Audit Letter and Checklist

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Page 1: 3rd Paragraph

For the desk audit, please submit the following information:

(1) a copy of your Executive Order Affirmative Action Program (AAP) prepared according to the requirements of 41 CFR 60-1.40 and 60-2.1 through 60-2.17; (2) a copy of your Section 503/38 U.S.C. 4212 AAP(s) prepared according to the requirements of, respectively, 41 CFR Parts 60-741 and 60-250; and (3) the support data specified in the enclosed

Itemized Listing.

1) AAP for Women and Minorities


2) AAP for Persons with Disabilities and Veterans

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Itemized Listing

1. An Organizational Profile prepared according to 41 CFR 60-

2.11.

2. The formation of job groups (covering all jobs) consistent with criteria given in 41 CFR 60-2.12;

3. For each job group, a statement of the percentage of minority and female incumbents, as described in 41 CFR 60-2.13;

1. The Workforce Analysis/Organization Profile

2. and 3. The Job Group Analysis/Report


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4. For each job group, a determination of minority and female

availability that considers the factors given in 41 CFR 60-2.14(c)(1) and (2);

5. For each job group, the comparison of incumbency to availability, as explained in 41 CFR 60-2.15.

6. Placement goals for each job group in which the percentage of minorities or women employed is less than would be reasonably expected given their availability, consistent with 41 CFR 60-2.16.

4. Availability Analysis

5. Comparison of Incumbency to Availability Report

6. Placement Goals Reports


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Support Data

7. A copy of your Employer Information Report EEO-1 (Standard Form 100Rev., see 41 CFR 60-1.7) for the last three years.

7. Copies of your EEO-1 Reports (3 years) http://www.eeoc.gov/eeo1survey/

8. A copy of your collective bargaining agreement(s), if applicable. Please

also include any other information you have already prepared that would assist us in understanding your employee mobility (promotion,

etc.) system(s).

8. Collective Bargaining Agreements (if applicable)


http://www.eeoc.gov/eeo1survey/

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9. Information on your affirmative action goals for the preceding AAP year and, where applicable (see next slide), progress on your goals for the current AAP year. See 41 CFR 60-1.12(b), -2.1(c) and -2.16.


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Item 9 (Cont.)

For the preceding AAP year, this report must include information that reflects:

(a) job group representation at the start of the AAP year (i.e., total incumbents, total minority incumbents, and total female incumbents);

This report shows job groups with goals from previous reporting period only (e.g., previous AAP year). Actual hires and promotions into the job groups are also

shown. Goals are achieved if placement rate is equal or greater than goal/availability.


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Item 9 (Cont.)

(b) the percentage placement rates (% goals) established for minorities and/or women at the start of the AAP year;




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Item 9 (Cont.)

(c) the actual number of placements (hires plus promotions) made during the AAP year into each job group with goals (i.e., total placements, total minority placements, and total female placements). For goals not attained, describe the specific good faith efforts made to achieve them.




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Item 9 (Cont.)

If you are six months or more into your AAP year on the date

you receive this listing, please also submit information that reflects progress on goals established in your current AAP, and describe your implementation of action-oriented programs designed to achieve these goals (see 41 CFR 60-2.17(c)).


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10. Data on your employment activity (applicants, hires, promotions, and terminations) for the preceding AAP year and, if you are six months or more into your current AAP year when you receive this listing, for the current AAP year. These data must be presented either by job group (as defined in your AAP) or by job title (see 41 CFR 60-3.4 and 3.15).

10. Personnel Transactions Report


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a. Applicants and Hires:

The regulations at 41 CFR 60 2.17(b) and (d) require an analysis of your selection process, including whether the process eliminates a significantly higher percentage of minorities or women than non minorities or men.


OFCCP’s Focus

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Example of Summary of Personnel Transactions


Audit Letter and Checklist Internet Applicant

Solicit Race/Ethnicity & Gender

Required Optional

Retain Records

1. Individual Submits

Expression of Interest

(Electronic)

2. Contractor Considers Individual

for a Particular Position

3. Individual Possesses

Basic Qualifications

3 Conditions

of BQ: •Non-

Comparative •Objective •Relevant

4. Individual Does NOT

Self-Eliminate

Before Offer is Made

5. Individual

is an Applicant

Make an effort to solicit race/ethnicity & gender for all Applicants

Individuals who meet all 4 “prongs” are applicants and will be included in the Personnel Transactions and Adverse Impact Analyses

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Requires that contractors list job openings with the appropriate employment service delivery system. Employment openings subject to the mandatory job listing requirement include all positions except:

• Executive and top management positions,

• Positions that will be filled from within the contractor's organization, and

• Positions lasting three days or less. Listing with the appropriate employment service delivery system must be done concurrently with a contractor's use of any other recruitment source or effort.

Audit Letter and ChecklistR ecent Regulation Updates

Posting Requirements

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b. Promotions:

The regulations at 41 CFR 60-2.17(b) and (d) require an analysis of your promotion practices to determine if upward mobility of minority or female employees is occurring at a lesser rate (compared to workforce mix) than non minority or male employees.

• How are promotions defined?

An increase in responsibility, wage rate, and change in job title.


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Example of Summary of Promotions


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c. Terminations:

The regulations at 41 CFR 60-2.17(b) and (d) require an evaluation of the degree to which non discrimination policy is carried out with respect to employee terminations.

• Recordkeeping


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Example of Summary of Personnel Transactions


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11. Please provide annualized compensation data (wages, salaries, commissions, and bonuses) by either salary range, rate, grade, or level showing total number of employees and total compensation by race and gender. Present these data in the manner most consistent with your current compensation system.

11. Compensation Report

OFCCP’s Focus


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Basic AAP Contents (Under 6 months into AAP Year):

√ Narrative for Women and Minorities

√ Narrative for Persons with Disabilities and Veterans

√ Workforce Analysis

√ Job Group Analysis

√ Availability Analysis

√ Comparison of Incumbency to Availability

√ Placement Goals

√ Goals Progress Report

√ Summary of Personnel Transactions

√ Summary of Compensation


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6 Months into AAP Year:

√ Basic Contents (see previous slide)

√ Updated Summary of Personnel Transactions

√ Updated Goals Progress Report


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A few tips to consider:

1. Repair all inaccurate, wrong, or incomplete data.

2. Perform adverse impact analyses on all transactions.

3. Review compensation data.

4. Document and emphasize all EEO “Good Things.”

5. Prepare a professional and professional-looking AAP.

AAP has been, and appears to be “used” The personnel in charge of implementation can answer

simple questions regarding the Plan(s) The reports are complete and accurate

6. Consider performing a pre-audit “mock audit.”

7. Are you registering job openings with state agencies?


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A few tips to consider (cont.):

8. Reread the regulations.

9. Know your auditor.

10. Know your auditor’s time frame for decisions.

11. Document all conversations with reviewers.

12. Run the chain of command only when necessary.

13. GET HELP!!!!


Compensation


OFCCP’s Compensation Triggers:

Compensation

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2 or 2

• 2% or $2000

• Lower Threshold

• Easily Triggered

• Cohort Analysis

– File by file comparison

– Ideal for very small sample size

Compensation

Types of Analysis

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Compensation

Types of Analysis

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Scenarios Questions

Average Pay of Women: $20

Average Pay of Men: $25

Difference: $5 (20%)

Is there a potential presence

of discrimination?

Average Pay of Women: $20

Average Pay of Men: $21

Difference: $1 (4.76%)

Is there a potential presence

of discrimination?

Compensation

Types of Analysis

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• t-test

– Compares average salaries of two groups and asks

the question: “Is the difference in the average

salaries statistically significant?”

– Does not take into account any explanatory variables

= - 1 2

Compensation

Types of Analysis

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• Multiple Regression Analysis

– t-test with legitimate reasons

– Takes into account job-related explanatory variables

– It asks the question: “After taking into account the

job-related factors, does race/gender status still a

significant factor in the pay differences?”

Compensation

Education

Experience

Tenure

Performance

Compensation

Types of Analysis

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Questionable findings during compliance reviews can result in the OFCCP coming on-site as part of their evaluation.

• A claim of pay discrimination will most likely be supported with anecdotal evidence that is gathered on-site.

• A conciliation agreement is likely if anecdotal evidences supports

the statistical findings.

This may include back pay and interest to the disadvantaged groups.

Compensation

Recommendations

• All correspondence, analyses, and results should be covered under attorney-client privilege.

• Perform a preliminary “trigger test” analyses on all compensation data prior to submitting plan to OFCCP.

• Identify the factors/variables that affect compensation (may be different by location, department, etc.). Rank-order the list.

• Establish company-wide data collection/retention protocols for those compensation factors (beginning with the top of the list).

• Perform yearly, proactive regression analyses by job title and pay grade or SSEG (Important: Be mindful of “low lying fruit”).

• First perform “preliminary” regression analyses by including only 2-3 primary variables that are readily available.

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Compensation

Recommendations (cont.)

• Include additional relevant explanatory variables, if necessary.

• Evaluate all statistically significant differences using a non-statistical cohort analysis (i.e., file-by-file comparison).

In most cases, the OFCCP will only issue a Notice of Violation where there is both statistical and anecdotal evidence of discrimination.

• If proper regression analyses and a file-by-file cohort review fail to identify justifiable reasons for compensation disparities, calculate the amount needed to eliminate statistical significance and consider making changes

Important: Beware of the dog chasing it’s tail – perhaps conduct “what if” analyses.

• GET HELP!!!

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Compensation

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• Outreach and recruitment – active linkages.

• OFCCP is still aggressively pursuing Recordkeeping and Adverse Impact issues.

• Job posting – proof of posting.

• Lack of effort in job postings/recruitment is resulting in a high volume of conciliation agreements.

• EEO clause – make sure you include it.

• Desk/On-site audits.

• Renewed focus on compensation – be able to defend it.

• Active Case Enforcement:

Full compliance review for every 25th audit

OFCCP Update

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Books

• Adverse Impact and Test Validation: A Practitioner’s Guide to Valid and Defensible Employment Testing, 2nd Edition, Dan Biddle

• Secrets of Affirmative Action Compliance, 9th Edition, William Truesdell

• Compensation Analysis: A Practitioner's Guide to Identifying and Addressing Compensation Disparities Authors: Patrick M. Nooren, Ph.D., and Dan A. Biddle, Ph.D.

Websites

• www.biddle.com

• http://www.dol.gov/esa/regs/compliance/ofccp/faqs/iappfaqs.htm

• www.disparateimpact.com

• http://www.neli.org/

Resources

http://www.biddle.com/

http://www.dol.gov/esa/regs/compliance/ofccp/faqs/iappfaqs.htm

http://www.dol.gov/esa/regs/compliance/ofccp/faqs/iappfaqs.htm

http://www.disparateimpact.com/

http://www.disparateimpact.com/

http://www.neli.org/

http://www.neli.org/

• Establish relationships within your community

• Post on large national special interest group websites

• Document, document, document

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Veteran and Disability Outreach Program

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EEO Insight

Documents

Affirmative Action Planning Methodology 101 Part II · Affirmative Action Planning Methodology 101 ... Think Outside the Box Diversity and Equal Employment ... Item 9 (Cont.) (c)