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What is the Four-Fifths Rule?

The Four-Fifths Rule

Lead consultant at Test Partnership, Ben Schwencke, explains what is the four-fifths rule.

grey clock icon 1:08 Quickly understand what is the four-fifths rule.

The four-fifths rule is a guideline used to determine if there is adverse impact in the selection process of a specific group. The rule states that the selection ratio of a minority group should be at least four-fifths (80%) of the selection ratio of the majority group. For example, if the selection ratio for the majority group is 50%, then the selection ratio for the minority group should be at least 40%. If the selection ratio for the minority group falls below this threshold, it may indicate adverse impact.

The four-fifths rule is commonly used in the context of employee selection, particularly when it comes to legally protected groups such as ethnic groups, genders, age groups, and sexualities. Employers have a legal obligation to minimize any adverse impact in their selection processes, and using the four-fifths rule is one way to identify potential issues.

It is important to note that the four-fifths rule is only a guideline and should not be used as the sole indicator of adverse impact. Other methods such as chi-square statistics and Cohen’s d effect sizes can also be used to determine if the difference in selection ratio is statistically significant. Additionally, employers should also consider other factors such as representation, diversity, and candidate feedback when assessing adverse impact.

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