Team Case #1
HMRS 5435.01
Employee Plan, Staff, Selection
UH-Clearlake
Group 4
Members:
Charlotte Duchesne
Kayla Gardner
Charlotte Horne
Quyen Le
Tiffany Sweet
Andrew Szymczak
HMRS 5435.01
Spring 2013, Group 4
Members: C. Duchesne, K. Gardner, C. Horne, Q. Le, T. Sweet, A. Szymczak
1. Analyze the table in Exhibit 1.24. What conclusions do you reach? Is there evidence of
discrimination in promotion decisions?
After analyzing the table in Exhibit 1.24, there indeed seems to be discrimination practices occurring at
Food Chain, Supermarkets Inc. According to the 80% rule, which determines whether a company’s
selection system has an adverse impact on applicable minority groups, the following promotion ratios
were found for Food Chain’s units:
Warehouse/stores (2006): Black Promotions (7.39%) ÷ White Promotions (10.66%)= 69.32%
Warehouse/stores (2005): Black Promotions (9.27%) ÷ White Promotions (8.62%)= 107.54%
Warehouse (2006): Black Promotions (7.50%) ÷ White Promotions (10.21%) = 73.46%
Warehouse (2005): Black Promotions (10.90%) ÷ White Promotions (8.07%) =135.1%
Stores (2006): Black Promotions (7.20%) ÷ White Promotions (10.80%) = 66.67%
Stores (2005): Black Promotions (6.10%) ÷ White Promotions (8.73%) = 69.87%
From the calculations, it is clear that the promotion rate for the units including warehouse/stores in 2006,
warehouse in 2006, Stores in 2006 and Stores in 2005 were below the 80% test in regards to adverse
impact. Food Chain would need to provide a legitimate reason as to why the promotional rates were
higher for White employees in comparison to Black employees. The promotional rates are not
significantly under 80%, as the lowest rate was at 66.67%. Also, a few ratios were well above 80%. This
shows potential for Food Chain to recover from this disparate treatment of minorities as the changes and
policies needed could be quite manageable.
2. Do you believe that Gemson, Thompson, LeBlanc, and Jackson were discriminated against?
For the case of Clifford Gemson alone, it would be difficult to judge that he was discriminated against.
The white employee who was promoted in place of him did have seniority and there could have been
other factors that we do not know about leading to this selection decision (such as demonstrated
competencies). However, when you group him with Thompson, LeBlanc, and Jackson, who were all
passed up for promotions by Caucasians with less seniority and less management experience, this displays
a pattern that sends up a red flag indicating discrimination. Also, when you apply the four-fifths rule to
promotion rates, we find that there were not enough blacks promoted in 2006. For example, in 2006
10.66% of Whites were promoted in the warehouse and stores. With the application of the four-fifths rule,
there should have been 8.53% (10.66%×80%) of Blacks promoted when there were only 7.39% of Blacks
promoted. The selection pattern that sends a red flag combined with the disregard for the four-fifths rule
would be enough to establish prima facie in a discrimination case.
3. What are some of the potential disadvantages of a ‘‘word of mouth’’ promotion system?
A word of mouth promotion system is not a transparent selection system. Decisions are not made by what
skills and abilities the person has. It is about ‘who you know’, and not ‘what you know’. The best
HMRS 5435.01
Spring 2013, Group 4
Members: C. Duchesne, K. Gardner, C. Horne, Q. Le, T. Sweet, A. Szymczak
available candidate may not be selected to fill the open position. Other staff members who feel they
would have been a better fit for the open position would become disgruntled. As an example, I worked at
a company where they were hiring and promoting friends of the manager; even if the person was not the
best fit. Soon projects missed deadlines and went over budget because the staff was not equipped to
perform efficiently. The manager was fired and most of the staff was fired due to performance. A word of
mouth promotion system could result in race discrimination. If the majority of the recommendations are
being made by white supervisors, most likely the majority of people being promoted are white staff
members.
4. What should Rutherford do now?
Since Rutherford has begun the investigation into a claim of discrimination, the first thing Rutherford
should do is inform his management or upper management at Food Chain Supermarkets Inc. of his
findings. The next step is to discontinue the current promotion procedures and policies causing the
discrimination, and instead implement a different system and procedures for promotion. This should
include posting jobs to notify and allow employees to apply through a more formal process (further
explained in our answer to question 5). Selection criteria used to make these promotion decisions should
be job related. In addition, discrimination training should be provided to all managers and employees in
the company to help prevent this type of discrimination from happening again, and to show the current
employees that steps are being taken to remedy the current situation. Rutherford also needs to follow up
with any employees who voiced a complaint of discrimination, or who were the victims of discrimination.
A voluntary affirmative action program would remedy the effects of the past discrimination and help the
company meet the requirements of the four fifths rule.
5. What kind of policies can the company design to better integrate minorities into management
positions?
There are three key statements within the case that indicate where improvements can be made to the Food
Chain Supermarkets, Inc. Human Resources practices: “There was no system for employees to apply for
promotions” , “Job vacancies were not routinely posted”, and “Written performance evaluations were
limited to office employees, merchandisers, and store managers”. The first policy this company needs to
implement is a formal system to advertise and allow employees to apply for promotions. In order to
mitigate the possibility of discrimination, the company uses a promotion system that allows full and open
completion for all interested and qualified candidates. This promotion system policy will also help
alleviate the issue the company has with their job vacancy postings. The new promotion system policy
must be integrated with a vacancy announcement system that ensures all current employees know when
vacancies within the company are available. The means of posting the vacancies should be commensurate
with the current communication tools that are being used in each level of the organization. For example, a
vacancy that would be considered a promotion for a forklift driver must be announced in a manner where
the driver would be able to know about it (like on a bulletin board or common area that all employees
visit routinely). It would be discriminatory (and potentially discriminatory to minorities) if the company
only posted vacancies online because certain workers might not have ease of access to that particular
means of communication. Lastly, the company needs to develop and implement a policy that forces all
employees to receive written performance evaluations annually. This will force supervisors at every level
to provide quantitative feedback to every employee in the company. It will also establish a more objective
basis for employees to be ranked and compared. The current system is too subjective and susceptible to
discriminatory tendencies against minorities in lower level positions within the company.