Adverse Impact

Meaning & Definition

Adverse impact refers to the situation when HR policies, processes, or decisions seem neutral but have an unintentional negative effect on a specific group of employees or job applicants. Adverse impact may be seen widely in recruitment, assessment, promotion, and performance management. Tracking the adverse impact is important for HR to ensure fairness, equal opportunity, and to follow a people practice that is free of bias.

Important features of adverse Impact:

• Identifying Unintentional Bias in Hiring and HR Decisions.
• Recruitment and Promotion Practices that are Fair and Inclusive.
• Minimizing Employee Complaints and Legal Risks to the Organization.
• Improving Assessment and Selection Process Credibility.
• Supporting Organizations in Strengthening Diversity, Equity, and Inclusion Initiatives.

Compliance & Policy Considerations:

There is no statutory compliance as such to this term under Indian Legal Jurisdictions.

However, these analyses support:

• Unbiased employment principles of Indian Labour Laws.
• Diversity & Inclusion Policies.
• Policies against discrimination.
• Values of ethical recruitment and fair hiring practices.

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