Risk Management

Question 1

_____________ are calculated by dividing groups with lower selection rates into the groups with the highest selection rate.

Answer 1

Impact Ratio

Question 2

A significantly different rate of selection in hiring, promotion, or other employment decisions that negatively & disproportionately impacts members of a specific race, gender, or ethnic group.

Unintentional discrimination, compared to disparate treatment, which is intentional.

Answer 2

Adverse Impact
(or disparate impact)

Glossary: Risk Management

Question 3

An employment decision, practice, or policy that intentionally disadvantages members of a protected class.

Answer 3

Disparate Treatment

Compared to adverse impact, which is unintentional discrimination, disparate treatment is intentional.

Glossary: Risk Management

Question 4

Allowing a negative trait to overshadow all other qualities

Answer 4

Horn Effect

Answer 5

Personal Bias

Question 6

Adverse/disparate treatment involves __________

Answer 6

Intentional Discrimination

Question 7

Adverse/disparate impact occurs ______________

Answer 7

Unintentionally

Question 8

In _________________, the risk is shifted from the organization to another party.

Answer 8

Risk Transfer

• Standard: Risk Management Standard #3
• Location: Course Foundations of Human Capital Management, Lesson - Risk Assessment & Mitigation

Question 9

Adverse Impact Analysis Steps

Answer 9

1) Calculate selection rates for each group
2) Identify the group with the highest selection rate
3) Calculate the Impact Ratios based on that group
4) Identify values below 80% or 4/5

• Standard: Risk Management standard #1
• Location: Course - Foundations of Human Capital Management, Lesson - HR Laws and Policies

Question 10

________________ is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee based on various protected characteristics.

When an individual files a discrimination complaint against their employer with this group, they investigate the claim to determine whether there’s merit to the allegations.

Answer 10

EEOC (Equal Employment Opportunity Commission)

• Standard: Risk Management standard #1
• Location: Course - Foundations of Hauman Capital Management, Lesson - HR Laws and Policies

Question 11

What is NOT a requirement for organizations under the Fair Credit Reporting Act (FCRA)?

Answer 11

A. Don’t use credit information to make employment decisions

Under the Fair Credit Reporting Act (FCRA), employers are allowed to use credit reports for employment purposes, but certain conditions must be met.

• Study Resources: Practice Questions
• Standard: Risk Managment standard #1
• Location: Course - Foundations of Human Capital Management, Lesson - HR Laws and Policies

Question 12

Under the Fair Credit Reporting Act (FCRA), employers (are/are not) allowed to use credit reports for employment purposes, but certain conditions must be met.

Answer 12

Are allowed

• Standard: Risk Managment standard #1
• Location: Course - Foundations of Human Capital Management, Lesson - HR Laws and Policies

Question 13

____________involves splitting the risk into different areas.

Answer 13

Segregation

• Standard: Risk Management standard #3
• Location: Course - Foundations of Human Capital Management, Lesson - Risk Assessment & Mitigation

Question 14

_____________ is establishing controls to lower risk

Answer 14

Reduction

• Standard: Risk Management standard #3
• Location: Course - Foundations of Human Capital Management, Lesson - Risk Assessment & Mitigation

Question 15

________ is spreading out the risk

Answer 15

Sharing

• Standard: Risk Management standard #3
• Location: Course - Foundations of Human Capital Management, Lesson - Risk Assessment & Mitigation

Question 16

________is shifting the risk to a thrid party

Answer 16

Transfer

• Standard: Risk Management standard #3
• Location: Course - Foundations of Human Capital Management, Lesson - Risk Assessment & Mitigation