Two Standard Deviations
The 2 Standard Deviation Analysis is a complex mathematical test which usually results in a lower showing of under representation than the Four-Fifths Rule, especially if the job group being tested is small. This analysis is available in the Utilization Summary, Availability Analysis, and the Adverse Impact Analysis.
CALCULATION EXAMPLE:
Main Group = 29 && Male Employees Main Action= 3 && Male Layoffs Compare Group = 203 && Female Employees Compare Action = 55 && Female Layoffs
R = 58 && Main Action + Compare Action J = 55 && Compare Action P = 232 && Main Group + Compare Group H = 203 && Compare Group nSqrtval = ~(R/P) * ~((P-R)/P) * ~((1/H)+(1/(P-H))) nSqrtval = .007389162561375
nSqrt = SQRT(nSqrtval) nSqrt = 0.08596023825802
nValue = ~(((R-J)/(P-H))-~(J/H))/nSqrt nValue = -1.948432067234
nFinal = ROUND(nValue) && Round to 2 decimal places nFinal = -1.95
Additional Notes For the Adverse Impact Analysis:
If the analysis being performed is positive, then the group passes the 2 Standard Deviations test if the number being reported is less than 2.00 (or the report states the result is not statistically significant). If the analysis being performed is negative, then the group passes the 2 Standard Deviations if the number being reported is greater than –2.00 (or the report states the result is not statistically significant).
2 Standard Deviation Test for Goals Setting
The 2 Standard Deviation Test is used to establish placement goals when comparing the availability to the current utilization of women and minorities in the workforce.
Calculation Example:
P = Availability % of women or minorities = 20% N = Total employees in job group = 200 O = Total women or minorities in job group = 31 SD = Standard Deviation SQRT = Square Root
SD Formula:
SD = SQRT[P x N (1-P)] SD = SQRT[(.20) x (200) (1-.20)] SD = 5.66
Expected Number = P x N = (.20) x (200) = 40
Number of Standard Deviations = [Expected Number – (O)] / SD
= (40 – 31) / 5.66
= 1.59 Standard Deviations
In this example, 1.59 standard deviations falls below the 2 standard deviation threshold and the contractor does not need to establish a placement goal.
