4D Desk Audit – Review of the Organizational Profile, Job Group Analysis and Utilization Analysis

A CO should determine whether there is a marked decline in the participation of specific groups of individuals. This section covers conducting an analysis and determining the participation rates for nonfavored groups in top and middle management.

As a general rule, a corporation selected for a CMCE should be large enough to have job groups extending beyond the standard EEO-1 categories. Therefore, the top management level may be immediately evident from a scan of the job group analysis. When this is not the case, actual job titles, in conjunction with reporting relationship to the CEO, are usually reliable indicators of the top management level.

Typical titles at top levels include Executive Vice-President, Senior Vice-President, Comptroller, Chief Financial Officer and Vice-President. Reporting relationships are usually reflected in the corporation’s organizational charts. The very top level consists of individuals reporting directly to the CEO; the second level consists of those individuals who report directly to the top-level managers. While the number of reporting levels regarded as “top management” varies with the size and structure of the particular corporation, more than three levels down at the headquarters establishment is usually considered middle management. People at that middle corporate level may, in turn, be top management at subordinate establishments.

Middle management is different. Again, the job group analysis may be the easiest way of determining what positions large corporations classify as middle management. However, when that is not the case, salary may be a more reliable determinant than title. It may be best for COs to use salary level, range or grade as reflected in the workforce analysis or organizational display to identify where nonfavored group participation declines.

When management levels are still unclear, COs must obtain more information before proceeding by contacting corporate human resources and making a request for clarification. Assuming management levels are defined, COs would move to their analysis of nonfavored group participation at these levels.

a. Analyzing Nonfavored Group Participation. In addition to analyzing and utilizing the normal EEO trend data, COs must conduct a breakout analysis specifically of the O&M categories. COs should total the number of O&M jobs by grade, race, ethnicity, sex and disability status across department lines. In doing so, they must keep track of the departments in order to examine the functional distribution of jobs at a later stage. FCCM 4D01, Functional Areas, may be a useful supplement to this discussion.

b. Identify Marked Decline. COs must identify whether there is a level at which there is a marked decline in any group’s participation. A marked decline is the highest level with proportionately fewer nonfavored group members than the level immediately below but, except in rare cases, not the level without any nonfavored group members. There may be a single level at which there is a marked decline for one or more nonfavored groups, or there may be multiple levels at which a marked decline exists for different groups (e.g., there may be one level at which there is a marked decline of the participation of Hispanics, another level where there is a sharp decline in the participation of females, and a third at which there is a marked decline of individuals with disabilities). Marked declines also may differ by various functional areas.

The determination that there is a marked decline in nonfavored group member management participation will focus further CMCE investigation in two areas:

• At and above the grade or level where nonfavored group participation declines. At this level, the focus should be on whether the incumbent nonfavored group members are treated in a nondiscriminatory manner in all aspects of their employment.
• Below the grade or level where nonfavored group participation declines. At this level, the focus will be on why nonfavored group members have not advanced further. Specifically, areas to explore or questions to ask are:
  • Whether unlawful discrimination kept group members from advancing beyond that grade, either because of discrimination in the selection practice itself or because of discrimination in employee development practices, or in assignment to career paths or feeder pools for higher-graded positions.
  • Whether the contractor identified and removed any impediments to EEO in selection procedures for higher-level positions. Such impediments might include management review procedures or contractor actions regarding formal or informal career paths and feeder pools.

Functional analysis is essentially analyzing whether career paths and feeder pools are determined by participation in specific functional lines. Absences of a particular group, observed in EEO categories, can often be a direct result of a functional line progression that has barriers to employment at early stages of career development (e.g., at a major aircraft manufacturing contractor, upper management may almost exclusively come from the engineering functions where there may traditionally have been fewer women). A functional analysis may also reveal more general issues, such as hiring/placement disparities into certain professional categories. To conduct the appropriate analyses COs must:

• Identify major functional areas;
• Identify absences and concentrations in functional areas of certain groups;
• Determine whether the major functional areas are “line” or “staff;”
• Identify feeder pools;
• Compare feeder pools to higher-level jobs; and
• Examine the disparity between nonfavored and favored groups.

a. Identify Major Functional Areas. COs should return to the workforce analysis or organizational display and review departmental data to determine “major functions.”

What is a “major function” will vary within a given corporate structure. However, a major function is usually headed by a manager who has either a “direct” or “second level” reporting relationship to the CEO, and typically includes or covers several departments.

Common “major functions” at a corporate headquarters include: Finance (under a Comptroller or Chief Financial Officer), Legal (under a General Counsel or similar title), Personnel or Labor Relations (under a Vice President for Human Relations or similar title), and Marketing, Sales and Research.

b. Absence and Concentrations in Functional Areas. In each major functional area, COs should analyze participation in exempt jobs (managerial, professional and, as applicable, sales) to determine if particular groups are excluded or concentrated.275 They should also analyze exempt jobs in any other functional areas where members of one sex, race or ethnic group are absent, underrepresented or concentrated.

c. “Line” versus “Staff.” COs must identify whether the major functional areas are “line” or “staff.” A line area is one that directly contributes to the corporation’s profitability and generally focuses on a specific area; a staff area is one that primarily supports line functions.

Line jobs will vary a great deal depending on the corporation’s product or service, but will include jobs and functional areas that are essential to producing and selling the product or service.

For example, at a consumer products firm, manufacturing, marketing and sales would be major line functions; at a consulting firm, the consultants would be line jobs; and at a high-tech firm, research and engineering would be line functions. Staff functions typically include personnel, labor relations, purchasing, finance, legal and facilities management.

While line and staff jobs are often at the same base salary, line jobs are more likely to be eligible for significant bonuses making their total compensation considerably higher. Also, the corporation is generally more likely to have promoted top management from line positions, although it is not unusual for top managers to have experience in line and staff positions.

COs must analyze the proportion of line versus staff exempt jobs in the workforce, and determine whether there is a significant difference in the workforce composition of the line and staff functions. COs should note as an area requiring further investigation any concentration of a particular race, ethnicity or sex in staff functions. At the on-site review, the CO should then review personnel files and conduct interviews to ensure that the presence of any concentrated groups in staff positions, despite having education/experience pertinent to the corporation’s line functions, is not resulting from “steering” either at or after hiring.276 Similarly, COs should note any concentration of individuals with disabilities or protected veterans in staff functions, and ensure during the on-site review that such concentration is not the result of “steering” at or after hiring.

d. Identification of Feeder Pools. COs should examine the utilization analysis and the raw personnel activity data from the AAPs to determine the most likely feeder pools for the jobs at and above the grades/levels where participation by one or more nonfavored groups declines. However, it is important to remember that potential feeder pools are not necessarily limited to the headquarters workforce. Therefore, COs may need to request additional data.

The likely feeder pools are not limited to subordinate management jobs, but may include professional jobs and/or other positions at comparable exempt grades. Likewise, feeder pools are not necessarily restricted to the functional area in which a particular management job is located, but they are most often related to them. For example, it is generally more common for someone in finance to move to a financial management position than it is for someone in engineering to do so. Consequently, for desk audit purposes, in each major functional area, COs should identify the:

• Number of jobs by favored and nonfavored group members at and above the grades or levels where the participation of nonfavored group members declines; and
• Number of exempt jobs by favored and nonfavored group members below that level.

e. Comparison of Feeder Pool to Higher-Level Jobs. If clustering of members of one sex, race or ethnicity appears at lower grade levels, COs should try to determine whether:

• Nonfavored Group Members Hold Jobs with More Limited Advancement Potential. There are several areas of inquiry or questions that are useful for COs when examining limited advancement potential issues. For example, COs should seek to determine whether nonfavored group members are concentrated in functional areas that have fewer higher-graded jobs than those they hold. Are they underrepresented in functional areas with higher-graded jobs? If so, there may be a placement problem.
• Nonfavored Group Members Hold Jobs with Advancement Potential, but Do Not Advance at a Rate Comparable with their Peers. There are several areas of inquiry or questions that are useful for COs to pursue when examining this apparent disparity. For example, COs should seek to determine whether nonfavored groups are in functional areas that have a grade distribution comparable to that in other functional areas. If so, COs will need to investigate further to determine the reason why proportionally more nonfavored group members are in lower-graded jobs than their peers.

COs should also seek to determine whether the reason for the disparity is attributable to some legitimate nondiscriminatory factor such as developmental programs, performance appraisals, assignments or other factors that are related to promotions.

f. Disproportion or Disparity. As a general rule, COs should first examine the functional areas where there is the greatest disparity between the participation of nonfavored group members above the grade where nonfavored group member participation declines, as well as below the grade where nonfavored group member participation declines.