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Abstract Researchers have investigated whether machine learning (ML) may be able to resolve one of the most fundamental concerns in personnel selection, which is by helping reduce the subgroup differences (and resulting adverse impact) by race and gender in selection procedure scores. This article presents three such investigations. The findings show that the growing practice of making statistical adjustments to (nonlinear) ML algorithms to reduce subgroup differences must create predictive bias (differential prediction) as a mathematical certainty. This may reduce validity and inadvertently penalize high‐scoring racial minorities. Similarly, one approach that adjusts the ML input data only slightly reduces the subgroup differences but at the cost of slightly reduced model accuracy. Other emerging tactics involve weighting predictors to balance or find a compromise between the competing goals of reducing subgroup differences while maintaining validity, but they have been limited to two outcomes. The third investigation extends this to three outcomes (e.g., validity, subgroup differences, and cost) and presents an online tool. Collectively, the studies in this article illustrate that ML is unlikely to be able to resolve the issue of adverse impact, but it may assist in finding incremental improvements. 

A key challenge facing the use of machine learning (ML) in organizational selection settings (e.g., the processing of loan or job applications) is the potential bias against (racial and gender) minorities. To address this challenge, a rich literature of Fairness-Aware ML (FAML) algorithms has emerged, attempting to ameliorate biases while maintaining the predictive accuracy of ML algorithms. Almost all existing FAML algorithms define their optimization goals according to a selection task, meaning that ML outputs are assumed to be the final selection outcome. In practice, though, ML outputs are rarely used as-is. In personnel selection, for example, ML often serves a support role to human resource managers, allowing them to more easily exclude unqualified applicants. This effectively assigns to ML a screening rather than a selection task. It might be tempting to treat selection and screening as two variations of the same task that differ only quantitatively on the admission rate. This paper, however, reveals a qualitative difference between the two in terms of fairness. Specifically, we demonstrate through conceptual development and mathematical analysis that miscategorizing a screening task as a selection one could not only degrade final selection quality but also result in fairness problems such as selection biases within the minority group. After validating our findings with experimental studies on simulated and real-world data, we discuss several business and policy implications, highlighting the need for firms and policymakers to properly categorize the task assigned to ML in assessing and correcting algorithmic biases.