To the Commission's knowledge, no systematic analysis of how employee records affect employment decisions has ever been made. After an extensive survey of the literature, one writer characterized employment decision making as a "black box" problem: an individual can find out what information was available, and can know the outcome, but he may not know what decision processes produced the outcome.6 Nevertheless, a few general observations can be made.
In the first place, there are certain key decision-making points in the employment cycle: selection, placement, transfer, promotion, demotion, training, discipline, and separation. Second, there are great differences in how employee records are used in different industries. Different categories of employees, such as unionized and nonunionized workers, are affected differently by the records an employer keeps about them. For example, industries which recruit unskilled workers and train them to perform technologically advanced functions are likely to rely heavily on testing. Management and scientific and technical employees in any company are more likely than unskilled workers to be hired or promoted on the basis of colleagues' evaluations. Where there is a union contract, its terms frequently set criteria for making economically significant decisions about employees and, in such cases, reliance on records, both to make and to justify decisions, is common.
Unlike decisions based on insurance, credit, or medical records, however, the crucial employment decisions do not flow as a matter of course from recorded information, and thus it is virtually impossible to say for sure that an adverse decision was based on a record. In some cases, the records of several people are compared in arriving at decisions about applicants or employees, so that an employee's record standing alone cannot show why certain decisions were made about him. Moreover, there are occasions when the possibility of having to make a particular decision generates the keeping of a record, as when an employee's aberrant behavior is documented in order to justify an adverse decision about him. 7