Differential validity is seen as a biased prediction of job success against minority subgroups of a population. For example, many people believe that aptitude tests are unfair to women and other minorities. In essence differential validity is the difference between the validity coefficients that exists between two groups.
An employment test taken by two groups is bound to result in different correlation coefficients. However according to this concept, the magnitude of difference is greater when the test is taken by a majority and minority group.
For instance an aptitude exam taken by White Americans may result in a correlation of coefficient of 0.59, whereas the same exam taken by Hispanics may results in a coefficient of 0.40. This difference in validity coefficients shows that the test was more biased towards the White Americans.
Discrimination is a huge issue in organizations and should be avoided as much as possible. Therefore employment aptitude tests must be piloted among all subgroups to ensure validity of the exam and hence mitigation of minority discrimination.