Module 3 potential legal risk
After reviewing the reading material for the week, do the following:1.Pick one subject area that is a potential legal risk of performance management and the relevant employment law that regulates actions/behaviors pertaining to the risk that may be relevant to your current organization or future one in your career. Some examples (you may select others) of subject areas could include disparate treatment or impact, retaliation, knowledge of protected classes, defamation charges, vague or discriminatory adjectives in performance criteria, negligent retention of employees, lack of knowledge of the Americans with Disabilities Act, the Age Discrimination in Employment Act, or the Family Medical Leave Act among others.
2.Provide a brief explanation about why this area is important to you and one measure you suggest organizations may take to mitigate the legal risks in performance management. Be sure to distinguish the law or regulation that is of risk.
Please use numbers and topic headings to distinguish your answers.
Legal Risk: Discrimination, Discrimination based on age, Retaliation, Negligence
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A potential risk of performance management might be the lack of training for managers on howto evaluate and apply the yearly merit increase. I asked my own manager, the one who does mymerit increase, about training and performance appraisal. I asked him, “As manager do youreceive training on how to do performance appraisal? How often do you receive that training?Does the HR team tell you to be objective in evaluation or something similar that will help youavoid legal risk?” The reason I asked him these questions is that I have noticed when someonebecomes a manager, they do not necessarily receive training on how to become a manager, butit’s left to the director to help people. And I have noticed that directors are very busy andusually intervene when they have issues or when managers have questions. So, most managerslearn through experience or by observing other managers. My manager’s reply to thesequestions was that he has not received training in 30 years. He never received any type oftraining, and that performance appraisal is just up to him. I then asked him if he receivedtraining maybe at the beginning of his career as a manager, when he had to do his firstperformance appraisal and merit increase. He replied was that he did not receive training at all,not even his first time. He added that he never received instructions on how to do the meritincrease.
The only thing he received in the past (not anymore) was a phone call from the HRteam asking him if he gave someone a slightly higher percentage in the merit increase. But headded that now everything is done through the information technology system, and it has beenso automated and restricted that there is not much wiggle room. Then he continued to say thatit is just a cost-of-living increase. Merit cannot truly factor in, because the percentages are sonarrow that a person cannot reward anyone without completely sticking it to someone else. If he has more than a handful of employees, he might be able to have something resembling“merit based,” but with so few dollars as based on a “merit percentage adjustment”, it is just anexercise in frustration. Then he concluded by saying that in his opinion, it is merit based in nameonly. According to the online version of the compensation guideline for managers in the internalemployee SharePoint system, it states that, “Annual merit increase budget percentages areapproved by the Human Resource Committee (HRC) based upon market trends and marketindices. Employee merit increases are based on employee performance and position within thesalary range. Pay increases should be distributed thoughtfully, with top performers receivinglarger merit increases.” (Intellectual Reserve, 2018).
According to this statement, the meritincrease should not be based only on position within the salary range, but also on employeeperformance. But according to a manager in the organization, this statement is not true becausethe amount of money forces to just give an increase mainly for the cost of living.The first aspect that is worrisome is the lack of training. This brings each manager to actindependently and to interpret the merit increase policies and guidelines in different ways. Thisis not a safeguard against legal problems. According to Grote (2008), “training participants willhelp to ensure that the mechanisms of the process as designed are the mechanisms that areactually used. Not only will the rankers be more qualified to make their assessments, but theprocedures followed in session A will closely replicate those followed in B and C and D. Thisconsistency will demonstrate that individuals were all evaluated on a level playing field.” (p. 18)Because there is a lack of training, managers’ merit increase interpretation can be subjective, orthe evaluation cannot be completely accurate, and this might lead some employees to see issuewith The Civil Rights Act of 1964 (Title VII), especially in discrimination, because it is illegal todiscriminate in any aspect of employment, including hiring and firing, compensation, leave,promotion…” (Plump, 2010, p.608).
On top of this claim, if the employee is at least 40 years old, he or she might also “claim that theevaluation is a subterfuge for discrimination based on age in violation of the Age Discriminationin Employment Act (“ADEA”). (Bogaert, 2006). A manager’s performance evaluation can besubjective, and therefore negative in the eyes of an employee, which might then affect themonetary compensation of the merit increase. This is when employees can use, under Title VIIof the Civil Right Act, the claim of retaliation. “Retaliation in a performance evaluation contexttypically occurs when a supervisor gives a negative performance to “get even” with anemployee for a reason unrelated to job performance.” (Bogaert, 2006). As we see, the lack oftraining can have a strong negative impact on the organization. Although the performanceappraisal and merit increase were done by a manager, the organization“is subject to vicariousliability to a victimized employee for an actionable hostile environment created by a supervisorwith immediate (or successively higher) authority over the employee” (6th Cir., 2000).
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