Possible Illegal Discrimination at Tractors, Inc.

Tractors. Inc. is a family-owned heavy equipment (e.g.. exca-vators, tractors, paving equipment) company that has been in business for more than 25 years. Over the past several years, the company has experienced rapid growth, increasing from 100 employees to 500 employees. Tractors, Inc., is beginning to realize that it needs to change or enhance its current performance management system. The company still uses the performance management system it implemented more than 10 years ago.

The current performance management system consists of the following documented process:

- Performance reviews are to be conducted on a yearly basis (at the time of the employee's anniversary date with the company). One month prior to the employee's anniversary date, the supervisor/manager is to com-plete the standard performance appraisal form and pay increase form (if applicable), which should then be reviewed by the supervisor's manager prior to the supervisor's meeting with the employee. There are no set guidelines about how to complete the form or rate the employee's actual job performance-this is left to the reviewing supervisor's discretion.

- Once approvals have been secured. the supervisor schedules a formal meeting with the employee to discuss the appraisal.

- During the meeting, the manager reviews the ratings with the employee, including any comments that the manager may have made, discusses opportunities for improvement and development, and informs the employee about his or her change in pay (if applicable). At that time. the employee is given the opportunity to add any comments and sign the form for official submittal to the human resources department. The company's unwritten policy is that employees are not permitted to keep copies of their performance reviews; however, they can go to the human resources department at any time to request permission to review their past performance appraisals. Employee performance reviews are kept on file in the human resources department during the employee's tenure at the organization.

In recent months, the company has received several complaints from female employees regarding the performance management system.

Examples include the following:

- The emplwee does not have the opportunity to provide input into her performance evaluation prior to the actual meeting.

- Managers do not complete performance reviews in a timely manner. For instance, several employees have complained that they received their reviews three to six months after their actual anniversary dates.

- Two female employees have complained that they were passed up for promotions for reasons other than performance issues. One employee cited the example of her rating in the "attendance" category as follows: "Overall Sue's attendance is acceptable and she works the hours necessary to complete her job; however, if she were to make better arrangements for handling her children's after-school activities, she would be available to work longer hours." Sue felt that, because she is a single mother, men in her department with less experience and job knowledge are promoted because they either do not have families or have stay-at-home wives to take care of their children.

Consider Tractors, Inc.'s performance management system in light of what we have discussed as an ideal system and how a company can ensure that its system is legally sound. As the new human resources manager. you have been asked to identify those areas of the current performance management system that could face a legal challenge. Please develop a one-page summation, identifying the potentially illegal aspects of the current system and your suggestions for making the current system more legally sound.