Do Business Well

“Employees now feel they can get a square deal,” says William Blake. “Before, they felt the deck was stacked against them.” What has made the difference at the Borg-Warner plant in Bellwood, IL, where Blake was human resources manager before his retirement, is a peer review system for handling employee grievances.

Under this system, a disgruntled employee takes a complaint to a panel composed of other employees plus members of management. The panels are usually made up of three to six people, with the peers always in the majority. A complainant may bring a fellow employee or someone from personnel to help at a hearing, but not an outside attorney. After listening to the employee and his or her supervisor, the panel votes by secret ballot, and its decision is binding.

Employee members of the panel are chosen at random, by the complainant, from a pool of volunteers who usually receive a full day’s training before joining the pool. At Borg-Warner, 70 out of the 1,200 employees at the site have been trained. Independent consultant Harvey S. Caras, who sets up peer group systems within companies, says that training includes “how the system works, what questions panel members should or should not ask, listening skills, legal considerations such as the right to privacy, and how to deal with feedback in the plant.”

Caras, who is credited with having formalized the peer review procedures when he was employee relations manager for General Electric’s appliance plant in Columbia, MD, says each company determines what power its panel will have. But usually the panel cannot change rates of pay, benefit plans or work rules. Panels typically handle such cases as discipline, suspension or termination, or performance appraisal. The role of the panel is essentially to evaluate a decision and determine whether or not it was fair.

The Practice Is Spreading

Peer review was instituted at Honda of America in Marysville, OH. It helps employees understand that management decisions are well- founded and not issued “just because a manager woke up on the wrong side of the bed that morning,” says an employee relations coordinator who has worked with the method.

At Honda, where peer review is used only to adjudicate cases of separation or termination, any employee who works in production, has at least one year of service with the company, and has not needed any management counseling within the preceding 12 months is eligible to serve on the panel.

The coordinator says peer review gives employees a better understanding of what management does and also ensures that management doesn’t “jump the gun” when deciding to terminate an employee. He stresses, however, that “when a person violates a company policy and it is a separation-of-employment offense, we don’t base our decision on whether or not we’d win” in front of a panel.

A much broader employee spectrum is involved in peer review at Public Service of New Mexico, in Albuquerque: office, professional, and technical people, everyone from senior-level engineers down to entry-level clerical people. Panels handle “anything that doesn’t set policy,” says Randy Helton, former manager of human resources programs. In one case, an employee who was dissatisfied with her performance appraisal went to peer group review, which ruled in her favor.

An Important Benefit

Helton says peer review was instituted when there were heavy layoffs because of a “general contraction of our overall business,” and management wanted to give people a chance to appeal if they were laid off. Very few cases have actually come before the panels, he says, because “no one likes the publicity and so there is an impetus for people to take care of their problems themselves.” That is actually one of the major benefits of having the program set firmly in place.

More and more companies are installing the peer review system. Caras has installed nearly 40 programs, including several at General Electric and Borg-Warner locations and a Michelin Tire facility in Canada. He says it is possible that there are as many as 100 programs in place because a number of companies have proceeded to set up programs on their own.

Doing It Right

Borg-Warner’s Blake, who says, “I haven’t seen a drawback yet,” to the system, cautions against trying to do it on your own. As enthusiastic as managers are about peer review, they all stress that it will work only if it is properly set up and then taken seriously by management. Abuses of the system must always be avoided.

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