The claim Is that by constantly receiving the lowermost rating on the performance management scale, elder managers were methodically forced out of their employment.
Organizations establish performance management systems to meet three broad purposes: strategic, administrative, and developmental. Strategic purpose means effective performance management helps the organization achieve its business objectives. The administration purpose of a performance management system refers to the way In which organizations use the system to provide Information for day-t()- day decisions about salary, benefits, and recognition programs. Finally, performance management has a developmental purpose meaning that it serves as a basis for developing employees’ knowledge and skills” (None et al, 2011, up. 26-227).
Several large organizations have established and depended on performance management systems to sustain high functioning employees and disregard those who are low functioning or do not perform as anticipated. Such systems often include the use of rating or ranking levels in which each employee is positioned. These systems often use quotas to place a part of top performers at the peak level ND the worst performers at the bottom level. Such a system Is considered to eradicate those within the organization who constantly perform below par.
The system is able to work if employees are mindful of the standards for which they are graded In advance, so they can make the required modifications. It can also remove those Inside the organization who are either not appropriate for precise Jobs or simply lack the skills and abilities to execute their jobs efficiently (Myers, 2003).
Ford used an A, B, and C grading scale in the recently accepted Performance Management Process. Managers getting a C grade lost bonuses, pay raises, and faced conceivable termination, if a C was received two consecutive years.
The plaintiffs assert an unbalanced amount of older managers received a C rating (US Newswire, 2002). Disparate impact was the foundation of this particular law suit. Plaintiffs state Ford Motor Company senior management formulated a performance appraisal system in which one group of particular people were affected in a more negative manner than the others (Myers, 2003).
Disparate impact is a concept brought about in 1971, in the case of Grids v. Duke Power Company, explained in the Title VII of the Civil Rights Act 1964 (HRS Guide, 2012).
It disallows professional practices affecting employees that may not appear as deliberate actions of discrimination, but are discriminatory in operation. 1 OFF performance management systems can be misrepresented or abused. In many cases, large companies are simply trying to rid themselves of those not performing or those who show an unlikely ability to develop their performance over time.
Employees who are not productive can significantly increase the operational expenses and can even eave a damaging impact on employee morale and Job gratification, if others are obligated to work with such employees for a long time period.
Yet, even if performance management systems are implemented to grow efficiency, the potential outcomes and views of such a program should be measured prior to the program being completely established and executed. Even if upper management at Ford Motor Company didn’t aim to target older managers in employing the performance management program, the end result would have a similar effect of removing an unbalanced number of older managers. In essence, it is an employer’s failure to cover its bases that generates potential dilemmas”(Myers, 2003, p. 99). Bearing in mind the many groups that are affected prior to developing such a performance management system illustrates a concern for ethical business practice.
Subsequent procedures such as Allocation of Proof to support the Supreme Court’s burden of proof of necessity (HRS Guide, 2012) may meet legal guidelines, though not essentially ethical reflections.