Make sure yourprocess includes clear-cut instructions and guidance for managers on how to link performance with compensation.
Reason: A new court decision says that giving employees a smaller-than-justified pay raise can count as an "adverse employment action," which serves as the basis for a job discrimination lawsuit.
In the case cited below, supervisors weren't given any written criteria to help them determine who should receive better evaluations and raises. Totally subjective evaluation criteria leave employees open to supervisors' possible prejudices. And it leaves your organization more vulnerable to liability for illegal discrimination.
Better approach: Draft written guidelines stating how supervisors should judge employees' strengths and weaknesses and how such evaluations correspond to pay raises. Provide rating systems or checklists, if possible. Base the guidelines on actual job criteria that are clearly outlined in job descriptions and employee-development goals. The outcome ofand salary reviews should never take employees by surprise.
Recent case: Corrections officer Thalia Gillis received a 3 percent raise after her supervisor rated her as "meeting" expectations. She felt she deserved an "exceeded" expectations rating, which would generate a 5 percent raise. She sued for race discrimination. (Gillis is black; her supervisor is white.)
To win a discrimination lawsuit, employees must show that they suffered an "adverse employment action," such as a firing, demotion or pay cut. The initial court ruling tossed out Gillis's case, saying that her raise didn't count as an adverse action.
But a federal appeals court disagreed and sent the case back for trial, saying a smaller-than-appropriate raise can count as an adverse action. "An evaluation that directly disentitles an employee to a raise of any significance is an adverse employment action under Title VII," the court said.
Although it gave no benchmark, the court hinted that denying a higher raise must have a significant effect on an employee's compensation to count as an adverse action. (Gillis v. Georgia Dept. of Corrections, No. 04-11014, 11th Cir., 2005)
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/222/smaller-raise-can-count-as-adverse-action-that-triggers-lawsuit "
- Delegating Wage-Setting Discretion to Branches Won't Justify a Class-Action Lawsuit
- No requirement to break up love triangles--but be prepared for workplace violence
- When litigious employee continues to threaten retaliation suit
- Bias against applicants who never apply? Ruling in case involving criminal background checks
- Illinois Unemployment Insurance Act