Topic 4.2: Evaluation and Regulation of Job Performance
Nothing is more important to the employee than the opportunity to earn a raise, a promotion, or simply to retain a job. For the employer, the goal is to retain and to promote the right employee for a specific job. Generally, the employer and the employees look to the performance appraisal (PA) as a guide to their individual goals. Therefore, PAs must be designed to determine exactly what they set out to test.
PAs have the potential for a discriminatory effect both in the way they are used and how they are administered. To avoid a discriminatory effect, some employers use a variety of mechanisms to conduct a performance evaluation. The different types include:
· management by objective, in which the employee and the manager set goals for the employee and then measure the employee’s performance against those goals
· checklist system, in which the employee’s performance is judged against a list of factors
· summated scale, in which the manager evaluates how often the employee satisfies each of a number of behavior-based statement
There are legal implications to PAs. They are subject to scrutiny because there is a potential for bias.
Disparate impact, disparate treatment, and defamation are all possible in PAs. If an employer makes known to the world the results of an evaluation, it may be subject to a claim of defamation when:
· the employer states false and defamatory words concerning the employee
· the employer negligently or intentionally communicates these statements to a third party without the employee’s consent, thereby subjecting the employee to harm or loss of reputation
Note that truth is a complete defense to a defamation charge.
Regulation of Work
Although it is impossible for the employer to identify everything that is prohibited or allowed in the workplace, a clear policy regarding the intent or mission from the employer is important. Some rules may be considered to be understood, but it is wise to obtain a written confirmation from employees of that understanding.
A good example of this is the company drug policy. Although it is clearly understood that drug use is not to be tolerated on the job, the employer may still want to put the policy in writing and have the employees sign forms indicating they have read the policy. The statement allows the employer to make clear its antidrug attitude and present the penalties for a violation.
Insubordination
When an employee is insubordinate, the employee either defies or ignores orders given by the employer. To avoid an inconsistent application of discipline resulting from insubordination, an employer should identify situations considered to be insubordination and require corroboration by another supervisor.
Discipline
All disciplinary decisions must be nondiscriminatorily applied and objectively administered. To be fair, the system should provide specific guidelines and communicate this information to employees.
Any action taken should be factually and completely documented by the employer. This ensures that the employee receives adequate feedback, and lawsuits will not hinge on the memory of individuals.
Documentation of discipline, appraisals, warnings, and commendations should be retained in each employee’;s file and be given to the employees to provide them with the opportunity to appeal.
Review Questions
1. Aronson evaluates the performance of her employees, but she refuses to provide any feedback under the theory that the less she says, the lower the likelihood of liability under Title VII. Is she right?
2. How can an employment evaluation result in disparate impact discrimination?
3. Insubordination problems can be minimized by:
a. severely disciplining employees suspected of insubordination.
b. using the Uniform Employment Selection Procedures.
c. implementing the decision from Albermarle Paper Co. v. Moody.
d. clearly identifying behaviors considered to be insubordination and requiring documentation of the occurrences.
Topic 4.3: Fair Labor Standards
The Fair Labor Standards Act (FLSA) requires the payment of a minimum wage for workers and sets standards under which covered employees may work. It also sets the rate at which they must be paid if they work over a certain period of time during a week and it prohibits pay differentials based solely on gender.
The purpose of the minimum wage laws is to ensure that all workers—especially those at the lower end of the pay scale—maintain at least a minimum standard of living that keeps them from poverty. (Minimum wage is actually below the poverty line, however, so we still have not legislated a living wage.)
General Provisions
The FLSA is administered by the Department of Labor’s Wage and Hour Division, which has the authority to investigate, gather information, issue regulations, and enforce provisions of the act. Many states also have wage and hour provisions administered by comparable state agencies.
In addition to regulating child labor, wages, and hours, FLSA also requires employers to keep records on wages and hours, although there is no particular form in which such records must be kept.
FLSA contains antiretaliation provisions to protect employees who file a complaint or participate in a FLSA proceeding. If FLSA is violated by the employer underpaying employees, employees may recover back wages. There is two-year statute of limitations, which stretches to three years for willful violations.
Who is Covered
Two types of coverage are available in FLSA—individual coverage and enterprise coverage. An individual employee’s job is covered if it involves interstate commerce directly (such as a truck driver traveling from state to state) or moving or preparing goods for interstate commerce, including phoning and using the mail.
Enterprise coverage applies to all employees of a business if the business is engaged in interstate commerce or producing goods for interstate commerce and meets a minimum gross annual income requirement. Retailers or service businesses must have annual income of at least $362,500; other businesses must have an income of $250,000 or more.
FLSA covers federal employees; however, state and local employees are covered under FLSA’s child labor and equal pay provisions only if the service being conducted is a traditional government activity, such as law enforcement and fire protection or education. But most states have their own wage and hour laws that can apply to state and local government employees.
Minimum Wages
After World War II, the minimum wage law was established to avoid another depression by attempting to provide everyone with enough money on which to live without causing an economic harm to business owners. Employers are required to pay covered employees a certain minimum hourly wage. Since 1997, the minimum wage has been $5.15 per hour. In 1938 when FLSA was enacted, it was 25 cents per hour.
Covered employees working over 40 hours per week are entitled to overtime pay of at least time and a half. Wage rates may be lower if industry wage orders make them so in Puerto Rico, the Virgin Island, or American Samoa. If the covered employee is an apprentice, learner, or disabled worker, then under certain circumstances, they may receive less than the minimum wage if the employer obtains a certificate issued by the Department of Labor’s wage and hour administrator.
At least 41 states have statutes that provide coverage for employees exempted under FLSA, with 16 setting limits above those of the federal law.
Note that under FLSA, some employees are exempt from the overtime provision but not the minimum wage provisions. Because of their salaries are generally higher, however, this does not present a problem (for instance, executives or teachers). The following are exemptions from both the wage and overtime provisions:
· outside sales people, executives, administrative, and professional employees, including teachers and academic administrative employees in elementary and secondary schools
· employees of certain individually owned and operated small retail or service establishments not part of a covered enterprise
· employees of certain seasonal amusement recreational establishments, messengers, full-time students, employees of certain newspapers, switchboard operators of small telephone companies, seamen employed on foreign vessels engaged in fishing operations
· farm workers employed by anyone who uses more than 500 person-days of farm labor in any calendar quarter of the preceding calendar year
· casual babysitters and companions to the elderly
Maximum Hours
FLSA does not limit the hours employees >work, but rather sets the standards for the hours constituting a normal work week for wage purposes. The states then set wage rates for hours worked over and above the normal week.
Child Labor Laws
The FLSA sets minimum age standards for allowing children to work. Most children cannot work before age 16, and 18 is the minimum age for jobs deemed hazardous by the Department of Labor. Children between the ages of 14 and 16 may work at certain types of jobs that do not interfere with their health, education, or well being, such as the traditional newspaper deliverer. Certain agricultural work is permitted also.
Ask Yourself
Review Questions
1. What is the rule regarding maximum hours and overtime?
2. Explain the child labor law and its exceptions.
3. True or false: The FLSA applies to individuals, but not to an enterprise as a whole.
4. To counteract high unemployment rates among certain groups:
a. an employer is free to disregard minimum wage laws.
b. employers pay unemployment insurance.
c. the FLSA requires employers to engage in affirmative action hiring with respect to race, gender, religion, national origin, and color.
d. the FLSA allows employers to pay a training wage
