Workplace justice: As 'peer review' tribunals increase, so does controversy

THE BALTIMORE SUN

An American worker who feels wrongly treated by a boss is usually given little recourse but to complain to the boss' boss -- an option that breeds frustration and mistrust, says Harvey Caras.

So Mr. Caras, a genial 45-year-old Columbia-based corporate consultant, is spearheading what some describe as a revolution in workplace justice.

In the last decade, Mr. Caras has sold 334 companies -- ranging from corporate giants like Marriott International Inc. to local employers such as Baltimore's Franklin Square Hospital -- a program he developed that sends worker grievances to juries made up mostly of the workers' peers.

Thanks to the man known in corporate circles as "the guru of peer review," employees at General Electric Co. plants, Taco Bell restaurants and even the municipal offices of Rocky Mount, N.C., hold informal trials and make binding decisions on the appropriateness of reprimands, demotions or even firings.

And that's an improvement over the past, say employees who have participated in the minitrials.

JoAnn Gilbert, a supervisor of food services at Franklin Square Hospital who has defended her actions before panels and served as a panelist, said reviewers in each case worked very hard to give the complaining worker a fair hearing.

When she served as a juror, her panel spent several days interviewing workers and managers to investigate a firing. That convinced her that if she ever felt wronged, she would want her case to go to a peer review panel.

"I think anyone who goes to this committee has an extremely fair chance," she said,

But the Caras & Associates program is growing in controversy even as it is growing in popularity.

Even as unions struggle to rebound from membership losses that have driven their share of the private work force to a 50-year low of only 11.2 percent, Mr. Caras is persuading companies to provide grievance resolution -- a service normally performed by unions.

Union organizers attack Mr. Caras' peer review system as a union-busting technique. They say it is a sham that gives workers only the appearance of fair treatment.

But labor historians say Mr. Caras is simply the latest in a 70-year

history of corporate reformers who have helped change the workplace by appealing to managerial paternalism as well as a corporate desire to keep out unions.

"The notion that corporations ought to do what unions do goes back a long time," and the companies that treat their employees well tend not to be unionized, notes David Lipsky, dean of the New York State School of Industrial and Labor Relations.

That makes programs like Mr. Caras' a mixed bag for workers, Dr. Lipsky says.

Corporate policies can be changed by management unilaterally, and thus offer workers less protection than union contracts, he said. But since only about one in eight American workers receives union protection, such programs can improve workplace justice, he said.

"I would prefer to have some protection rather than none."

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Mr. Caras developed the idea of worker trials in 1981. He had just been handed the job of turning around labor relations at the General Electric range plant in Columbia, which had fought off nine union organizing drives in the previous decade.

The relationship between the workers and managers was so poisonous that when the company handed out T-shirts reading "GE is me" as a goodwill gesture, many of the workers taped over the last two words and wrote an obscenity, Mr. Caras recalled.

So he started meeting with workers and sought to address their complaints.

One of his first moves was gathering a group of workers to advise in creating an alternative to the "open door" policy of handling grievances.

At the GE plant, like most nonunion corporate workplaces, workers with grievances were told to walk through executives' "open doors" and ask them to overrule lower-level decisions.

But at GE, Mr. Caras found, most workers felt "the open door led to the parking lot" and believed that managers would always stick together.

So he and the workers decided to let the workers rule on grievances. Workers would still have to try to settle their grievances informally. But panels of five specially trained employees -- three at the same level as the person with a complaint and two managers -- would form a court of last resort.

Mr. Caras ended up training several hundred GE workers to serve as panelists to make sure the pool of jurors was representative of the plant's work force.

Whenever someone wanted to take a complaint to a panel, the worker would randomly draw 10 names -- six co-workers and four managers -- and then select half of each group.

The worker could bring another worker to help represent him or her, and the panelists could call any worker or manager to testify at a private hearing.

The panel could only rule on the fair application of company policy -- not make new policy -- but its decision was final.

While that finality was key to its success with workers, it was also the biggest sticking point for his fellow managers. Mr. Caras remembered one fellow manager accusing him of "letting the inmates run the asylum."

But as workers saw that the panels' oversight pushed managers to make more careful decisions, and managers saw workers often endorsing painful disciplinary actions, the program became popular.

It was so popular that Mr. Caras quit GE in 1985 to start marketing the program to other companies. The GE plant closed four years later as part of a consolidation plan.

He has some competitors now, but Caras & Associates is the largest specialist in peer review in the country. Today, eight of Mr. Caras' 12 employees sell and help set up peer review systems. They typically give a one-day training course on how to be a good panelist to about 15 percent of a client's workers. So far, Mr. Caras said, he and his associates have trained 20,000 workers and managers.

As he travels throughout the United States and Mexico to train workers and managers to set up peer review systems, Mr. Caras says: "I am having a ball."

And his clients save money, he says. He charges between $10,000 and $50,000 to set up a program, and recommends refresher courses every few years.

Mr. Caras said that a survey of his clients showed their employment discrimination lawsuits dropped in half.

And some clients report even more dramatic results. At Bethesda-based Marriott, which has installed peer review in about 90 hotels across the country so far, managers found that hotels with the system had 83 percent fewer workplace discrimination charges last year than those without it.

"This is a good system," said Marriott spokesman Nick Hill. "It works well."

Although the peer review system was born out of a labor dispute, and is often adopted by companies fighting off union drives, Mr. Caras insists, "I am not a union-buster kind of guy."

"If the employees unionize, management deserves it. Employees have to have justice," Mr. Caras said.

Noting that some unionized companies have also adopted peer review, Mr. Caras said he believes his program can be an improvement in any workplace.

"This system is better than what unions provide," which is typically a legalistic hearing by an arbitrator.

Such grievance panels improve conditions for workers everywhere by giving them more power over their working lives, he said.

"Companies are using peer review as a steppingstone to giving more and more empowerment to workers. This is a movement in the right direction," Mr. Caras said.

Perhaps. But not everyone at Mr. Caras' client companies would agree.

PECO Energy Co. was one such example. It started installing peer review in 1992, as the International Brotherhood of Electrical Workers was attempting to organize hourly workers at the Philadelphia-based utility.

Peer review was part of a campaign to erase workers' simmering mistrust of managers, says Patrick Grossi, PECO's manager of labor relations.

And it was one of the keys to the union defeat, he said. "I rank it high as one of the items that assisted in letting our employees know that they could trust management," he said.

Mr. Grossi said the program faced some internal opposition, including criticism from one manager who saw his disciplinary action overturned by a panel.

"It has been a stretch for us," Mr. Grossi said.

But that case was the only one -- out of about 60 reviews held so far -- in which the panels directly contradicted management, he said. In only about 10 percent of the cases have the panels even modified a management order, he said.

That's slightly above average for the program nationwide, Mr. Caras said. His surveys show panels affirm management decisions in 82 percent of the cases, slightly more often even than executives affirm similar grievance decisions under the "open door" policy.

And that's exactly why someworkers familiar with the system don't like peer review.

A 34-year veteran of PECO, who asked not to be named to protect his job, said "there's not a lot of faith" in peer review because workers are afraid managers on the panel, though a minority, still control the outcome.

Since the vast majority of panels confirm management decisions, many workers believe the panels are "a stacked deck," he said.

The panelists are chosen from only those who received Mr. Caras' eight-hour training course, and are suspected of being management favorites, he said. "You can't pick anybody you want."

And the panels can only address a few things; they can't change unfair policies or performance evaluations, for example, he said.

Union officials are equally critical.

Nunzio Petite, an IBEW organizer in Philadelphia, considers peer review "a sop to give the uneducated" workers an illusion of workplace equity.

In the grievance procedure the IBEW has used at other utilities, workers with grievances get fairer treatment because they receive legal representation and go to independent arbitrators, he said.

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For many managers, the high confirmation rate is evidence that the worker panels are a responsible way to handle grievances.

John Hoey, vice president of human resources and quality for Baltimore-based Cadmus Journal Services, formerly known as Waverly Press, said his company has seen a high confirmation rate in the five years it's been sending grievances to its "problem review teams."

"Everyone likes to puff out their chests" and say the panel's agreement shows that managers make good decisions most of the time, Mr. Hoey said.

But for Mr. Hoey, it just proves "there is no difference in brain power or judgment between someone in management or someone running a printing press. If they use their best judgment, they are going to reach the same decision."

And it shows, he said, that many worker grievances aren't well-founded.

For many managers, the peer review system is simply part of a drive to improve working conditions and get employees more involved in decision making.

Doug Douglas installed the system at Franklin Square Hospital four years ago. There was no union pressure, and the hospital never had trouble with lawsuits by disgruntled employees, he said.

"Our experience has been 100 percent positive," Mr. Douglas said.

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