Originally from Dispute Resolution Journal

Organizations have designed personnel management systems to assist in improving efficiency and establishing employee accountability. As part of these efforts performance appraisal systems have been designed in private and public organizations, and the resulting performance ratings have been used by management in making personnel decisions, t.g. promotions, layoffs, discharge, demotion, and wage determination. To demonstrate the popularity of their use in organizations. Table 1 presents the frequencies to which performance ratings are used in making certain personnel decisions. Since these decisions represent personnel practices which are often the basis for many arbitration cases,' performance ratings, their use under collective bargaining agreements, and the resulting interpretations by arbitrators have become an important subject in labor arbitration. Moreover, with many of the arbitration cases emerging from the public sector—that sector growing most rapidly in union membership—with psychological measurement techniques becoming more sophisticated, and with employment discrimination becoming the basis of many arbitration cases, this topic will continue to grow in importance. To demonstrate the significance of this subject this paper reviews selected arbitration decisions in key personnel areas wherein performance ratings were used in decisions and presents conclusions and recommended guidelines based on an analysis of these cases.