World Bank: Status of Grievance Process Reform (Letter Report, 05/13/99,
GAO/NSIAD-99-96).

Pursuant to a congressional request, GAO provided information on the
World Bank's efforts to reform its employee grievance process, focusing
on: (1) the Grievance Process Review Committee's principal findings and
recommendations to make the system more fair and credible and steps the
Bank plans to take to implement these recommendations; and (2) key
issues that Bank management will face as it moves to implement these
recommendations.

GAO noted that: (1) the Review Committee found that the Bank's grievance
system over emphasized formal, adversarial approaches to dispute
resolution; lacked sufficient independence from management influence;
did not adequately protect grievants' rights or hold managers
accountable for complying with Bank rules regarding appropriate
treatment of subordinates; and was not readily accessible to employees
located away from the Bank's Washington D.C., headquarters; (2) the
Review Committee also concluded that individuals charged with
implementing certain responsibilities within the system lacked necessary
expertise; (3) the Review Committee prepared a plan of action, accepted
by management in February 1999 and endorsed by the Board of Executive
Directors' Personnel Committee, that is designed to improve the system's
effectiveness and credibility; (4) based on GAO's review of the plan and
other alternatives considered by the Committee, GAO notes that the
measures recommended by the Committee refine and enhance but do not
fundamentally alter the Bank's grievance system; (5) among other things,
the plan includes steps to: (a) strengthen the system's provisions for
informal dispute resolution; (b) hire additional staff with skill in
relevant areas like discrimination and employment law; (c) increase the
system's independence; (d) strengthen procedural safeguards for
grievants; (e) hold managers accountable for complying with Bank rules
regarding appropriate treatment of subordinates; and (f) expand access
for field-based employees; (6) the Review Committee also recommended
creating a Conflict Resolution Network composed of Bank units with
relevant responsibilities to provide a focal point for sustaining the
Bank's commitment to ensuring that the new system functions as intended;
(7) the Network will report to the Office of the Bank's President; (8)
the Committee decided against recommending more far-reaching changes,
such as providing for independent arbitration of grievances, at this
time; (9) the Review Committee identified a number of significant
procedural and operational issues for others to address as
implementation proceeds; (10) the Bank must develop guidelines and
regulations in several areas, train its staff to properly carry out
their new responsibilities, and create a meaningful system for
monitoring the system's performance and recommending additional
refinements as necessary; and (11) as the Bank has just begun
implementing the Committee's recommendations, it is too early to assess
their actual impact on the manner in which employee grievances are
addressed.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-99-96
     TITLE:  World Bank: Status of Grievance Process Reform
      DATE:  05/13/99
   SUBJECT:  International organizations
	     Dispute settlement
	     Administrative remedies
	     Employment discrimination
	     Fair employment programs
	     Personnel management
	     Performance measures
	     Accountability
	     Human resources utilization
IDENTIFIER:  World Bank Employee Grievance Process

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NS99096 GAO United States General Accounting Office

Report to Congressional Committees

May 1999 WORLD BANK Status of Grievance Process Reform

GAO/NSIAD-99-96

  GAO/NSIAD-99-96

United States General Accounting Office Washington, D. C. 20548
Lett er

Page 1 GAO/NSIAD-99-96 World Bank Grievance Procedure

GAO

National Security and International Affairs Division Lett er

B-282152 Letter May 13, 1999 The Honorable Mitch McConnell
Chairman The Honorable Patrick Leahy Ranking Minority Member
Subcommittee on Foreign Operations Committee on Appropriations
United States Senate

The Honorable Sonny Callahan Chairman The Honorable Nancy Pelosi
Ranking Minority Member Subcommittee on Foreign Operations, Export
Financing

and Related Programs House of Representatives

In June 1998, in response to concerns about the fairness of its
employee grievance process and as part of a broader effort to
reform its human resource policies, the World Bank appointed an
internal Grievance Process Review Committee. 1 The Review
Committee was charged with examining the Bank's grievance system
and recommending changes to make the system more fair and
credible. The Committee undertook a broad examination of the
Bank's existing system and possible alternatives.

In response to a requirement in the Omnibus Consolidated and
Emergency Supplemental Appropriations Act, 1999, 2 this report
analyzes (1) the Review Committee's principal findings and
recommendations and steps the Bank plans to take to implement
these recommendations and (2) key issues that Bank management will
face as it moves to implement these

recommendations. As an agency of the U. S. government, we have no
authority to directly review World Bank operations. However,
through the Department of the 1 This report uses the terms World
Bank and Bank to refer to the World Bank Group of institutions.
The World Bank Group is made up of the original World Bank the
International Bank for

Reconstruction and Development as well as the International
Development Association, the International Finance Corporation,
the Multilateral Investment Guarantee Agency, and the
International Center for Settlement of Investment Disputes. These
institutions share a single grievance system.

2 Pub. L. No. 105- 277, 112 Stat. 2681- 167 (Oct. 21, 1998).

B-282152 Page 2 GAO/NSIAD-99-96 World Bank Grievance Procedure

Treasury and the U. S. member of the Bank's Board of Executive
Directors, we obtained access to Bank staff and documents
sufficient to complete our report.

Results in Brief The Review Committee found that the Bank's
grievance system over emphasized formal, adversarial approaches to
dispute resolution; lacked sufficient independence from management
influence; did not adequately protect grievants' rights or hold
managers accountable for complying with Bank rules regarding
appropriate treatment of subordinates; and was not

readily accessible to employees located away from the Bank's
Washington, D. C., headquarters. The Review Committee also
concluded that individuals charged with implementing certain
responsibilities within the system lacked necessary expertise.

The Review Committee prepared a plan of action, accepted by
management in February 1999 and endorsed by the Board of Executive
Directors' Personnel Committee, that is designed to improve the
system's effectiveness and credibility. Based on our review of the
plan and other

alternatives considered by the Committee, we note that the
measures recommended by the Committee refine and enhance but do
not fundamentally alter the Bank's grievance system. Among other
things, the plan includes steps to (1) strengthen the system's
provisions for informal dispute resolution, (2) hire additional
staff with skill in relevant areas like discrimination and
employment law, (3) increase the system's independence, (4)
strengthen procedural safeguards for grievants, (5) hold

managers accountable for complying with Bank rules regarding
appropriate treatment of subordinates, and (6) expand access for
field- based employees. The Review Committee also recommended
creating a Conflict Resolution Network composed of Bank units with
relevant responsibilities to provide a focal point for sustaining
the Bank's commitment to insuring that the new system functions as
intended. The

Network will report to the Office of the Bank's President. The
Committee decided against recommending more far- reaching changes,
such as providing for independent arbitration of grievances, at
this time. The Review Committee identified a number of significant
procedural and operational issues for others to address as
implementation proceeds. The Bank must develop guidelines and
regulations in several areas, train its staff to properly carry
out their new responsibilities, and create a meaningful system for
monitoring the system's performance and recommending additional
refinements as necessary. As the Bank has just

B-282152 Page 3 GAO/NSIAD-99-96 World Bank Grievance Procedure

begun implementing the Committee's recommendations, it is too
early to assess their actual impact on the manner in which
employee grievances are addressed. As the reforms are implemented,
the performance of the Office of the President in supporting the
new system's independence and

authority will be a key factor in determining success in creating
a fairer and more credible system. As a member of the Executive
Directors' Personnel Committee, the U. S. Executive Director will
have an opportunity to exercise direct oversight as the system
comes into operation. We therefore recommend that the Secretary of
the Treasury instruct the U. S. Executive Director to work with
other members of the Personnel Committee to actively monitor the
new system's introduction, assess its performance,

and introduce refinements as necessary. Background The Bank's
grievance system is used to seek resolution of a wide variety of
grievances, including complaints about compensation, performance

evaluation, separation from employment, and supervisory
harassment. As of early 1998, the Bank's system for addressing
employee grievances included

 counseling and informal dispute resolution through an ombudsman,
racial and gender equity advisers, the Bank's Human Resources Vice
Presidential Unit, and the Bank Staff Association;  investigation
of alleged misconduct (including improper management

action toward subordinates) by an Office of Professional Ethics;
administrative review, by higher- level managers, of allegedly
unfair or improper management actions toward subordinates;

 referral of disputes unresolved by administrative review to
quasijudicial proceedings before an internal Appeals Committee; 3
and 3 The Appeals Committee is composed of three groups of Bank
staff. The first group is chosen by management in consultation
with the Staff Association. The second is chosen by management
alone, and the third by the Staff Association alone. Individual
grievances are reviewed by three- member panels

that include one representative from each group, with members of
the first group serving as panel chairs.

B-282152 Page 4 GAO/NSIAD-99-96 World Bank Grievance Procedure

 referral of disputes unresolved by the Appeals Committee for
final disposition by an Administrative Tribunal made up of jurists
from Bank member countries. 4

Under U. S. law, the Bank is immune from suits arising out of its
internal operations, including employment relationships, unless
the Bank decides to waive this immunity. 5 The Bank acknowledges
that, because this is the case, it bears a heightened obligation
to ensure that its grievance process is fair and commands
confidence among the staff.

Aspects of the Bank's system for addressing employee grievances
have been revised and augmented on a number of occasions. However,
prior to 1998, the system as a whole had never been assessed. As
part of a larger effort to reform its human resource policies,
Bank management decided in early 1998 to conduct a broad review of
the Bank's grievance system. The

Bank subsequently set up an internal Grievance Process Review
Committee and charged it with reviewing the existing system and
recommending changes to make it fairer and more credible. Senior
Bank managers said that their decision to initiate this effort was
prompted by an awareness that many employees did not trust the
system to fairly address their grievances. Our conversations with
grievants, as well as Bank staff

surveys and other information we examined in conducting this
study, confirmed that many employees lacked confidence in the
existing system's basic fairness. The Review Committee examined
the operations of the Bank's existing

system and a wide range of possible actions. Among other things,
the members of the Committee  obtained detailed commentary on the
Bank's system and possible

alternatives from a noted U. S. jurist with over 40 years of
experience in civil litigation;

4 The Administrative Tribunal the final stage in the Bank's
grievance process is composed of seven individuals, no two of whom
may be nationals of the same country, who perform their duties on
behalf of the Bank while also continuing in other positions.
Tribunal members are appointed by the Bank's Board of Executive
Directors from a list of candidates submitted by the President of
the Bank. According to the international agreement that
established the Tribunal, candidates for membership must be
persons of high moral character and must posses the qualifications
required for appointment

to high judicial office or be jurisconsuls of recognized
competence. 5 See 22 U. S. C. sections 288- 288d. See also
Articles of Agreement of the International Bank for Reconstruction
and Development, Article VII; and Mendaro v. World Bank, 717 F. 2d
610 (D. C. Cir. 1983), holding that the Bank has not waived its
immunity with respect to employment disputes.

B-282152 Page 5 GAO/NSIAD-99-96 World Bank Grievance Procedure

 commissioned a study of the grievance systems of several other
international organizations;  reviewed books and articles
presenting current thought on best practices in formal and
informal workplace dispute resolution, including

descriptions of public and private sector systems recognized for
employing effective procedures;  obtained employee input through
focus groups and a variety of other channels, some of which were
confidential;

 solicited input from the Personnel Committee of the Bank's Board
of Executive Directors, which includes the U. S. Executive
Director; 6 and  submitted a draft of their report for review by a
panel of three

recognized experts on workplace dispute resolution two from the
United States and one from Denmark.

In conducting its work, the Review Committee found no single model
that could be easily adapted to meet the Bank's needs. Private
companies and public institutions in the United States and other
countries employ diverse approaches to workplace dispute
resolution, and the national legal systems of Bank member
countries differ in many key respects. For example, the rights and
obligations inherent in the employer- employee relationship are
defined differently in different countries, and legal systems
employ different standards and approaches to guaranteeing that
disputes are resolved in a fair and unbiased fashion. The Review
Committee sought to draw from diverse sources to create a system
that would function well in

the Bank's unique multicultural environment. In January 1999, the
Committee posted a revised version of its report on the Bank's
internal web site, invited Bank staff to offer comments, and
obtained an endorsement of its recommendations from the Board of
Executive Directors' Personnel Committee. In February, the Review

Committee reported that management had accepted its report without
significant modification and that implementation had begun.

6 The U. S. Executive Director chaired the committee through the
first 10 months of 1998 and continues to serve as a member.

B-282152 Page 6 GAO/NSIAD-99-96 World Bank Grievance Procedure

Reported Shortcomings, Bank's Plan of Action, and Our Evaluation

The World Bank's Grievance Process Review Committee concluded that
the Bank's grievance system had a number of serious shortcomings
and developed a number of recommendations designed to improve the
system's fairness and credibility. The measures proposed by the
Committee refine and enhance, but do not fundamentally alter, the
Bank's system. Based on our discussions with individuals both
inside and outside the Bank and our review of current literature
on best practices in workplace dispute resolution, we believe that
these measures may improve the system's performance, but it is to
early to assess their actual impact.

Shortcomings in the System Identified shortcomings in the Bank's
grievance process included 7  overemphasis on formal, adversarial
procedures as opposed to informal

approaches to resolving disputes, such as mediation;  lack of
expertise and/ or independence from management influence in

Bank units with relevant responsibilities;  lack of procedural
safeguards to ensure that the Appeals Committee and other elements
of the system proceed in a fair and equitable manner;

 relative ineffectiveness in addressing complaints of bias and
harassment;  limitations on redress for staff who are found to
have been treated

unfairly;  lack of effective measures for holding managers
accountable for their

actions toward subordinates; and  insufficient access for the
approximately 2, 600 employees who are

located outside of the Bank's Washington, D. C., headquarters. 8
The Committee noted that employees often saw the system as neither
fair nor credible and that this lack of confidence often deterred
employees from attempting to use the system to resolve problems.
Members of the

Review Committee, as well the Bank's Vice President for Human
Resources, commented that restoring employee confidence in the
system and hence their willingness to use it should be the reform
effort's ultimate objective.

7 Grievants, members of Bank units with relevant responsibilities,
and others with whom we spoke confirmed that these were the
grievance system's predominant shortcomings.

8 Approximately 8, 300 employees work at Bank headquarters.

B-282152 Page 7 GAO/NSIAD-99-96 World Bank Grievance Procedure

Action Plan The Review Committee prepared a plan of action to
address the major shortcomings that it identified. Among other
things, the Committee recommended steps to increase the system's
capacity for informal dispute resolution (for example, mediation),
enhance its independence, and strengthen procedural safeguards for
grievants. The Committee's overall objective was to encourage
settlement of most disputes through relatively

informal, and hence more expeditious means, while also increasing
staff confidence in the more formal procedures applied to settle
disputes that cannot be otherwise resolved.

Strengthening Capacity for Informal Dispute Resolution

The Review Committee concluded that the Bank's system
overemphasized formal approaches to dispute settlement while
providing too little support for informal means of resolving
workplace conflict. Experts in the field

noted that grievance processes that are oriented toward formal
dispute resolution force parties even to relatively simple
disputes to invest substantial time and effort in complex
adversarial proceedings. The

Review Committee observed that, at the Bank, this orientation had
discouraged many employees from attempting to seek redress and
delayed resolution for those who had chosen to proceed. 9 In
particular, the Committee found that administrative review the
process wherein

employees can formally challenge adverse supervisory decisions by
asking that they be reviewed by higher- level management within
the same line of supervision had proven ineffective. In response
to this finding, the Committee recommended eliminating
administrative review while strengthening the system's provisions
for informal dispute resolution. Among other things, the Committee
recommended expanding the ombudsman office from one to three staff
members. In addition, the Committee recommended that the Bank

introduce professionally facilitated mediation as a means of
settling workplace disputes. The new mediation service would be
managed by an individual with substantial experience in workplace
dispute resolution and would provide access to a culturally
diverse roster of external and internal mediators who would work
to settle disputes in a confidential manner. The

Committee intended these measures to bolster employees'
willingness to raise concerns, increase the number of disputes
that are settled in an informal (and consequently less costly and
more timely) manner, and, as a 9 One case that we reviewed, for
example, took more than 2- 1/ 2 years to move from presentation
for

administrative review to a decision by the Administrative
Tribunal. The Tribunal handed down its ruling more than 2 years
after the grievant had been separated from service with the Bank.

B-282152 Page 8 GAO/NSIAD-99-96 World Bank Grievance Procedure

corollary, focus the Bank's more formal mechanisms on
comparatively difficult cases. Their actual impact that is, their
utility in reducing workplace conflict will depend upon a variety
of factors, including the expertise and functional independence of
the people placed in the new positions.

Increasing Independence and Expertise in the System

The Review Committee raised a number of concerns related to the
independence and relevant expertise held by units with significant
responsibilities in the grievance system, including the Appeals
Committee and the ombudsman.

The Appeals Committee is the Bank's primary vehicle for providing
grievants with a formal day in court. According to the Review
Committee, the Appeals Committee has historically processed about
30 cases per year, on average. The Appeals Committee is composed
of regular Bank

employees not legal professionals who serve as panel members in
addition to their other duties. According to Bank employees we
interviewed, these individuals are frequently pressed for time. In
addition, panel members must concern themselves with their own
career prospects

in the Bank. Some employees expressed concern that, as this is the
case, panel members may not be entirely immune from worry about
how their decisions on controversial grievances will be regarded
by senior Bank management.

The Review Committee also noted that the ombudsman traditionally a
single- person operation has generally lacked special expertise
for dealing with the full range of problems that come to that
office's attention, especially harassment and discrimination. In
addition, the Review Committee noted that placement of the Office
of Professional Ethics and the Bank's advisors on racial and
gender equity under the authority of the

Vice President for Human Resources had reduced employee confidence
in these offices' independence from management influence. 10 In
response to concern about the Appeals Committee, the Review
Committee recommended enhancing this body's professionalism by
creating a new staff position Executive Secretary to the Appeals

Committee. This position would be filled by an expert in labor and
employment law. He or she would serve as a nonvoting member of
panels 10 In April 1998, the Office of Professional Ethics was
removed from the operational control of the Vice President for
Human Resources.

B-282152 Page 9 GAO/NSIAD-99-96 World Bank Grievance Procedure

hearing individual grievances, tasked with ensuring that
procedural safeguards are in place and observed, and with ensuring
consistency and continuity in panel deliberations and decision-
making. The person occupying this position would report to the
Office of the President.

It is unclear what value the new position will add to the process.
The Appeals Committee already employs a legal professional who
performs virtually all of the functions that are contemplated for
the new position. The Review Committee made no specific
recommendation for endowing the new position with a higher degree
of authority or influence than the current incumbent already
exercises over panel proceedings. The Review Committee also
recommended that the Bank augment the

ombudsman staff with two individuals holding expertise in specific
areas of concern and replace administrative review with a
professionally managed mediation service. Other Review Committee
recommendations that were intended to address this concern
included staffing the Office of Professional Ethics with trained
investigators and having relevant elements of the system,
including the Office of Professional Ethics and the Bank's gender
and racial equity advisers, report directly to the Office of the

President. Strengthening Procedural Safeguards

The Review Committee, as well as grievants and outside experts,
identified a number of shortcomings in the procedures that the
Office of Professional Ethics, the Appeals Committee, and the
Administrative Tribunal employed. These sources said that these
shortcomings reduced employee confidence

that these elements of the system will conduct themselves in a
fair and impartial manner. The Review Committee offered
suggestions on how these procedural safeguards could be
strengthened.

The Office of Professional Ethics. The Review Committee noted that
many employees lacked confidence in the ability of the Office of
Professional Ethics to conduct investigations in a manner that
treats both accused parties and accusers fairly. In response, the
Review Committee recommended that the Office establish clear rules
and procedures to protect the rights of all parties and ensure
that investigations are

conducted fairly. The Appeals Committee. The Review Committee
agreed with other Bank employees and outside experts who observed
that the Appeals Committee, though originally developed as a
vehicle for informal peer review, is now expected to conduct
proceedings that are essentially adversarial in

B-282152 Page 10 GAO/NSIAD-99-96 World Bank Grievance Procedure

character. The Review Committee concluded that while the
procedures followed by Appeals Committee panels may once have been
adequate, they could no longer be regarded as providing sufficient
procedural safeguards for the parties to disputes, especially
grievants. Among other specific shortcomings cited by employees
and noted by the Review Committee, panel chairs retained complete
discretion with regard to calling and

cross- examining witnesses, and witnesses did not testify under
oath. The Review Committee confirmed the views of several
grievants with whom we spoke who stated that, as a result, panel
deliberations often proceeded on the basis of incomplete or biased
information. The Review Committee also noted that grievants often
experienced substantial delays in moving forward. Bank attorneys
commonly filed detailed challenges to the

Appeals Committee's jurisdiction, and there was no deadline by
which senior management was required to reply to panel
recommendations.

In addition, the Staff Association, as well as grievants, pointed
out that employees bringing complaints before Appeals Committee
panels often felt overwhelmed by the enormity of the Bank as an
opponent. These sources noted that this feeling may be exacerbated
by rules that permit grievants to be accompanied by only one
person an adviser supplied by the Staff Association or the Appeals
Committee, or an attorney as they participate in panel hearings.
Finally, some grievants objected to the fact that final authority
to act on panel findings and recommendations lay with

management most often the Vice President for Human Resources. The
Review Committee did not recommend making Appeals Committee
decisions binding on management. However, it did recommend a
number of procedural improvements, including

 providing grievants with a formal role, along with management and
the Appeals Committee itself, in determining the witnesses that
will be called;

 explicitly recognizing the right of the parties to cross- examine
witnesses;  requiring witnesses to make a declaration of
truthfulness before offering

testimony;

B-282152 Page 11 GAO/NSIAD-99-96 World Bank Grievance Procedure

 reducing delays by limiting the Bank's right to challenge the
Appeals Committee's jurisdiction 11 and by requiring that Bank
management act on recommended remedies within 60 days. 12

The impact of these recommendations on Appeals Committee
deliberations will depend to a large extent upon the manner in
which they are adapted into the rules governing Appeals Committee
operations, as well as the manner in which they are applied in
practice. For example, as already noted, existing Appeals
Committee rules vest the panel with the authority to decide which
of the witnesses requested by the parties will be heard and the
scope of each witness' testimony. Beyond submitting lists of
desired witnesses, the rules do not provide the parties to the
case with a

role in deciding who is permitted to testify, or the topics on
which these witnesses will speak. However, the rules do establish
standards for panel decisions on such matters. They state that the
panel may reasonably limit the number of witnesses that appear and
the scope of their testimony

when it is satisfied that sufficient evidence has been heard to
disclose fully and fairly the facts related to the appeal. It
remains to be seen whether the wording that is developed to
replace this provision will substantially strengthen this
standard, and whether, in practice, the revised language will
provide grievants with a stronger hand in resolving questions on
witness selection and testimony. The Administrative Tribunal. The
Committee noted employee concern that the Administrative
Tribunal's procedures did not provide its members with a full
understanding of the matters at issue. Some employees and outside

reviewers were particularly troubled that the Tribunal usually
arrived at decisions without benefit of oral hearings. The
Tribunal is not an appeals court, as we understand the term in the
United States. That is, it does not review the manner in which the
Appeals Committee has handled the cases that are forwarded for
Tribunal action, nor does it remand cases for rehearing before the
Appeals Committee.

Rather, it conducts its own independent review of the facts and
arrives at 11 The Bank would continue to be allowed such
challenges when the maximum time permitted employees for seeking
redress after experiencing allegedly unfair or improper management
actions had passed.

12 To be more precise, the Review Committee recommended that
Appeals Committee recommendations become binding if management did
not respond within 60 days.

B-282152 Page 12 GAO/NSIAD-99-96 World Bank Grievance Procedure

its own decisions on the merits of each case. Unlike Appeals
Committee recommendations, Tribunal decisions are binding on the
Bank.

The Tribunal meets infrequently, for short periods of time.
Although it has the right to hear oral testimony, it seldom does.
According to its staff, the Tribunal has held oral hearings on two
occasions since its founding in 1980. The Tribunal has nearly
always based its rulings on written submissions from the parties.
These written submissions include an initial application

by the grievant, followed in succession by (a) management's answer
to the application, (b) the grievant's reply to the answer, (c)
management's rejoinder to the answer, and (d) additional written
statements, if deemed

necessary by the Tribunal. In response to concern about the
adequacy of the record employed by the Tribunal, the Committee
recommended making transcripts of Appeals Committee hearings
available whenever cases advance to the Tribunal. 13 The Committee
also recommended that the Tribunal consider the merits of holding
oral hearings more frequently.

Improving the System's Capacity for Addressing Bias and Harassment

The Bank's staff rules and related materials state that bias and
harassment including sexual harassment are contrary to Bank
policy. 14 Nonetheless, the Review Committee noted that confidence
in the system

was particularly low among female employees and employees of
African origin. For example, recent surveys found that only 1 in
10 female employees experiencing unwelcome sexual attention sought
help from the

resources the Bank had established for handling such problems and
that fewer than 40 percent of employees regarded the Bank as
serious about dealing with nationality discrimination.

The Review Committee proposed several measures that may help to
improve the Bank's capacity for addressing bias and harassment
allegations. These include the expansion of the ombudsman office
to include staff with appropriate skills and creation of a
mediation service.

13 In other cases, the Appeals Committee would continue its
present practice of not creating full transcripts. Hearings would
be taped in order to provide for creation of transcripts if
required. 14 In a 1994 policy statement, the Bank defined
harassment, whether by peers or superiors, as speech or conduct
which unreasonably interferes with work or creates an
intimidating, hostile or offensive work environment, whether on
the basis of race, religion, color, gender, sexual orientation,
national origin or other like factors.

B-282152 Page 13 GAO/NSIAD-99-96 World Bank Grievance Procedure

The Review Committee noted one particular provision that has
limited access to the more formal portions of the Bank's system
for many staff experiencing bias or harassment. The rules and
regulations governing the

Appeals Committee specify that, to seek redress through the
Committee, staff members must challenge specific adverse
managerial decisions. These may include allegedly unfair decisions
on such matters as performance evaluation, compensation,
promotion, or separation from

employment. However, staff experiencing bias or harassment may be
unable to point to a specific adverse decision as a basis for
seeking redress. Experts in this area note that workers alleging
bias or harassment often

base their complaints on more general allegations that their
superiors have maintained a hostile work environment. In response
to this shortcoming, the Review Committee recommended that
grievants be permitted direct access to the Appeals Committee
without first going through any other process. We note that the
Appeals Committee's rules will also have to be changed to permit
it to accept jurisdiction over cases where no specific adverse
management decision has been cited.

Expanding the Committee's jurisdiction to include broadly based
allegations of harassment, without reference to specific adverse
decisions, raises questions regarding the criteria that the
Committee should apply in arriving at its decisions. In this
connection, the Review Committee noted that the Bank is engaged in
developing an improved, more comprehensive harassment policy and
code of conduct. This effort may provide the Appeals Committee
with an adequate basis for fairly addressing grievances of this
type, provided that it includes clear criteria for assessing
managers' actions.

Expanding Redress for Successful Grievants Grievants and other
concerned Bank staff noted certain limitations in the

remedies that have been provided for grievants obtaining favorable
judgments from the Appeals Committee or the Administrative
Tribunal.

First, the Appeals Committee has the authority to award successful
grievants reasonable attorneys' fees, but it has seldom done so.
In more complex cases, grievants may incur substantial attorneys'
fees in obtaining

a favorable ruling. Grievants argue that they should be reimbursed
for these expenditures when the Bank is found to have been at
fault. In response, the Review Committee recommended that the
Appeals Committee make greater use of its authority to recommend
award of reasonable attorneys' fees to successful grievants. The
actual impact of

B-282152 Page 14 GAO/NSIAD-99-96 World Bank Grievance Procedure

this recommendation will depend not only on the Appeals
Committee's willingness to recommend such awards in appropriate
cases but also on Bank management's willingness to actually make
such awards. Second, terminated grievants have seldom been
reinstated, even when found to have been unfairly treated. Since
1990, for example, the Bank has reinstated five individuals in
response to Appeals Committee recommendations, while no one has
been reinstated based on a favorable ruling by the Administrative
Tribunal. The Review Committee's report noted that reinstatement
has rarely been provided, even when the Tribunal has found
management guilty of gross malfeasance.

In lieu of reinstatement, Bank management has frequently opted to
provide successful grievants with monetary compensation. When
recommending reinstatement, the Tribunal is specifically required
also to fix an amount of monetary compensation, up to 3 years net
pay, that the Bank may decide to

award instead. 15 The Bank has opted for compensation in each of
the seven cases since 1990 in which the Tribunal recommended
reinstatement. During this same period, Bank management also
elected to provide monetary settlements in two cases in which the
Appeals Committee had recommended that reinstatement be
considered. Concerned parties contend that the low likelihood of
reinstatement as a remedy for unfair separation from employment is
unacceptable, given the special circumstances attendant to
employment in the World Bank. They point out that foreign
nationals employed at the Bank's Washington, D. C., headquarters
remain in the United States only by virtue of their status as Bank
employees. Unless they find employment with another international

organization, such as the United Nations, they must leave the
United States within 60 days.

The Review Committee noted the desirability of reinstatement being
provided when justified but did not make any recommendations on
this matter, given that decisions on reinstatement ultimately rest
with the

[Bank] management. It remains to be seen whether the Review
Committee's endorsement of the more frequent use of reinstatement
as a remedial measure will have a substantial impact on future
Bank actions.

15 The Tribunal may order the payment of higher amounts of
compensation in exceptional cases where it believes such amounts
are justified.

B-282152 Page 15 GAO/NSIAD-99-96 World Bank Grievance Procedure

We note that final authority for deciding whether to reinstate an
employee rests with the President of the Bank. Holding Managers
Accountable The Review Committee reflected a concern expressed by
many Bank

employees when it observed that the system has not effectively
held managers accountable for complying with the Bank's rules
regarding appropriate treatment of subordinates. Many employees
view the Bank's willingness to take action against managers who
repeatedly violate the Bank's commitment to fair treatment of
employees as a key indicator of its sincerity in pursuing
effective reforms.

Several of the measures already discussed may help to address this
problem. These include (1) clarifying the Bank's standards and
expectations regarding harassment, (2) strengthening the Office of
Professional Ethics' investigative procedures and personnel, and

(3) expanding the Appeals Committee's purview to include
grievances that are not based on specific adverse managerial
decisions.

The Review Committee also recommended that the Bank reinforce
accountability by reporting Appeals Committee decisions that
clearly indicate mismanagement to offending parties' superiors,
sanctioning

managers who are found to have committed serious or repeated
violations of staff rules, and advising Appeals Committee
witnesses that knowingly making false statements would result in
disciplinary action. Finally, the Review Committee recommended
that the Office of Professional Ethics, the ombudsman staff, and
the Bank's racial and gender equity advisers cooperate to develop
a system for monitoring and reporting

cases of harassment and discrimination. While potentially
worthwhile, this recommendation may be particularly difficult to
put into effect. If effectively implemented, the system envisioned
by the Review Committee increases the likelihood that management-
staff disputes will be addressed in forums like the ombudsman's
office whose continued effectiveness depends on maintenance of
confidentiality. Outside experts noted that this simultaneous
commitment to greater accountability and greater confidentiality
presents those charged with implementing the new system

with a major challenge preserving an appropriate balance between
the two commitments. Ensuring Access for Field Staff The Review
Committee noted that employees working outside of Bank
headquarters have made relatively little use of the grievance
system at least partially because of the difficulties that they
have faced in accessing

B-282152 Page 16 GAO/NSIAD-99-96 World Bank Grievance Procedure

the various elements of the system, which have been located almost
entirely within the Bank's Washington, D. C., headquarters. The
Review Committee made a number of recommendations for improving
field staff access. These included

 providing access to the Office of Professional Ethics and the
ombudsman office through secure, toll- free telephone lines;
tasking the ombudsman staff with working to develop a network of
local

ombudsmen to serve field offices possibly in cooperation with
other international organizations;  requiring that the manager of
the proposed mediation service ensure that mediation is available
to field offices; and

 equipping the Appeals Committee to conduct videoconferences with
field offices. We note that providing most field offices with
effective access will be quite challenging, given the fact that
Bank employees are dispersed among more than 90 sites around the
world.

Key Implementation Issues

The Review Committee left management with a number of key issues
that must be more fully addressed as implementation proceeds.

Outstanding Procedural Matters

As already noted, a number of procedural matters must be addressed
before certain of the Review Committee's recommendations can be
fully implemented. Among other things, these matters include (1)
completion of procedures to govern Office of Professional Ethics
investigations and policies clarifying the Bank's expectations
regarding harassment and (2) clarification of the Appeals
Committee's jurisdiction, the role of its proposed additional
legal staff member, and rules governing the selection of witnesses
and the scope of their testimony.

Developing an Appropriate Training Program

The Review Committee recognized that appropriate, effective
training for Bank employees, especially managers, is critical to
the success of the reform initiative. In addition to informing
employees about the new system, the Committee envisioned a
training program that would provide Bank staff with improved
ethics, conflict resolution, and communications skills, as well as
increased sensitivity to cultural differences. Experts agree

B-282152 Page 17 GAO/NSIAD-99-96 World Bank Grievance Procedure

that effective training in these areas can reduce workplace
conflict and facilitate early resolution of such disputes as may
still arise.

To begin work in this area, the Review Committee recommended that
a new unit be created within the Office of Professional Ethics
charged specifically with promoting corporate values and ethical
behavior among the staff. (The Office previously concentrated
almost exclusively on conducting investigations.) The new head of
the Office has already made some efforts in this direction, such
as examining the Bank's existing training portfolio to identify
elements that can be expanded and/ or strengthened. However,
substantial work remains to be done to create the

multifaceted, coordinated training program that the Review
Committee envisioned.

The Review Committee noted that one important topic in this
training program should be how to prepare and communicate
meaningful performance evaluations. The President of the Bank
highlighted the performance evaluation system as a critical area
of concern. He noted that Bank managers have not, in practice,
been required to provide candid and timely performance feedback to
employees. The Bank's Human Resources Vice Presidential Unit is
currently engaged in introducing an improved

performance appraisal system. Monitoring and Refining the System

The Review Committee noted that in the past none of the units in
the system collected meaningful information on its own
performance. Representatives of the Appeals Committee, for
example, reported that their unit had not instituted effective
means for obtaining structured feedback from grievants and
managers about their experiences before the

Committee. In addition, because the Bank's system was not really
an integrated structure but a set of uncoordinated mechanisms
created at different times for different purposes, such data as
had been collected

could not be used for systemwide analyses. Because the system
developed in this manner, the Review Committee observed that the
Bank also lacked an effective institutional focal point for
examining relevant information and taking such actions as may be
indicated, including recommending refinements in the system.

The Review Committee concluded that the Bank should develop
systemwide performance measures that can be used as a basis for
monitoring the new system's performance. Staff satisfaction would
be the chief measure, along with accessibility and the cost and
time required for

B-282152 Page 18 GAO/NSIAD-99-96 World Bank Grievance Procedure

settling disputes. Substantial effort remains to be invested in
operationalizing these concepts, designing data- gathering
instruments, and creating databases so that meaningful information
on the system's performance (including the performance of each
unit within it) can be effectively gathered, accessed, and
analyzed.

In order to provide a focal point for a sustained commitment to
improving the system, the Review Committee proposed creating a
conflict resolution network comprised of all of the offices
holding responsibility in this area.

In addition to approving all proposed rules and procedures for the
new system's constituent elements, the network would be charged
with monitoring the system's performance, identifying emerging
issues, and

recommending additional refinements as necessary. The Review
Committee recommended that the network continue to explore the
introduction of other dispute settlement options, such as
arbitration by external dispute resolution professionals, into the
Bank's system. 16 The network would have an implementation
coordinator who would oversee creation of the new system and a
rotating chair that would report to the Office of the President on
at least a quarterly basis. The Review Committee also proposed
that the network share with the employees information on

major trends and developments. However, the manner in which this
network will actually operate remains to be determined. The Review
Committee recommended that key actors in the new system including
the head of the Office of Professional Ethics and the Appeals
Committee, the ombudsmen, and the chair of the conflict resolution
network report directly to the Office of the President. These
recommendations highlighted the important role that this office
should

play in ensuring that the reformed system operates in a fair and
independent manner, that managers are held accountable for their
actions toward subordinates, and that refinements in the system
are introduced as experience is gained through actual operations.

To further ensure a sustained commitment to improving the system,
the Committee also recommended that annual reviews be conducted
during 16 Providing access to external arbitration is one of many
options that are available for augmenting the

independence and impartiality of the system. The Review Committee
considered including arbitration among its recommendations.
However, the Committee decided against making such a
recommendation at this time, given that (a) substantial effort
will already be required to implement the Committee's other
recommendations and (b) the real need for arbitration as a
supplement to the new system can only be judged after the new
system has been in operation for some time.

B-282152 Page 19 GAO/NSIAD-99-96 World Bank Grievance Procedure

each of the next 3 years, with provisions for taking employee
views into account, as well as commentary from outside experts and
the Board of Executive Directors' Personnel Committee. Substantial
effort remains to be invested in planning and carrying out these
reviews in a manner that ensures that they provide a meaningful
basis for continued improvement in the system.

Evaluating the Administrative Tribunal

The Administrative Tribunal was not created by management but by
an agreement among the Bank's member countries. Thus, Bank
management cannot mandate changes in Tribunal operations on its
own initiative. Major changes can only be made by agreement among
the member countries.

The Committee recommended that the Tribunal itself reassess its
own procedures, taking input from Bank management and staff into
account. Whether the Tribunal follows this recommendation remains
to be seen, as does the nature of the conclusions that such an
assessment might reach.

Conclusions The Bank has acknowledged serious procedural and
operational shortcomings in its grievance system and has prepared
an action plan to

address these shortcomings. As implementation has just begun, the
extent to which the action plan will increase the fairness and
credibility of the grievance system cannot be assessed at this
time. A number of open issues remain to be addressed, including
several procedural matters, development of an appropriate training
program, and creation of an effective monitoring system. Sustained
management commitment and support will be needed to resolve

these issues. As the revised system comes on line the performance
of the Office of the President in supporting the system's
independence and authority will be a key factor in determining its
success. As a member of the Executive Directors' Personnel
Committee, the United States Executive Director will have an
opportunity to exercise direct oversight as the new system comes
into operation.

Recommendation To help ensure that the Bank achieves its ultimate
goal of restoring employee confidence in the grievance system, we
recommend that the

Secretary of the Treasury instruct the U. S. Executive Director to
work with other members of the Executive Directors' Personnel
Committee to actively monitor Bank efforts to implement the new
system developed by

B-282152 Page 20 GAO/NSIAD-99-96 World Bank Grievance Procedure

the Review Committee, assess its performance, and introduce
additional refinements as needed. One critical element in helping
to ensure the success of the reforms adopted by the Bank is the
collection of meaningful data on whether these reforms have made
the system more fair and credible. These measurement criteria have
yet to be developed. To help assure that the Bank's goals are
achieved, we recommend that the Secretary of the Treasury instruct
the U. S. Executive Director to work with other members of the
Personnel Committee to ensure that the Bank develops indicators
that will provide an adequate basis for judging the reforms'
actual impact.

Scope and Methodology To understand the Bank's grievance system,
we reviewed the rules and

regulations governing its operation and interviewed employees from
all Bank units with substantial responsibilities in this area.
These units included the Appeals Committee, the Administrative
Tribunal, the Office of Professional Ethics, the vice-
presidencies for Human Resources and Legal Affairs, the Senior
Advisers for Racial and Gender Equity, and the

ombudsman. We examined the Review Committee's written conclusions
regarding the system's strengths and weaknesses, discussed these
matters with staff from relevant Bank units, reviewed a number of
grievance case histories, and interviewed grievants and their
attorneys. We also reviewed the results of employee focus groups
held to inform the Review Committee's deliberations, as well as
several reports that were prepared by outside experts at the
Review Committee's request.

To provide a firm basis for reviewing (a) proposed improvements
and (b) measures for ensuring that these proposals are
successfully implemented, we interviewed experts on workplace
dispute resolution and

reviewed written commentary on effective formal and informal
workplace dispute resolution from a number of expert sources.
These included the American Arbitration Association, the Society
of Professionals in Dispute Resolution, and the American Bar
Association. To further inform our review, we read written reports
on the grievance systems employed by other international
organizations and by private and public sector organizations in
the United States, including U. S. provisions for

adjudicating disputes of this type before federal and state
courts. We examined the Review Committee's draft recommendations
and discussed them with members of the Committee, including the
co- chairmen and the head of the Staff Association; the President
of the

B-282152 Page 21 GAO/NSIAD-99-96 World Bank Grievance Procedure

Bank; heads of relevant Bank units; grievants; and outside
experts, including those engaged by the Review Committee. We did
our work in Washington, D. C., between October 1998 and February
1999 in accordance with generally accepted government auditing
standards. Agency Comments and Our Response

The Department of the Treasury and the President of the World Bank
provided written comments on a draft of this report. These
comments are reprinted in appendixes I and II.

The Department of the Treasury stated that the report presents a
fair and accurate assessment of the Bank's grievance process and
the Review Committee's proposals. Treasury affirmed the commitment
of Department

staff and the U. S. Executive Director to monitoring Bank
implementation of the recommended reforms to ensure that they have
their intended effect. The President of the World Bank noted his
personal commitment to ensuring that the recommended reforms
result in a highly effective system for addressing employee
grievances.

The President of the World Bank commented that, in his view, the
report did not clearly convey a number of points that he
considered important. Specifically, he stated that the report did
not  recognize that the Bank's grievance system reform effort part
of a broader effort at reforming the Bank's human resource
policies and

practices began well in advance of GAO's review;  capture the
unique challenge of creating an effective system in an

international organization composed of 181 member countries with
widely varying dispute resolution practices;  acknowledge the
magnitude of the changes being made in the system,

especially the substantial shift in emphasis toward settling
disputes through informal, nonadversarial means; or  mention that
the experts consulted by the Bank viewed the system

developed by the Review Committee as a state of the art model. Our
draft specifically stated that the Bank appointed a Grievance
Process Review Committee in June of 1998, whereas our examination
of the Review Committee's findings and recommendations did not
begin until October 1998. The draft also acknowledged that the
Bank's decision to examine its

grievance process grew out of a broader, ongoing effort to reform
the

B-282152 Page 22 GAO/NSIAD-99-96 World Bank Grievance Procedure

Bank's human resource policies. The draft's background section
discussed the difficulties inherent in developing an approach to
resolving workplace disputes that would function effectively in a
multicultural environment such as the Bank's. It also stated that
the Bank's reform plan included a

wide variety of measures that were intended to strengthen the
system in each area where shortcomings were identified. We began
the discussion of these measures in our draft report with a
description of the Review Committee's recommendations for
substantially strengthening the Bank's capacity for informal
dispute resolution. Our draft also recognized that the Review
Committee sought, through various means, to ensure that its final
report to management would be in line with current professional
thinking on best practices in workplace dispute resolution. In
discussions with Bank staff and with GAO, the

experts consulted by the Bank commented that the Review Committee
had taken current best practices thinking into account in
developing its recommendations, and that the Committee's action
plan provided the Bank

with a sound basis for developing a fairer and more credible
system. However, these experts also noted that no plan, however
constituted, could be relied upon as certain to be satisfactory
and that because this is the case, it is important that the Bank
develop systems for effectively

monitoring and refining the system as implementation proceeds. We
are providing copies of this report to the Honorable Robert E.
Rubin, Secretary of the Treasury, and to Mr. James D. Wolfensohn,
President of the World Bank. Copies will be made available to
other interested parties upon request.

Please contact me on (202) 512- 4128 if you or your staff have any
questions concerning this report. The major contributors to this
report were Michael McAtee, Stephen Lord, and Mark Dowling.

Harold J. Johnson, Associate Director International Relations and
Trade Issues

Page 23 GAO/NSIAD-99-96 World Bank Grievance Procedure

Page 24 GAO/NSIAD-99-96 World Bank Grievance Procedure

Appendix I Comments From the Department of the Treasury Appendi x
I

Page 25 GAO/NSIAD-99-96 World Bank Grievance Procedure

Appendix II Comments From the World Bank Appendi x I I

Appendix II Comments From the World Bank

Page 26 GAO/NSIAD-99-96 World Bank Grievance Procedure (711389)
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