Their authority is like a jury, not a legislature. They don't have the authority to change policies, just to see that they are followed properly. A letter explaining the panels decision is sent to the employee. All panel members sign the letter and no minority opinions are permitted. Everyone gets back to work and the issue is settled.
Management still makes the policies.
Peer review panels simply decide whether management has played by its own rules. One initial concern many organizations have about peer review is management's distrust and skepticism. While they fear that employees will give away the store, managers are often relieved to find their concerns unfounded. By giving up a little bit of authority, you can generate an enormous amount of support because peer review validates the employees' perception of a fair and impartial process. Peer review also increases supervisor effectiveness by forcing supervisors to pay more attention to the rules.