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February 09, 2011
Avoid Potential Legal Problems Stemming from Performance Appraisals

Training managers and supervisors to provide honest, objective evaluations of employee performance can help employers avoid legal problems.

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Awkward Conversations

From a legal standpoint, “the biggest problem I see is failing to accurately assess performance,” says Allison Feldstein, a member in the Employment Law Department at Eckert Seamans Cherin & Mellot (www.eckertseamans.com). “Managers are very uncomfortable sitting down one-on-one with an employee and saying, ‘Your performance is not that great.’”

So, they tend to “overblow” performance ratings. However, “that can create significant problems down the road” if the employee is terminated or disciplined for performance issues, she says.

For example, an employer might claim that an employee, who is African-American, was fired for poor performance. However, if that employee had received glowing evaluations while still employed, he might accuse the company of firing him because of his race, Feldstein explains. Inflated reviews undermine the employer’s position and leave a jury wondering whether performance was the true reason for the termination or if it was pretext for unlawful discrimination, she says.

“The key issue really is inconsistency between performance appraisals and an employee’s true performance,” Feldstein adds.

Advice to Consider

Feldstein says appraisals should measure such factors as the essential functions of a particular position, tasks required to perform the job, interpersonal issues, and attendance at meetings.

She suggests having two levels of review for each employee to help ensure consistency—and to avoid the chances of one supervisor or manager unfairly giving a friend a more favorable review than other employees.

She also says employers should train supervisors and managers on the importance of conducting performance appraisals in an objective and consistent way. “Honesty is always the best policy,” she maintains.

During training, she recommends reviewing the actual performance appraisal document with supervisors and managers and “explaining specifically what it is you’re looking for.” If your company uses a rating scale of 1 to 5, give specific examples of “what qualities and characteristics warrant an employee being given a 5 and what qualities and characteristics warrant a 1.”

In the comments section of the appraisal, supervisors and managers should provide objective criteria when describing performance problems. For example, they should avoid making “fuzzy” statements, such as “He is not a team player” or “She often does not get along with co-workers.”

Instead, Feldstein says, supervisors should write something like, “There have been several instances where the employee failed to get a long with co-workers. Examples are …” and then provide concrete examples.

“Provide objective, factual examples as to why performance is not meeting standards,” she says, and advise employees on how to improve their performance.

Appraisals should be conducted on a yearly basis, and the appraisal process should be reviewed every few years to make sure the document accurately measures the job responsibilities, and that new managers have received relevant training.

Performance appraisals are “definitely an important part of employee relations,” she says. Employees value the feedback and, since appraisals are often tied to their salaries, employees expect the appraisals to be taken seriously. For that reason, and because of potential legal issues, Feldstein says employers should take appraisals seriously as well.


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