Thursday, August 20, 2015

The Performance Review Your Employment Attorney Wants

Annual performance reviews are dreaded by supervisors, employees, and human resources professionals alike.  They rarely look at an entire year of performance, are usually filled with gratuitous, vague, and meaningless statements, and can come too late in a performance cycle to be of real benefit to employees or employers. Commentator Marcus Buckingham describes such reviews as “bad data.” Whether or not reviews actually serve their intended purpose, we find that in litigation, performance reviews can create problems because their language and meaning have to be explained to the judge and jury. Our experience suggests that far too often, annual performance reviews don’t provide good support for an employer’s termination decision.
Some companies have changed their review process, perhaps in recognition of the limitations just described.   Adobe, Accenture, Netflix, and GE are a few of the big businesses that have done away with the annual performance review.  These companies are moving to monthly or quarterly “check ins” with employees to discuss performance.  Employees and managers have informal discussions about how the employee can improve, what additional training or other skill development is needed, or how to build an employee’s success.  Employers who have adopted these methods believe that frequent feedback allows for more agile performance that responds quickly to business needs.  Of course the frequent feedback and performance discussions have to be done well.
When employment lawyers evaluate the documentation that a client provides in support of a termination, there are things we hope to see and things we’d rather not see.  Here are some of the  items on our wish list:
  • Clearly described expectations.  Whether written in a position description or sent in an email, clear expectations need to be communicated to employees and the documentation supporting a termination or other negative personnel action needs to include evidence that the employee knew what was expected. If a sales rep needs to hit $1 million in sales each year, that expectation should be explained to the employee and the explanation should be documented.  If an electrician is expected to install an outlet to Electrical Code specifications, the job description should say so.  While this may seem obvious, failure to understand what is expected is a major component of poor employee engagement and most certainly a factor in employee performance. Further, failure to prove that an employee understood the employer’s expectations has derailed many a defense to an employment claim.
  • Examples of poor performance.  Calling an employee “difficult,” “unresponsive,” or “unprofessional” isn’t very helpful. Examples can be helpful, whether in a formal review or an informal feedback session. Employees who are given specific examples of poor performance are more likely to turn their performance around, and documentation that includes specific examples of poor performance is very helpful in defending personnel actions. 
  • Documentation!  You’ve seen the word “documentation” several times already in this post.  That’s because your employment lawyer wants very much to have some when explaining or defending what you’ve done. Think about this: when asked if an organization is “negligent” if it does not properly document an employee’s performance problems, 91% of respondents to a survey published by the Federation of Defense and Corporate Counsel said yes. Employees, unions, agencies, and juries expect more than an employer’s unsupported assertion that it had good reasons for the action it took.  Remember that documentation of personnel actions does not necessarily mean completed, formal performance reviews.  It can mean an email recapping a meeting about performance, a memo to an employee outlining deficiencies and needed improvement, or even a supervisor’s handwritten notation that something happened or something was communicated on a particular day. 
  • Evidence of a chance to improve. In our experience, jurors in employment cases believe employees need a chance to improve performance before they are terminated.  This may not be legally required, but juries and judges like it much better if employees have a reasonable chance to correct performance problems. 
  • Consistency.  We like it when similarly situated employees are treated the same.  We don’t like it when similarly poor performance gets one employee fired and another employee a mere warning.  We don’t like performance standards that are applied differently to different groups of employees.  We especially don’t like it when employees in a protected class seem to be held to tougher standards than non-protected class employees.
  • Timeliness.  If you have told your employees that they will be reviewed annually, you need to honor that commitment (or tell them they won’t, or may be, reviewed at a particular interval).  Delayed or non-existent evaluations are less credible than reviews done on the schedule the employer created and announced. 
Performance remains the number one reason for terminating employees.  Many employers are in the habit of annual reviews.  It may be that more frequent, less formal feedback will serve your organization and your employees better.  Or, your annual review process may work just fine.  Whatever your chosen method of addressing employee performance, make it a credible, consistent, well-documented process.  Your employment lawyer will be thrilled.
Posted by Kate Bischoff