Employee performance is always rated in one manner or another. Best practice is to rate this performance through known, objective processes. In the context of the employment relationship, performance evaluations are an essential tool for providing workers with insight into how managers are making decisions about promotions, equity, and pay. In addition, performance evaluations will most certainly play a critical role if the employment relationship ends and litigation occurs.
The following guidance is intended to assist employers in refining how the process is planned, conducted, and repeated. A fair process exists when evaluators are credible and motivated to get it right, and employees have a voice. Without evaluations, employees are left with uncertainty about who is gauging their contributions and how, leaving them to assume that employment decisions they perceive as unfair to be based on some nefarious or discriminatory purpose. Following the recommendations set forth below can improve employee performance, while also giving managers a more effective structure for how to have important conversations.
Effective evaluations take more than handing a manager a set of documents and asking them to complete reviews once a year. Employers must train managers on the details of the performance evaluation system adopted by the organization. Managers must also be equipped to communicate the employer’s goals and expectations; how to answer questions commonly raised by employees on topics like compensation, training, promotions, attendance, job duties, and responsibilities; and how to ensure objectivity and consistency during the evaluation process. In addition, considerations for managers include:
- No surprises. The formal performance evaluation process is not the time to first notify an employee that their performance is falling below expectations. Rather, informal or less formal feedback should be given contemporaneously, including notice of any decline in performance, giving the employee a chance to correct it well before the formal performance review rolls around. In addition, keep employees updated on any changes to performance expectations; these should not be communicated for the first time when the employee is receiving a performance review using these new metrics.
- Caution managers about the pitfalls of over-rating. The evaluation should be accurate and truthful. While it may be hard to give employees negative feedback, rating employees higher than is warranted gives failing employees a false sense of security and it devalues the actual excellent performance by others. Inflated reviews contribute to liability exposure where an employment action such as termination is followed by litigation. It is particularly hard to argue that an employee was a low performer or not meeting expectations when their personnel file is filled with glowing performance reviews. Managers owe it to their subordinates and the employer to provide truthful and accurate performance reviews.
- Select words carefully. The language and attention to detail matters when documenting performance. Managers should describe behavior rather than using labels such as “acceptable” or “bad attitude.” Avoid words like “never” and “always.” If an appraisal is too harsh it can discourage the employee, while one that is too lenient might deprive the employee of an opportunity for growth. It is important that the manager take the time to really think about what is said in a performance review.
- Avoid inconsistencies. When written comments are reflective of numerical rankings or employees are subject to different standards of behavior, a manager might be guilty of inconsistency. Since inconsistency can lead to discrimination claims, managers should complete the comments portion of an appraisal before choosing numerical rankings.
- Be an active listener. Managers should give employees an opportunity to provide any comments or feedback, and managers must be trained to identify feedback that may represent complaints about the employer’s business practices and on how to respond or escalate those complaints. Managers are the employer’s first line of defense, thus, they need to know how to spot issues early. Moreover, responding promptly when issues are raised will positively impact employee morale and prevent discriminatory bias from entering the review process.
- Consider the whole picture. It is understandable that managers often remember the issues that occurred most recently when conducting a performance review. This, however, can paint an incomplete picture of the employee’s performance. Managers should develop a process to keep track of employee performance for the entire duration of the performance review period to ensure that the review covers this entire period.
- Timeliness matters. Conducting late, untimely, or incomplete reviews may give the perception that the employer does not take performance reviews seriously or that they are pretextual. Evaluations should be conducted on a consistent schedule based on the employer’s written policies and procedures. Managers need to perceive performance reviews as a critical part of their job duties.
Do not underestimate the value of performance reviews conducted by trained members of management. They can be one of the greatest tools to motivate employees or to put them on notice of issues. It also allows employees to feel they are treated fairly and given due process. On the other hand, a lack of performance reviews or poorly administered performance reviews can be the basis for workplace claims (or, at a minimum, make it more challenging for an employer faced with termination-based litigation). The key to avoiding these claims begins with the employer recognizing and prioritizing the importance of performance reviews and training managers to conduct them appropriately.
