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Effective Performance Reviews: How to Avoid the Pitfalls

     A lawsuit waiting to happen. If that’s how you and your supervisors tend to view the performance review process, you’re not alone. Here are some tips for minimizing your legal liability:

  • Tailor performance reviews to different job groups by basing evaluation on actual job content and responsibilities taken from an up-to-date job description.
  • Avoid subjectivity by using written, brief, precise, and achievable work standards that are consistent with company objectives. Oral standards may be misunderstood by the supervisor and employee, and written standards also will be available for the defense of any ensuing legal action. Supervisors may shy away from using complicated standards, and employees may misinterpret them.
  • Use quantitative terms to define performance standards rather than subjective terms such as "acceptable," "well done, "etc. For example, note difference between "type neatly" and "no more than two typographical errors per medical report."
  • To further decrease subjectivity, describe standards for personal traits like "initiative" or "leadership" in plain phrases or simple sentences. For example, describe "initiative" as "ability to foresee and solve problems."
  • Where appropriate, state definite completion date for compliance with performance goals.
  • Avoid disagreement about performance standards between managers and supervisors. If the validity of certain performance standards is questionable, present them as proposed standards, subject to further revision based on actual experience.
  • To avoid problems with credibility and perceptions of unfairness, be sure performance standards are updated at appropriate intervals and are consistent with company and/or departmental goals and budgetary objectives.
  • Review performance standards to achieve consistency for similar jobs in different departments and be prepared to justify any inconsistencies with sound reasons.
  • If employees are "paid for performance" rather than given pay increases for cost-of-living adjustments or other factors unrelated to performance, include a compensation adjustment portion in the performance review form and discuss it during performance review meeting.
  • If compensation is not linked to the performance review, use a separate form and meeting to address any compensation adjustments.
  • Consider the appropriateness of evaluating executives, managers and supervisors on achievement of affirmative action goals and compliance with anti-discrimination policies; promptness and thoroughness of investigating employee discrimination complaints; and participation in training sessions related to affirmative action goals and antidiscrimination policies. To avoid problems with credibility and perceptions of unfairness, be sure performance standards are updated at appropriate intervals and are consistent with company and/or departmental goals and budgetary objectives.
  • Review performance standards to achieve consistency for similar jobs in different

Other Tips:

Preparing for the Review

  • The evaluator should be personally familiar with the employee’s work history and current level of performance.
  • Review employee’s prior performance appraisal in order to assess employee’s progress during evaluation period in achieving current performance goals.
  • Check source documents (attendance records, production records, etc.) to be certain that the performance appraisal is accurate to avoid back pedaling" and damage to credibility and fairness of review.
  • Make defensible judgments about employee performance based on objective, underlying facts.
  • Before making any potentially defamatory statement about an employee, be certain that you have objective evidence to support a good faith belief in the statement.
  • After completing written performance evaluation, review it to determine if any statements could be misconstrued by the employee.
  • Consider if you would be embarrassed by or would regret having the review disclosed to others.
  • Prior to meeting with the employee, submit the written performance review to a reviewer who can check it for accuracy, consistency and fairness among similarly situated employees.

Conducting the Review

  • Conduct timely reviews to provide back-up documentation for discipline or discharge decisions and to avoid claims of discrimination.
  • Give the employee advance notice of the review.
  • In order to confirm its importance and to treat the employee with dignity, the evaluator should present the evaluation personally, allotting sufficient time without interruption.
  • Conduct the performance evaluation in a room that ensures confidentiality.
  • Consider the benefits of having another supervisor or member of management present during reviews.
  • Be candid -- don’t "sugar coat" work deficiencies and "pull punches" to avoid uncomfortable encounters.
  • Focus on evaluating the employee’s accomplishments rather than commenting on the employee’s personality traits or the personal characteristics contributing to his or her performance.
  • Inaccurate evaluations are worse than no evaluations.
  • Evaluate the employee’s overall performance during the entire evaluation period, rather than simply focusing on his or her most recent performance.
  • Avoid "halo" or "horn" effects from positive or negative aspects of job performance.
  • Don’t overrate the performance of long-term employees just because they should have better skills than shorter-term employees because of length of service.
  • Avoid rating everyone as "average," as this reflects an avoidance of making judgments or lack of familiarity with employee performance.
  • Give high marks only for high performance.
  • Remember that every good word in a performance evaluation will be used to the employee’s advantage in any subsequent lawsuit challenging any adverse employment action.
  • Give a balanced review, list an employee’ s strengths and weaknesses and backup conclusions with specific facts and details.
  • Review the employee’s success in achieving any performance goals set during the last performance review.
  • Be as specific as possible about any performance deficiencies, making the employee aware of any applicable performance standards and work rules.
  • Explain any changes in performance standards, especially where a new owner or new management has taken over and has different corporate objectives and budgetary goals.
  • Set specific future performance goals and let the employee know what needs to be done to achieve them before the next evaluation.
  • Give the employee a reasonable opportunity to remedy work deficiencies or work rule violations.
  • State the need for specific training, only if you can indicate how it will be attained. Do not put anything in the performance review that you do not intend to do;
  • Specify when compliance with performance goals will be reassessed, reserving the right to conduct unscheduled reviews in the event of substantial changes in performance or other special circumstances.
  • Where applicable, state unambiguously that failure to improve work performance or continued violation or work rules will result in the imposition of discipline, up to and including discharge.
  • Do not put anything in the performance review that implies that the employee can be fired only for "just cause."
  • Where employees are "paid for performance," be certain that salary increases are consistent with the employee’s overall job performance rating.
  • Be certain that your position on sensitive issues about personal appearance and personal habits is consistent with company dress code, rules of conduct, and antidiscrimination policies and practices, and handle such issues by relating them to the employee’s ability to achieve specific performance goals.
  • Afford the employee an opportunity to comment orally and in writing on the performance evaluation and ask him or her to sign off on it. Such a practice:
  • Deters biased appraisals and enables the employer to correct them at an early stage.
  • Forecloses the employee from later complaining about an unfair review.
  • Permit an employee who is dissatisfied with an evaluation to appeal to at least the next higher level of management, particularly where there has been no input in the review from higher level management.
  • If an employee’s feedback reflects inaccuracies or unfairness in the review, take immediate appropriate action to correct the review in order to demonstrate employer’s fairness and to maintain the credibility and integrity of review process.