The end of the year is a time that’s both hectic and reflective, and it’s that reflective thinking that’s put to use in evaluating employee performance. Whether evaluations are done at the end of the year, the beginning of a new year, or at various times, it’s important to keep the basics of legally sound evaluations in mind. 
Just how to conduct evaluations is always the subject of debate. Some in the human resources field advocate sticking with traditional rating systems while others urge doing away with formal annual reviews entirely in favor of a different kind of feedback.
Regardless of what philosophy is followed, it’s important for HR to make sure supervisors and managers understand the danger of faulty appraisals since discrimination and wrongful discharge claims often stem from performance reviews.
Honesty is best policy
Attorneys called on to defend employers in legal claims see it frequently: An employee turning out unsatisfactory work is terminated because of performance, often after repeated warnings, but the employee claims the firing is a pretense for an unlawful reason. The fired employee produces performance reviews indicating satisfactory performance.
Mark Schorr, a senior partner in the law firm of Erickson & Sederstrom, P.C. in Lincoln, Nebraska, says discrimination and wrongful termination claims involving performance evaluations happen “all the time.” The employee may be a poor performer who fails to accomplish goals, is disruptive, and has other performance problems, but such an employee’s reviews “look middle of the road.”
Even though with at least some documented justification for a termination, the employer is faced with “huge evidentiary problems” if the fired employee sues and uses satisfactory performance reviews to make a case. A disconnect between write-ups and performance reviews can make it look like the employer is using write-ups as a pretext for an unlawful firing.
David M. Stevens, an attorney with Whiteford, Taylor & Preston in Baltimore, Maryland, agrees that satisfactory reviews can doom an employer’s defense. “If the employee has a history of uniformly positive reviews, it will be very difficult for the employer to show that the employee was not meeting the employer’s legitimate expectations and that performance was the true basis for the adverse action,” he says.
Jeffrey S. Beck, an attorney with Faegre Baker Daniels in Indianapolis, Indiana, stresses the importance of documenting poor performance. “Generally, supervisors are busy, nice people who do not want to hurt others’ feelings, want to be liked, and dislike confrontation,” he says. “As a result, evaluations of poor performers can often make their way to the bottom of a supervisor’s to-do list.”
Beck says too often, supervisors assume poor performers already know they’re not meeting expectations and so the supervisors don’t document problems, allowing the issues “to become more ingrained.” Not addressing problems in evaluations makes it difficult to justify later corrective action and/or termination.
“In many instances an employee will argue that because the employer expressed no dissatisfaction … the adverse employment action must have been based on other factors such as a protected classification or some protected activity,” Beck says. Even though a supervisor may be uncomfortable writing an honest evaluation on a poorly performing employee, the problems need to show up in the appraisal.
“To meet their initial burden in any discrimination case, an employee must present evidence that they were meeting the employer’s legitimate expectations,” Beck says. “Evaluations that show an employee requires improvement or is not meeting expectations can prevent an employee from meeting their burden. A supervisor who does not provide honest evaluations for poor performers is throwing away the employer’s ability to prevail on this element.”
Evaluations for good performers provide an opportunity for supervisors to recognize and reward those who elevate the organization, Beck says. “Retaining star performers is critical to the organization’s and the supervisor’s success.”
Be on time
Late reviews can be as dangerous as less than honest appraisals. “If a review is late, and the employee is terminated before it is completed, the review is a lost opportunity to generate evidence as to the employee’s performance issues, which could be critical if the employee makes a legal challenge to the termination decision,” Stevens says. “Additionally, if an employee is not reviewed and is later turned down for a raise or promotion, the employee may perceive that they have not been given a fair opportunity.”
Schorr agrees that employers must have a schedule and conduct evaluations on time. “I think they’re a good tool, but if they’re not going to be done properly and accurately and you’re not going to adhere to your stated schedule and frequency, you ought not do them at all,” he says.
Train reviewers
Stevens points out that reviewers need training on how and when to conduct evaluations. Reviewers also must be held accountable. “Managers should be informed that if the company later finds that an employee can’t adequately perform their duties but the manager has been giving that employee positive reviews, the company will hold the manager accountable for not making it aware of the issue,” he says.
Reviewers also should be trained what not to put in evaluations. “One point that often gets overlooked relates to attendance,” Stevens says.
For example if an employee has been missing work under the Family and Medical Leave Act (FMLA), “the employee’s score should not be downgraded on that basis, nor should the reviewer include comments such as ‘misses too much time.’ If the employee is later terminated, such comments can provide grist for a claim that the true motive for the termination was retaliation for the employee’s use of FMLA leave,” Stevens says.
Schorr also stresses the need for HR to train supervisors and managers who are responsible for evaluating employees. It’s HR’s job to “constantly remind them that evaluations are critical evidence in employment claims,” he says.