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Getting Performance Reviews Right

The must-haves of a legally defensible performance review.

April 26, 2001
Related Topics: Miscellaneous Legal Issues, Performance Appraisals
Reviewing employees' performance is always a nettlesome project -- and it'sbecoming even more so. In the past year, a spate of lawsuits has cropped up overperformance appraisals, claiming unfairness to women, minorities, and olderworkers. The presence of these suits highlights the potential formisunderstanding or mistakes to enter the equation -- and the dangerous nature ofappraisals that become too subjective. Carole O'Blenes, a partner in the NewYork City office of Proskauer Rose, offers her own appraisal: the must-haves ofa legally defensible performance review.

What are the general characteristics of a good, legally defensible performance appraisal?
First, the behaviors and traits on which people are being evaluated should bejob related. Second, from a purely legal perspective, to the extent possible, aperformance evaluation based on objective criteria is more likely to reduce thelegal risks.
What about employees whose jobs are more esoteric?
Depending on the nature of the job, I think it's unavoidable to have somesubjective measures. There are certain kinds of jobs where it's just verydifficult to objectify all the criteria. Although to the extent that an employerengages in management-by-objective, you can evaluate people on (whether) they'veachieved the objectives that were established for them.
If you establish specific objectives for employees and make them clear inadvance, I think that's a tremendous advantage in terms of being able to justifyand defend your performance appraisals after the fact.
Would you advise managers to undergo training on how to properly conduct appraisals?
It's important for managers to be trained in conducting performanceappraisals so that they're familiar with the instrument -- what the various termson it mean and what the ratings mean and so on. Just because people happen to begood workers doesn't mean that without any training they're good (appraisers).
From a legal point of view, how often should they be conducted?
They need to be done consistently and in a timely fashion. A lot of times,managers don't view performance appraisals as part of their work, so it's thesort of thing that gets put off -- particularly if the reviews are going to becritical. They're not pleasant things to do, so people avoid doing them. So alot of times, a company has in place a performance-appraisal system, but theextent to which they're actually done may be very spotty. You may have onedepartment where they're done pretty regularly and another where they're notdone at all.
This can be a problem legally?
It can be a problem. Sometimes, for example, employee handbooks state thatemployees will be evaluated periodically -- annually or semiannually. If anemployee is discharged and contests the discharge, it may be difficult for theemployer to explain why the employee didn't get the performance appraisal whenhe or she was supposed to. Also, even though they may be done only once a year,employees shouldn't be surprised when they sit down to get their appraisal. Ifthere's a problem, the employee should have had some sort of feedback on theway, rather than waiting for the formal appraisal at the end of the year.
Is it legally wise for employers to work with employees to create their objectives?
In so many jobs -- especially white-collar workplaces -- it's very difficult to beobjective about the standards. There's an amount of subjectivity that's inherentin the job, and inherent in the evaluation. The notion of working with theemployee to establish objectives for the upcoming year is very useful for tworeasons:
No. 1: Everyone likes to be clear about expectations. Ifemployees aren't clear about expectations, it's very difficult for them todeliver what's expected.
No. 2: Everybody feels better about their workplace ifthey have some control over it, and an element of participation in establishingwhat the standards are. So there's a tremendous employee-morale plus in havingemployees involved in determining the objective.
What about multi-source appraisals -- those seem particularly likely to be subjective.
Most employers use these to obtain candid and frank evaluations, whichsometimes requires those reviews to be done on an anonymous basis. On the otherhand, you want to avoid giving people a cloak by which they aren't accountablefor what they say. One way to look at the evaluation is to check whether it'strue and accurate. Another way is to say if that's what the person's perceptionis, it is accurate in the sense that it's a person's perspective.
What about certain wording, like rating employees on enthusiasm oraggressiveness -- phrases that are subjectiveor can potentially be considered to work against a certain gender or race or age group?
It's preferable from a legal perspective that performance appraisals focus onbehaviors rather than attitude. So instead of rating someone on enthusiasm, youcould phrase it in terms of behavior, like takes on extra responsibility. Askwhat enthusiasm really means, why it's important. Then translate that in termsof behavior.
If you (ask managers) to rate someone on enthusiasm, they have todo it in an impressionistic way -- their impression of how enthusiastic this personis. If you instead define this in terms of behaviors, you're forcing themanagers to be specific and concrete about the things on which they'reevaluating the person. Then they're not just evaluating an impression, butspecific behaviors that are job-related. That's certainly easier to defend froma legal perspective.
Any other trouble spots of which HR should be aware?
There's one thing managers often do on performance appraisals that theyshould stay away from. Instead of talking about behaviors, they talk about whypeople are behaving a certain way. Generally speaking, that's not appropriatefor performance appraisals.
If somebody is not working in a timely fashion,managers shouldn't guess at why that is. It's better if the manager just stickswith the facts and the behavior, which is: deadlines aren't being met. Ask theemployee what's the problem rather than speculating on the employee'smotivation. Because once the manager does that, it tends to get into personalthings instead of job-related things -- and that's to be avoided.
What if, after a round of appraisals, HR finds that a large number of womenor minorities received poor reviews?
If it was my company, I'd be concerned about it. It makes a tremendous amountof sense for HR professionals in a centralized way to be looking at appraisalsfrom across the company. If they see an indication (of poor appraisals alonggender or race lines), HR should try to figure out why that is. Examine thoseappraisals very carefully to see if there are criteria being applied that have adisparate impact on people.
Go back to the managers involved and talk over thoseappraisals with them. I think of it as a kind of proactive approach to make surethat the company's Equal Employment Opportunity policy is really being carriedout in every aspect of employment.
And what should HR do if the appraisals simply identified poor performers who happen to be women or minorities?
It may well be that just by happenstance you have three women who got lousyreviews -- because you happen to be stuck with three women who are lousyperformers. That can happen as easily as having three males who are lousyperformers. It may turn out that HR does its reviews, talks to the managers, anddecides the company can defend the reviews.
But you don't have to wait untilyou're hit with a lawsuit -- or those women are being fired -- before saying,"Gee, did we do something wrong here?" You know in advance. You'velooked at it so that if there's a mistake, you can correct it, and if thereisn't, you're in a position to defend it. You know where you stand.

Workforce, May 2001, pp.76-78 -- Subscribe Now!

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