The Performance Appraisal: A Legal And HR Tool

September 10, 2016

Topics: Terminating Employees

Conducting an appraisal of an employee’s performance gives you an opportunity to discuss goals and set objectives, and permits you to offer one-on-one feedback that clarifies for the employee exactly what is expected of him or her.  Documenting a performance appraisal in writing can help you to establish a credible history of an employee’s problems, which can be valuable in defending yourself against an employee’s later claims that a termination was for a discriminatory reason, rather than on the basis of his or her performance.

Employers typically attempt to evaluate new hires three to six months after they commence employment, and all employees on at least an annual basis.  Do not wait for an annual appraisal, however, to let an employee know how he or she is doing—good or bad.  Day-to-day problems should be addressed as they come up, and not ignored until it is time for the annual appraisal.  Positive actions should be similarly acknowledged.

Comments in job evaluations should always be job-related and conducted by individuals with direct knowledge of the employee and his or her job description – and never done on any basis that could be viewed as discriminatory, for example referencing an older working “slowing down” or a pregnant employee performing poorly because of her condition.  It is important to make certain that all managers and other evaluators have a clear idea of what constitutes “satisfactory” and “unsatisfactory” performance, and that there is consistency from manager to manager in the way they assess employees.

Documentation of a performance appraisal should be done in a standard form that is designed to be objective and thorough.   While there are many performance appraisal systems and products available, from a legal standpoint an appraisal form should include:

  • the name of the employee
  • the date of the performance appraisal meeting
  • the interval the appraisal covers
  • a rating system for the various performance elements and skills that are essential to the job, if one is being used
  • space for management comments on these performance elements and skills
  • space for overall management comments
  • space for management to describe performance improvements required, and/or to outline an employee “action plan” going forward
  • space for employee comments regarding the appraisal overall and anything needed to accomplish the goals for the year
  • signature blanks for management and the employee (and language confirming that the employee has seen the form)

The appraisal process should include some provision for employee recourse.  This can be in the form of space on the form for employee comments, as noted above, or some other process that permits an employee to submit his or her comments about the appraisal.

Employees should be given advance notice of a performance appraisal, to give them an opportunity to organize any thoughts they wish to share with management.  Appraisal meetings should be held in a private place, free from interruption, and the meeting should be focused solely on employee performance, and not degenerate into a discussion of general business matters.

Lastly, it is very important that performance appraisals be used as a reasonably honest communication of employer satisfaction and/or dissatisfaction with the employee’s work.  When an employee is fired after a series of glowing performance appraisals, it can give credence to the employee’s claim that the termination was not performance-related, but for an illegal reason.  Likewise, a record of poor performance reviews accompanied by a history of substantial pay raises may suggest to a court that the performance reviews were disingenuous, and that a termination may have been made on another basis.

Performance appraisals can be an excellent tool for assuring that the mutual needs of employers and employees are consistently met.  When done with an eye to the legal issues involved, performance appraisals can also provide an employer with valuable protection in case of termination-related employee claims.