Inflated Evaluation Deflates the Company’s Wallet — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Who likes confrontation at work? Yet that fear of confrontation can drive a manager to write a glowing evaluation for an average or poor-performing employee—just to avoid conflict and hurt feelings. One court recently warned managers to get over the fear and document accurately… or you’ll lose key legal defenses needed to win discrimination lawsuits.

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Case in Point: Susan Cutcher, a sales clerk at a K-mart store in Michigan, received wonderful evaluations year after year. Cutcher’s supervisor ranked her as one of the top employees in the store. It was a total lovefest. But, as many love stories do, this one didn’t’ have a happy ending.

Cutcher requested and was granted six weeks of FMLA leave to recover from surgery. While she was on leave, Kmart initiated a reduction in force. Supervisors wrote new evaluations ranking all store employees to determine the unlucky six associates to be laid off.

Cutcher's boss ranked her as one of the lowest performing employees (47th out of 51). So Cutcher was RIF’ed despite being ranked as "exceeds expectations" in her annual performance review just 20 days earlier. On her RIF review, her supervisor wrote this comment next to her name: “Poor customer and associate relations. LOA.” 

Cutcher sued Kmart, claiming the company discriminated against her for exercising her FMLA rights. The company denied the claim and argued Cutcher justifiably deserved to be RIF’ed because she had poor customer service skills and resisted accepting management decisions. Why wasn’t Cutcher warned about these issues earlier? The manager acknowledged that she “did not like confrontation and often gave higher evaluations than employees deserved.”

And what about the “LOA” (leave of absence) note on the RIF form? The supervisor said she innocently wrote it as a “note to self” to remind her to terminate Cutcher after she returned from leave, not as a cause for the termination. (Cutcher v. Kmart Corp., 6th Cir., 2/1/10).

What happened next … and what lessons can be learned?

While a lower court shot down the case, a federal appeals court sided with Cutcher and sent the case to a jury trial. It said Cutcher’s performance was consistently documented as good until she went out on leave. Maybe the manager did not think Cutcher’s performance was so great, but that’s not what she wrote. Further, a jury could reasonably interpret the “LOA” note as the real reason Cutcher was let go.

3 Lessons Learned … Without Going to Court

1. Overcome fear. Fear of confrontation when giving a performance review is merely a feeling in your head; but confrontation in a courtroom is the real thing in your face. Help supervisors overcome that fear and see the potential consequences of overly sunny reviews.

2. Evaluate fairly. Tell it like it really is. Accurate documentation will support lawful acts of termination.

3. Avoid ambiguity. Always reread your documentation with a critical eye, like a jury member who sympathizes with employees … not employers!

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