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Revise your overly complex employee review methods

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in Discrimination and Harassment,Employment Law,Human Resources,Leaders & Managers,Performance Reviews

Issue: If your evaluation procedures are too complicated, employees may question whether they're being treated fairly.

Risk: Mild suspicions can quickly grow into expensive discrimination lawsuits, as a new court ruling shows.

Action: Head off such trouble by auditing your review process and simplifying it, if needed.

If your employee evaluation methods and rating systems generate lots of puzzled looks and questions from employees and supervisors, it's time to simplify the process.

Reason: When employees become confused about the evaluation process, they'll start to believe they aren't being treated fairly in terms of pay and promotions. That suspicion may prompt a call to an employment lawyer, who'll want to look closer at your system. Then, your organization is at the mercy of clever statisticians who will try to deconstruct your system to prove discrimination.

Case in point: Two female Quest employees suspected that the company's complicated evaluation procedure somehow discriminated against them for taking child care leave. But they couldn't pin down how. Neither could their lawyers, so they hired compensation experts to examine Quest's evaluation process.

Quest's system assigned points to track performance in seven categories, which were then weighed according to the value the company placed on each category and compared to a rolling 24-month basis. It took four experts and 16 depositions to deconstruct the process. In the end, the parties settled for about $600,000 in lost wages. The court then added almost $400,000 in legal and expert fees to Quest's tab. (Vosdingh, et al., v. Quest, No. 03-4284, DC MN 2005)

Bottom line: It's OK for evaluations to measure several different aspects of the job, but do it in a way that makes sense to employees and evaluators. If you use outside consultants to develop your evaluation process, first run the process by a test panel of supervisors and employees to make sure it makes sense and is fair.

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