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Performance reviews: Cut liability, add punch to annual chore

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in Firing,HR Management,Human Resources,Leaders & Managers,Management Training,Performance Reviews

Your performance evaluation system probably isn't "meeting expectations" and may "need improvement."

One of the biggest problems: grade inflation. Managers routinely give employees higher marks than their performance warrants. As a result, companies struggle to justify firing an employee who appeared to be performing well on paper.

Bottom line: If your managers think of performance reviews as an annual exercise in shuffling paper to justify raises, promotions or layoffs, you've got a lot of work ahead.

Dump 'Lake Wobegon' effect

Your business isn't located in the mythical town of Lake Wobegon, where "all the children are above average."

Fair and accurate performance ratings help you document poor performance well before you fire an employee, and also give the worker a chance to improve. That's important for productivity and morale, as well as your defense in court.

Stick to facts

A well-written job description should be your starting point for an evaluation form because it outlines the expectations for the job. Allow each employee to review the principal duties on which his performance is rated, and give the worker the chance to agree or disagree about the description's accuracy.

Ask workers to submit self-appraisals to their managers in advance, perhaps using the same type of form. This can give a wider perspective.

Evaluations should be based on objective, measurable criteria and be given at regular intervals. You can stay focused on the facts by keeping an ongoing log of employee performance throughout the year. This will help you develop appraisals and defend personnel actions that might be challenged in court. (See box below.)

The person writing evaluations must be trained to be objective and consistent. This isn't the place for creativity, with attempts to find the most clever or sarcastic way to note deficiencies. You need enough detail to support the appraisal, and you should focus on the worker's results, not speculate on the causes.

Someone from top management or HR should review every draft appraisal before it is presented to the employee. The goal: Ensure that it's complete, consistent, correct and doesn't make any inappropriate comments.

Employees also should sign a statement to acknowledge receipt after they have read their appraisal. Keep employees' written responses to reviews, and document any action taken as a result.

Watch for red flags

Finally, take notice if performance ratings take a dramatic turn under a new manager. While a negative evaluation alone may not be considered an adverse employment action, a court may begin to detect discrimination if the ratings of a long-term employee take a nosedive under a new manager.

Also, keep a steady flow of comments going into the worker's file. Courts are suspicious of businesses that suddenly "paper" an employee's file just before firing him.

If an employee's performance plunges, note it before the next official round of evaluations.


Write warnings the right way

A written warning about an employee's performance should include:



  • A statement of the problem (who, what, when, where, why and how).



  • How the employee's action had a negative impact on work.



  • Company policy on the situation.



  • Reference to previous written or verbal warnings about the same or similar conduct.



  • A summary of the agreement between the supervisor and employee to correct the problem.



  • A warning of the consequences for failing to correct the problem.


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