Performance Reviews

Ah, the “halo effect”—the practice of inflating an employee’s annual review to increase morale and avoid the unpleasantness of pointing out underperformers’ weaknesses. Too bad the halo strategy sparks legal risks.

In order for a company to succeed as a whole, its managers need to help their individual employees succeed by effectively managing their performance. All managers can benefit from these reminders during reviews.

If you dread administering performance reviews, you may sugarcoat your appraisals by telling employees they’re doing “great” when they need to improve. Dishing out undeserved praise can backfire. By giving honest, thorough appraisals, you can avoid these traps.

If a former employee sues after being fired for poor performance, his attorney will almost certainly ask to look at past performance appraisals. Any that indicate the employee had previously been doing a good or excellent job may be used against you as proof the employee was fired for illegal reasons.

When it comes time to writing performance evaluations, it’s best to stay away from broad generalizations about the employee’s work. Instead, provide concrete examples that support your stated performance rankings. Follow these guidelines for writing evaluations.

Q. The mother of a minor employee (age 16) has asked to attend her child’s performance evaluation meeting. Do I have to legally allow the parent to sit in on this session?

If you give somebody a bad grade without explanation, that’s not acceptable, says Laura Yecies, CEO of online storage service SugarSync. Yecies fights the impulse by reading every performance review—not so much to see if she agrees with the assessment but to check whether the manager is being thoughtful.

Most HR professionals assume that a warning letter isn’t an adverse employment action and there­­fore can’t be the basis for a lawsuit. And that’s largely true. But if the warning letter also mentions restrictions on how well the employee will be rated at evaluation time, there may be trouble.

Employees who lose their jobs have an incentive to sue—and they’ll often look for evidence of discrimination to form the basis of their lawsuits. But to win in court, employees have to show they were meeting their employer’s legitimate expectations. That’s hard to do if the employer can show the employee admitted her shortcomings.

Not every new hire works out. Chances are, you’ll realize early on that you made a hiring mistake. You’ll want to give the employee a chance to improve, but you’ll also want to protect the company in the event of a lawsuit. To do that, provide a detailed and thorough performance review that includes specific examples and suggestions.