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How to conduct better performance reviews

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in Leaders & Managers,Performance Reviews

You should conduct regular appraisals of your employees’ performance for two important reasons.

First, periodic and competent appraisals reduce the opportunity for a discharged employee to claim unfair treatment. The appraisal process alerts an employee to what you expect of her, where she is deficient and how she can improve her performance.

Second, the appraisals constitute documented proof of unsatisfactory performance that will help you justify employment decisions.

To make your appraisal system effective, consider adopting the following guidelines:

  • Review your evaluation techniques. Your performance standards should be quantifiable, not subjective. Standards for individuals performing the same job should be applied evenhandedly.
  • Emphasize to supervisors the importance of truthful and accurate performance reviews. Supervisors are often overly lenient when it comes to rating employee performance. But by sparing the worker’s feelings, the supervisor could be inviting trouble for his employer. In a wrongful-dismissal suit, it may be difficult for your company to explain why it discharged an employee for poor performance if he received positive evaluations.
  • Give employees the right to respond to their appraisals. A worker should have the opportunity to agree or disagree with the list of principal duties on which his performance was rated. Employees should sign a statement indicating that they have read their appraisals.

Beware risk of overly complex rating systems

You may also want to dump overly complex evaluation methods. If your rating system is too complicated for even your supervisors to understand, it’s time to simplify it.

Reason: When employees become confused about the evaluation process, they’ll start to believe that you aren’t treating them fairly. That suspicion may prompt a call to an employment lawyer, who’ll want to take a closer look at your system. Then, your organization is at the mercy of clever statisticians who will try to deconstruct your plan to prove discrimination.

In one recent case, two female employees argued that their employer was penalizing them for taking time off to care for their children. The women suspected that the company’s complex evaluation process somehow treated them unfairly, but they weren’t sure how. So they hired attorneys, who couldn’t figure it out either, so they hired experts. Four experts and 16 expensive depositions later, the process was deconstructed and the case settled for $600,000 in lost wages, plus $400,000 in legal and expert fees. It seems the process managed to count protected child-rearing time as a negative factor, proving the women’s suspicions were correct. Vosdingh, et al., v. Quest, No. 03-4284.

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