Despite the fact that no law requires companies to conduct performance reviews, the practice comes with some legal risks.
by Ladan Nikravan
September 29, 2013
Despite the fact that no law requires companies to conduct performance reviews, the practice comes with some legal risks. Here are the most common:
Over-evaluation: Say a mediocre employee is evaluated as meeting a standard, and then let go. The evaluation could be used to suggest the real reason the employee was let go is not performance but bias. In this case, the evaluation document supports the pretext argument.
“Why do supervisors elevate their ratings? Desire not to confront. Desire not to have a difficult conversation,” said Jonathan Segal, a partner at law firm Duane Morris in Chicago. “But what happens when a manager has to let the two weakest links go, and everyone got a ‘four’ on their evaluation, and the two let go are African-American? It looks like bias. It could be bias, but it also could be over-evaluation.”
Proxy adjectives: The use of general labels can be proxies for illegal bias. Evaluations should focus on behaviors and not labels to avoid actual or perceived bias and to provide employees with notice of what needs to be improved.
“Provide feedback, because the goal is to help the person improve,” Segal said. “You need documentation to defend yourself if there’s an adverse action because a person doesn’t improve. By providing comments instead of general labels, such as emotional or rigid, you minimize what could look like bias.”
No evaluation: To employees, Segal said the absence of an evaluation means they are doing just fine. “If you then let the employee go for performance, the employee is surprised, which turns into anger, which results in visits with lawyers,” he said.
Failure to communicate results: Michael Cohen, also a partner at Duane Morris, said he encourages clients to include a line on the performance appraisal that says, “By signing this document, you are not agreeing to its contents, you’re simply acknowledging you received the document.” If an employee refuses to sign it, Cohen suggests emailing the appraisal to the employee and clearly stating in writing that he or she was offered to sign it but refused.
“Don’t worry about whether the employee agrees with it,” he said. “My assumption is when the manager sits down to do this, takes his or her time, the contents are accurate. You’re never going to get 100 percent agreement for employees, and you’re not looking for that. What you are looking for is being able to prove, in case it goes to court, that the employee appraisal was communicated.”