The employment evaluation process can sometimes be an uncomfortable experience for the evaluator and employee. However, when evaluations are done in a candid, consistent and open manner, they can be useful tools that benefit both parties.
They can help the employer make informed decisions about compensation, transfers, promotions and terminations. Performance evaluations also keep the employee informed regarding the employer’s expectations and how the employee’s performance measures against these expectations. Performance evaluations can also prove to be a valuable tool in the litigation context. A performance evaluation that creates a record of an employee’s performance can help to build an excellent defense to an employment discrimination lawsuit, for example.
Since supervisors and managers generally administer performance evaluations, it is essential that they receive the appropriate training and instruction on how to perform an evaluation. Even with an established performance evaluation procedure in place, a manager who ineffectively or incorrectly performs the evaluation can make it useless or harmful to the employer and employee.
Supervisors and managers should be informed about the importance of an employment evaluation. There are several mistakes that managers typically make that can destroy or diminish the value of a performance evaluation. For instance, evaluators sometimes rate an employee’s performance as good or excellent without really considering the employee’s performance. Similarly, evaluators sometimes use the same language on each employee’s evaluation, suggesting that little time or effort was devoted to its completion. Some evaluators try to use the performance evaluation as a motivational tool or morale booster by giving the employee undeservedly high marks, which leads the employee to believe that his or her employment is secure. Thoughtlessly evaluating the employee, using form language in the evaluation or giving the employee undeservedly high marks defeats the purpose of employment evaluations and makes them less valuable or useful (and sometimes even harmful) in the event the employer is sued.
The company should give written instructions regarding performance evaluations to supervisors and managers who evaluate employees. The instructions should:
- outline the purpose and importance of performance evaluations, including the potential ramifications of a poorly administered evaluation
- emphasize the importance of honesty, fairness and consistency within the evaluation procedure
- include information regarding how to deal with potential problems in an evaluation, such as incomplete information regarding the employee or factual disputes
- require that the supervisor review the job description of the employee prior to the performance evaluation.
In addition to written instructions, the employer should provide training for managers and supervisors who will administer performance evaluations. The training should cover the evaluation procedure in detail. Such training should cover:
- how to determine appropriate criteria on which to base evaluations
- how to evaluate employees in an unbiased, meaningful and constructive manner
- how to relay positive attitudes, criticism and problem areas to employees.
The training should also address some common mistakes made during the process such as using vague adjectives that inadequately describe performance, giving undeserved praise or avoiding criticism in order to boost employee morale. It is also important that the supervisor or manager know that the employer will not tolerate any unlawful bias or discrimination in the evaluation process.
It may be advisable to require each supervisor or manager who receives a copy of the written instructions to sign an acknowledgment that they have reviewed the performance evaluation instructions and agree to follow them. The acknowledgment should also indicate that the supervisor/manager will be held responsible for conducting the evaluation process.
What evaluations should cover
Performance evaluations should be job specific. A stock evaluation form, while consistent, may be insufficient to address the performance of a particular employee. The evaluation should be based on the tasks described in the job description of the employee (see page 12, Definition of a job description) as well as job-related skills that bear on the employee’s performance. Examples of generally appropriate areas of evaluation include commitment, judgment, initiative, leadership, professionalism and knowledge of the job.
Keep in mind that the traditional adjectives used in evaluation forms such as “satisfactory” or “poor” are sometimes inappropriate. If the company uses a standard evaluation form for all or most of its employees, evaluators should indicate which categories are “not applicable” to a given employee.
Evaluations should be based on job performance, not personality traits. For an evaluation to appropriately help an employee develop, the evaluation cannot be received as an attack on the employee’s personality. Personal attacks on an employee during an evaluation can create a number of potential liabilities for the employer, including, but not limited to, discrimination claims.
It is also important that the evaluation cover all aspects of the employee’s job. An evaluation that does not cover all key functions of a job can make defending the corporation in a subsequent suit difficult. If the employee is fired because of his or her poor performance in an area that is not covered by the performance evaluation, then the employer will have no record of the employee’s poor performance. Even if the employer can show that the employee did a poor job in a specific area without the performance evaluation, it is hard to show that the poor performance was a truly important part of the employee’s job if it is not included in his or her performance evaluation.
Reviewing performance evaluations
To safeguard against bias or stereotyping by an evaluator, the company should create a system that monitors the evaluation process. Human resources or a duly authorized company representative should review all performance evaluations before they are presented to the employees. The evaluation should also be reviewed and approved by one of the evaluator’s superiors, preferably one who is familiar with the person being evaluated or the job duties of that employee. Additional levels of review decrease the likelihood of bias and reinforce the reliability of the evaluation. The employer should be mindful of the processes created by human resources and review those processes occasionally to make sure human resources is effectively evaluating employees.
The keys to a meaningful evaluation
- Be honest - A review should be honest and candid. The evaluator should resist the temptation to avoid the areas of the employee’s performance that need improvement. While it is appropriate to point out the achievements and strengths of an employee, the evaluation must also cover his or her deficiencies. Provided that the statements made are true and job related, a harsh evaluation should not serve to damage the employer in a lawsuit. The performance evaluation procedure is designed to help the employee know how he or she is doing in a job and to serve as a tool for the employer in defense of litigation. If the performance evaluation does not deliver a straightforward, honest picture of the employee’s performance, then neither goal is achieved.
- Avoid excessively favorable reviews - Evaluators are sometimes motivated to give excessively favorable reviews of employees. Some supervisors hope to avoid confrontation or an uncomfortable evaluation meeting with the employee. Other supervisors believe that an overly positive performance review is a good motivational tool. The employer should include controls in the employee review process to guard against overly favorable reviews. For instance, the design of the performance evaluation form, if done carefully, can be effective in preventing excessively favorable reviews. An effective evaluation form should provide ample opportunity for evaluations to identify specific examples of employee performance rather than allowing them to check “satisfactory” or “unsatisfactory.” Additionally, evaluation forms should require evaluators to identify areas for improvement or constructive criticism. Requiring a group of managers or supervisors to evaluate their subordinates collectively can expose evaluators who might otherwise give overly favorable reviews. Finally, occasional refresher training of supervisors and managers regarding employment evaluations can be effective in preventing inflated reviews. The employer should set expectations for the scale of evaluation ratings and communicate those expectations to the managers and supervisors. There must be room on the scale to distinguish exceptional employees and poor employees. Some companies accomplish this goal by rating satisfactory employees in the middle of the grading scale and reserving the highest grades for those who truly stand out from their peers.
- Skip the quota approach - Rigid mathematical quotas or bell curves requiring a certain percentage of employees in each evaluation category are not advised. Groups will likely have different numbers of outstanding, average or poor employees. Mathematical quotas create an unequal evaluation system from group to group. Notice that setting a quota or curve is different from setting an expected evaluation range and communicating that range to supervisors and managers. While supervisors and managers need to be informed of the standards and expectations of the procedure, they should not be forced to make artificial categorizations based on mathematical formulas.
- Keep evaluation systems/approach uniform - It is important that the rating scale of the performance evaluation be explained to supervisors and managers. The words “poor” or “satisfactory” may mean different things to different evaluators. Be sure that all evaluators have a consistent understanding of the forms, standards and terms that are used in the evaluations.
- Address strengths and weaknesses - Even when evaluating an employee with poor performance, evaluators should note any strengths that employee may have. It is also advisable to offer some type of constructive criticism or highlight areas for improvement with each evaluation. A discharged employee who brings a discrimination suit may allege that he or she was held to a different standard than other employees. Showing that other coworkers receive criticism in their evaluation can help diffuse such an allegation. Including criticism in performance evaluations also helps to establish a pattern for good employees whose performance deteriorates later on. If the employee is discharged because of poor performance, it may help to show that this problem existed in the past as well, though not acutely enough to warrant discharge.
Documenting and retaining evaluations
It is important that performance evaluations be carefully documented. An evaluation is of little use if there is no documented record of it. A consistent system of documentation should be a fundamental step in any performance evaluation procedure.
If performance evaluations are used to make compensation decisions, consider retaining evaluations supporting those compensation decisions indefinitely. The Lilly Ledbetter Fair Pay Act makes it easier for current and former employees to challenge pay decisions made in the distant past – even those that occurred many years earlier. Maintaining and retaining performance evaluations will help to build a defense to any future lawsuit by showing that the compensation decision was based on performance rather than any bias or stereotype.
Employers may require employees to sign an acknowledgment indicating that he or she has read the evaluation. This prevents the employee from claiming ignorance as to the criteria or results of the evaluation. It also can provide proof of fairness, evidence that the employer has engaged in the interactive process with the employee and can potentially alert the employer to additional problems with the employee.
The employee should also be given the opportunity to write a response to his or her evaluation. This improves employer-employee communication and often creates a record of the employee’s assent to the evaluation. Should the employee refuse to sign his or her evaluation, the manager should note such refusal on the form itself to provide a record that the employee was given a chance to review the evaluation.
The employee should also have the opportunity to agree or disagree with the job criteria for which he or she is evaluated. If the employee agrees with the duties being described, then there can be no dispute regarding the scope of the evaluation. If the employee disagrees with the evaluation, then the employer has the opportunity to change the criteria of the evaluation or reintroduce the employee to the duties of his or her job.
To the extent that performance evaluations are used as an opportunity to motivate an employee to reach some stated goal, acknowledgment of that goal should also be made on the evaluation.
For example, if the supervisor and employee agree that the employee has frequently been late for work and that the employee must work harder to be on time, then the goal of better punctuality should be noted on the evaluation. Goals should be measurable in nature to facilitate ease in future performance reviews.
When not to evaluate
Though performance evaluations can be helpful in improving employee performance and defending against litigation, they should not be used at all if certain elements of the procedure are missing. Remember, although an employee evaluation is a confidential document, a poorly drafted evaluation can be used by the employee against the employer should the employee file a lawsuit. The following are examples of crucial omissions from the evaluation procedure that render the evaluation useless or even harmful to the employer:
- inconsistent performance reviews among employees
- poorly defined or non-job-related performance criteria
- undocumented performance evaluations
- unclear delineations of employee deficiencies
- failure by the employer to follow up on or enforce performance goals set in an evaluation.