Performance evaluations are useful tools for both the employer and the employee. Evaluations assist the employer to make informed decisions regarding an employee’s terms of employment such as compensation, transfers, promotions, and terminations. They further keep the employee informed of his or her progress, including areas in need of improvement.
Performance evaluations also serve as an outlet for documentation, helping employers to avoid and defend against employee claims. A performance evaluation that creates a record of an employee’s strengths and weaknesses helps the employer build a strong defense to potential employment claims that may arise.
The employment evaluation process is sometimes an uncomfortable experience for the evaluator and employee. However, when evaluations are done in a candid and consistent manner, they benefit both parties. While there is no requirement under Massachusetts or federal law that an employer should conduct evaluations, they are an important component of the employment relationship, and should be incorporated into standard personnel procedures.
Because supervisors generally administer performance evaluations, the employer should appropriately train and instruct them on the process. Even when an employer establishes a standard procedure for evaluations, an uninformed manager may render the evaluation process useless or even harmful to the employer without proper instruction.
The employer should inform supervisors of the importance of performance evaluations, and of common mistakes in the process. Evaluators often make mistakes such as:
These types of mistakes defeat the goals of the evaluation. First, by failing to provide constructive feedback, they do not give employees an opportunity to learn or to improve their performance. Second, as they are not an accurate portrayal of the situation, they negate any value documentation may have held for litigation-defense purposes.
The company should give written instructions regarding performance evaluations to supervisors who evaluate employees. The instructions should:
Each supervisor who receives a copy of the written instructions should sign an acknowledgment that she or he has reviewed the instructions and agrees to follow them.
In addition to written instructions, the employer should provide training for supervisors who administer performance evaluations. The training should cover the evaluation procedure in detail, and should specifically outline:
The training should also address the common mistakes made during the process as described. Finally, the employer should emphasize that it will not tolerate any bias or stereotyping in the evaluation process, and remind supervisors to be cognizant of their own unintentional biases.
Performance evaluations should be based on the employee’s specific job. A formulaic evaluation form, while consistent, may be insufficient to address specific performance issues across a range of positions. A proper evaluation form reflects the tasks described in the job description of the employee (see, Job description in Recruiting and hiring), as well as job-related skills that bear on the position. Keep in mind that the traditional adjectives used in evaluation forms such as “satisfactory” or “poor” are, at times, 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.
The employer should draft its evaluations to reflect job performance, not personality traits. An evaluation that assesses an employee’s personality traits may be perceived by the employee as a personal attack. In turn, this type of employee reaction may create potential liability for the employer, such as claims of unlawful discrimination.
The employer should also attempt to cover all aspects of the employee’s job in its evaluation. An evaluation that does not cover all key functions of a job may create problems if the document becomes relevant in later litigation. If an employer fires an employee because of poor performance in an area, however, the performance evaluation is silent on the issue; and the employer will have a less of a defense to its actions. Even if the employer shows that an employee did a poor job in a specific area without the performance evaluation, it will have difficulty showing that the poor performance was an important part of the employee’s job if the function is omitted from the performance evaluation.
To ensure against bias or stereotyping by an evaluator, the company should create a system to monitor the evaluation process. Human resources should review all performance evaluations before the supervisor presents it to the employee. In addition, the supervisor should have one of his or her superiors, preferably one who is familiar with the person being evaluated, review the evaluation. When an evaluator obtains other additional levels of review, this decreases the likelihood of bias and reinforces the reliability of the process.
The employer should be accurate in its evaluation, and should not be tempted to exaggerate any praise. It should further design its evaluation form so that the supervisor has several opportunities to identify specific examples of performance, rather than simple “satisfactory” checkboxes.
In addition, evaluation forms should require evaluators to identify areas for improvement or constructive criticism. Another helpful step is to have several supervisors work together to evaluate employees.The employer should set expectations for the scale of ratings in evaluations, and communicate those expectations to 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 grade for those who truly stand out from their peers:
To ensure against bias or stereotyping by a manager, the company should create and implement procedures for monitoring the evaluation process. For instance, Human Resources personnel should review all performance evaluations before they are presented to the employee. In addition, each evaluation should also be reviewed and approved by one of the evaluator’s superiors, preferably one who is familiar with the person being evaluated and the job duties of that employee. Additional levels of review decrease the likelihood of bias, increase the chances that discrepancies will be detected and corrected, and reinforce the reliability of (and the employees’ confidence in the fairness of) the evaluation.
Once the employer has established and implemented an evaluation monitoring system, it should periodically audit the system to ensure that it is effectively creating a consistent and fair evaluation procedure for all employees.
Many companies ask employees to perform a self-assessment as part of the evaluation process. Although self-assessments are not recommended for all job categories, they can improve management outcomes in three ways:
Before implementing a self-assessment requirement, however, employers should consider the possibility that its evaluators may be influenced or even intimidated by the employee’s over-valuation of his or her performance, potentially resulting in an inflated and less valuable assessment that could cause problems for the employer when and if it needs to address deficiencies in the employee’s performance.
Performance evaluations should be carefully documented. An evaluation is of little use if there is no record of it. A consistent system of documentation is a fundamental step in any performance evaluation procedure.
If the employer uses performance evaluations to make compensation decisions, it should consider retaining those evaluations indefinitely. A law was passed in early 2009 that now makes it easier for current and former employees to challenge pay decisions made in the distant past – even those that occurred 10 or 20 years ago. An employer who retains old evaluations will be better equipped to defend its history of compensation decisions.
The employer should request that the employee sign an acknowledgment that she or he has read the evaluation. This step prevents the employee from claiming lack of knowledge of any performance deficiencies. 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 employer may also want to give the employee an opportunity to respond in writing to the review. This invitation may improve the communication between the employer and employee or, at the very least, clarify each parties’ positions on the employee’s performance.
The employer should also give the employee the opportunity to assess the job criteria on which she or he is measured. If the employee agrees with the duties as described in the form, then the employer may avoid later disputes concerning 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. In short, to the extent that the employer is able to include the employee in the review process, the process will be more helpful to both parties.
Though performance evaluations are helpful to improve employee performance and defend against lawsuits, the employer should refrain from using them if they are poorly drafted or carried out without proper instruction. Employers should be wary of the following common pitfalls as they may increase the likelihood of litigation: