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Performance evaluations — Minnesota

The performance 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 benefit both parties. Although there is no requirement under Minnesota or federal law for employment evaluations, evaluations are an important component of the employer/employee relationship and should be treated accordingly.

At the same time, employers should recognize that surveys show that neither employees nor their managers generally like the performance appraisal process. It is difficult to design a flawless performance appraisal system, although it is quite easy to identify flaws with what most employers are doing. If the system doesn't work well in your company, you may want to consider alternatives. Performance evaluations are recommended.


  • Performance evaluations help the employer make informed decisions regarding important employment matters such as compensation, transfers, promotions, layoffs and termination.
  • They keep the employee informed regarding job performance, including areas where improvement is needed.

Performance evaluations are also important, however, in avoiding and defending against litigation. A performance evaluation that creates a record of an employee’s performance can help build an excellent defense to an employment discrimination lawsuit. On the other hand, inaccurate performance reviews or a performance evaluation system that is not taken seriously by management can result in poor employee morale or lowered employee performance and can give rise to lawsuits when employees are disciplined or terminated. As a result, managers and supervisors need to understand the importance of a performance evaluation.

There are several mistakes that managers make that can ruin the value of a performance evaluation, defeating both the evaluative and litigation-defense purpose of employment evaluations. For instance:

  • Evaluators sometimes rate an employee’s performance as “good” or “excellent” without really considering the employee’s overall performance or because they seek to avoid confronting difficult personalities.
  • Evaluators sometimes use the same language on each employee’s evaluation, suggesting that little time or effort was devoted to the evaluation's completion.
  • 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 employment is secure or that a raise or promotion is deserved.
  • Evaluators sometimes base their performance reviews solely on the most recent time period without reflecting upon the employee’s overall record during the entire time covered by the review, thus leading to distorted or misleading results.

Supervisor instruction and training

Because supervisors and managers usually administer performance evaluations, it is essential that they all receive the appropriate training and instruction. Even with an established performance evaluation procedure in place, a manager who ineffectively or erroneously performs the evaluation can render it useless or, even worse, harmful to the employer and employee.

The company should give written instructions to supervisors and managers who evaluate employees regarding performance evaluations. 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, objectivity, and consistency within the evaluation procedure
  • include information on how to deal with potential problems in an evaluation, such as incomplete information regarding the employee or factual disputes
  • provide definitions of key terms so that there is greater consistency in ratings across departments
  • require that the supervisor review and, if necessary, update the job description of the employee prior to the performance evaluation.

While not required, some companies have found it useful if supervisors or managers who receive a copy of the written instructions also sign an acknowledgment that they have reviewed the performance evaluation instructions and that they agree to follow them. The acknowledgment should also indicate that the supervisor/manager will be held responsible for the evaluations the supervisor/manager conducts

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, as well as address some common mistakes made during the process. It is important that the supervisor or manager know that the employer will not tolerate any bias or stereotyping in the evaluation process.

The scope and tone of an evaluation

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, as well as on job-related skills that bear on the employee’s performance. Similarly, to the extent reasonably possible, an employer should use objective criteria in the evaluation process, as subjective criteria are difficult to verify and to apply uniformly throughout a company. 

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 help an employee develop appropriately, the evaluation cannot be received as an attack on the employee’s personality. Personal attacks on an employee in an evaluation can create a number of potential liabilities for the employer, including discrimination claims if the criticism is arguably based on a stereotype or some legally protected conduct such as leave under the FMLA. At the same time, an evaluation should not overlook negative behavior caused by an employee’s conduct. The evaluation should cite the behavior to be corrected, not the personality trait that caused it.

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 lawsuit difficult. If the employee is fired because of 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, it may be hard to show that the poor performance affected an important part of the employee’s job. After all, if it was so important, why was it not included in the performance evaluation?

Ensuring objective performance evaluations

To ensure against bias or stereotyping by an evaluator, the company should create a system that monitors the evaluation process. The human resources department or a member of senior management should review all performance evaluations before they are presented to the employee. 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 consistency and reliability of the evaluation. By having the evaluator’s manager review the evaluations, the manager can in turn provide a performance appraisal of how well the evaluator took the process seriously and adhered to the company’s requirements.

Self-assessment evaluations

Many companies ask employees to perform a self-assessment as part of the evaluation process. Although this is not to be recommended for all job categories, it does provide several useful opportunities to improve management outcomes. First, it forces employees to think about their performance in the context of their own job description. Second, the information that employees offer in a self-evaluation can offer management insight into how to motivate a better job performance. Third, sometimes employees have a wholly unrealistic understanding of their value to the organization. By identifying this through a self-evaluation process, the employer can work to adjust expectations and guide an employee to a better understanding of what is expected. On the other hand, some managers can be intimidated by the employee's overvaluation of job worth and thereby produce a less valuable evaluation.

The keys to a meaningful evaluation

  • Be honest - A review should be honest and candid. 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 the deficiencies. Provided that the statements made are true, even a harsh evaluation cannot give rise to a valid defamation claim against the employer. Harsh or cutting statements may, however, reflect poorly on the evaluator and may be used as evidence in a subsequent lawsuit to try to prove that the evaluator was biased against the employee. Remember that the performance evaluation procedure is designed to help employees know how they are doing in their jobs, as well as to serve as a tool for the employer in defense of litigation. If the performance evaluation does not deliver a straightforward, candid picture of the employee’s performance, then neither of those goals 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 to boost the morale of an employee. Still others give positive reviews because they do not want to see their direct reports receive lower salary increases compared to the direct reports of other managers who are known as easy graders in the evaluation process.

    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. Also, 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 generally are not advised. Groups will likely have different numbers of outstanding, average, or poor employees, and 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 a mathematical formula.
  • Keep evaluations 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 the employee may have. It is also advisable to offer some type of constructive criticism to each evaluation. A discharged employee who brings a discrimination suit may allege being held to a different standard than other employees. Showing that this employee received some positive comments while other coworkers received criticisms in their evaluations can help diffuse such an allegation. Including honest criticism in performance evaluations also helps to establish a pattern for good employees whose performance later deteriorates. If the employee is discharged because of poor performance, it can help to show that this problem existed in the past as well, although not acutely enough to warrant discipline or discharge. This evidence is especially valuable in defending against retaliation claims. 
    Consider using a performance improvement plan to address any area of the evaluation that is less than satisfactory. Even though an employee may be an above average performer, there may be some aspect of performance that is less than acceptable. Managers are often quick to pass over these deficient areas and just mark them as “meets expectations” or some similar category. Later, if that employee has lost favor in management’s eyes, it is difficult to justify a termination by pointing to a continuation of behavior that was treated as acceptable in the past.
  • Avoid criticisms of legally-protected conduct - Evaluators can inadvertently create liability for the company if they rate an employee poorly because of some legally-protected reason. For example, if the employee is rated as having an unsatisfactory attendance, the employee may have a valid claim if some of the absences were authorized under the Family and Medical Leave Act (FMLA). Having someone from human resources monitor all evaluations can provide a corrective lens before the evaluation is finalized and presented to the employee.

Signing an acknowledgment

Performance evaluations should 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.

The employee should have the opportunity to review the completed evaluation and comment on it. Allowing the employee to review the evaluation provides evidence of procedural fairness and can potentially alert the employer to additional problems with the employee. It can also expose problems in the way the job duties have been described, the training the employee has been trained, or the way that the manager has treated the evaluation process. 

The employee should also have the opportunity to disagree or agree with the job criteria on which the evaluation is based.  Jobs change over time, and the job descriptions do not always remain current. If the employee disagrees with the duties being described, then it is important to resolve any disputes as early as possible. Before the evaluation process is complete, there should be a general agreement over the scope of the employee’s duties and the relative weight that each is given in the evaluation of job performance. If the employee disagrees with the evaluation, then the employer has the opportunity to review the description of the job duties to ensure that the description accurately describes the job that the employer wants to have done. Often, this process results in having the employee undergo additional training to understand the requirements and expectations of the job. 

The employee should sign an acknowledgment upon reading the evaluation. This prevents the employee from claiming ignorance as to the criteria or results of the evaluation. The employee should also be given the opportunity to write a response to the review. This improves communication between the employer and employee, and creates a record of the employee’s assent to the evaluation. If the employee refuses to sign the acknowledgment, the employer should note that on the form and have that witnessed. The form should indicate that signing for receipt does not necessarily imply agreement. This kind of language minimizes the chance that an employee will refuse to sign.

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. If, for example, 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. The form can also identify training opportunities that the employee should pursue over the coming year.

When not to evaluate

Although 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, even though an employee evaluation is a confidential document, it can still be used by the employee in 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
  • non-documented performance evaluations
  • unclear descriptions of employee deficiencies
  • failure by the employer to follow up or enforce performance goals set in an evaluation.

The future of performance evaluations

Though performance evaluations have been the norm for many years, as we move away from many elements of the traditional world of work, many companies are experimenting with alternative ways to motivate and evaluate employee performance. 

Studies show that employees want more information about their performance. A one or two digit rating does little to satisfy this desire. Moreover, criticisms by a manager may have a negative effect on performance, while praise may do little to motivate change.

How are companies dealing with these concerns? Here are some of the emerging trends:

  • Instead of a backward looking rating sheet, supervisors are being encouraged to have discussions with their subordinates that focus on the future. 
  • These discussions center on the direction and needs of the organization and the role the employee can play in it.
  • The employee’s role is characterized by discussions of goals and stretch goals.

In the emerging economy, managers are being transformed into coaches. Rather than reserve their comments for a tense annual one-on-one evaluation meeting, coaches provide feedback daily or even more frequently depending on the circumstances. Psychology tells us that goal setting helps to motivate performance, and getting buy-in from a subordinate who participates in setting individual and group goals can be a strong indicator of commitment. So while most companies are not ready to abandon their current performance appraisal process, they would do well to see how it can be adapted to address current weaknesses and take advantage of academic literature regarding ways to make feedback more frequent and more future directed.