A policy setting forth the contents and frequency of performance reviews may be beneficial for many employers. Such a policy allows employees to know what is expected of them and how often they will be informed of their progress. Although performance reviews are not required by law, such reviews allow the employer to let employees know whether they are meeting or exceeding performance goals, as well as to identify any performance problems that may exist. This record of performance shortcomings may be indispensable in a discrimination case in which an employee or former employee challenges the legitimacy of an adverse employment decision based on performance. Evaluations also encourage employees to improve their performance without the imposition of discipline.
The employer should attempt to follow the procedures outlined in its performance review policy because careful adherence to those procedures allows the employer to build a record of each employee’s performance. Employees are requested to sign the evaluation form not to indicate agreement with its contents, but simply to establish a record of the occurrence and contents of the review.
While it is sometimes tempting to gloss over an individual employee’s shortcomings, the employer should be certain to note any unsatisfactory work performance or disciplinary problems in the review and document those concerns in the employee’s file as well. This is important from a legal standpoint because, if an employee has had some negative remarks during his or her performance reviews, the employer can use the record as a defense against a subsequent discrimination or unemployment compensation claim by showing that the employee had problems that were raised with the employee but were not rectified. Performance reviews should – for this reason – be done, to the greatest extent possible, uniformly for all employees. Whenever possible, individual performance should be evaluated based upon objective, reasonably quantifiable criteria. If the reviews are not unbiased and unflinchingly candid, they may create more legal problems than they solve.
A compensation review policy may be beneficial from the standpoint of creating reasonable employee expectations regarding the probable timing of compensation increases and communicating to employees those factors that the employer intends to consider in making wage increase determinations. If the employer chooses to include such a provision in its written policies, it should follow the schedule and procedures set forth in the policy. Some flexibility in the schedule should help to make this an achievable goal. Failure to do so may cause employees to feel slighted or to doubt the employer’s commitment to its own policies.
The focus of any promotion and transfer policy should be upon a particular employee’s qualification for the open position rather than performance‑related criteria such as seniority. Even if an employer generally intends to promote or transfer from within the company, it should nonetheless preserve the option to pursue an outside candidate in appropriate circumstances.
If the employer chooses to include such a policy, the policy should be followed consistently. Failure to do so may lead to employee mistrust or may cause a particular employee to feel that he or she was unfairly passed over for a promotion, thus undermining employee morale and potentially leading to a discrimination claim.
To the extent upper-level management will permit, internal posting for all but the highest positions in the company is desirable from a legal standpoint, as well as a practical one. Not only do employees feel better about their opportunities for advancement when they can formally apply for positions, but many qualified employees of protected status will eliminate themselves from the legal requirement of consideration for upgrade positions by not expressing a formal interest in the openings.
Employers are encouraged to discuss job performance and goals with every employee. Formal performance evaluations should be conducted by both management and the employee to provide both management and the employee the opportunity to discuss job tasks, identify and correct weaknesses, encourage and recognize strengths and discuss positive, purposeful approaches for meeting goals.
The forms used to conduct performance appraisals should be tailored to the person being reviewed and the person providing the feedback. An employer may also request and employee’s peers to submit a performance review. The forms below are examples of different forms used by for the individuals conducting the performance review.
A copy of annual performance reviews should be maintained in each employee’s personnel file.