March, 2005 vol 4 #3

It’s the Law
by Steven B. Schwartzman, Esq.

Conducting Effective Performance Evaluations

Employee evaluations not only are an essential management tool, but they can be an effective weapon in deterring employment litigation, or defending your business if you are sued. Even smaller businesses can benefit from having a formal evaluation program.

An evaluation program allows you to document performance-related problems. As most businesses have learned, the three most important factors in defending an administrative charge or lawsuit are documentation, documentation and documentation. A record of evaluations will refresh your managers' recollections and establish your efforts to work with an employee. It is more difficult to terminate an employee for poor performance when you have never conducted a performance evaluation or documented how an employee is failing to meet your business' expectations.

Many employees are consistent under-performers, yet they may never violate any particular work rules. If the only time you record problems in an employee's personnel file is when the employee makes a mistake or when you issue discipline, the employee may go on for some time with no record of how he/she is under-performing. If the employee is a member of a protected class, terminating him/her may be troublesome if you have no record of under-performance. Courts and agencies may assume that an employee was performing satisfactorily unless there is evidence to the contrary.

A program of regular evaluations increases communication between employees and managers, and provides an outlet for employees to air their grievances. Efficiency can be increased by giving employees the opportunity to correct problems before they escalate. Also, employees who know that their performance is consistently documented and included in their personnel file may be more likely to forgo litigation. Of course, a program of performance evaluations may be a double-edged sword. An employee who is fired for poor performance may have a good shot at winning in court if the employee can show a series of satisfactory performance appraisals.

A new employee should receive a performance evaluation fairly soon after he/she is hired. It is easier to correct performance deficiencies at the outset, before they become ingrained problems. The initial evaluation should go hand-in-hand with the end of an employee's introductory evaluation period. Thereafter, evaluations should be conducted on a consistent basis. However, be careful not to make promises you cannot keep. As a practical matter, a promise to evaluate each employee before his/her anniversary date is not always possible.

Make certain that the evaluation criteria is uniform and based on objective concerns. The appraisal form itself is very important and should be periodically reviewed by counsel. Be careful to steer clear of "personal opinion," "belief," or "conjecture." Supervisors should not inject subjective bias into the evaluation process.

All performance criteria should be reasonably related to the employee's job. If the evaluation is unsatisfactory, be prepared to offer the employee concrete ways in which he/she can improve. Be careful that you do not appear to be setting up an employee to fail or merely "building a file" by establishing unrealistic goals or timetables.

Supervisors should be trained in how to give fair, honest and constructive appraisals. They should make certain that nothing they say in an evaluation violates state or federal equal employment opportunity laws. They also should avoid the tendency to group all employees as "satisfactory" or "meets expectations." While there may be a reluctance to give employees bad news, without laying a foundation you will have a harder time terminating poor performers. Also, a supervisor should carefully review an employee's prior reviews. If the same criticisms are applicable, they should be mentioned again; otherwise the employee may think they are no longer an issue.

Finally, make sure that an employee signs his/her review. Employees often will claim in court that they did not receive a particular evaluation. The employee should understand that his/her signing of the review does not mean that he/she agrees with everything in it, but only that the employee has been presented with the evaluation and that it has been discussed. An employee may be more willing to sign a review where the employee has had an opportunity to add his/her comments.

Steve Schwartzman is a principal in the labor and employment law department of Hodes, Ulman, Pessin & Katz, P.A., a full-service law firm headquartered in Towson, Md. The firm also has offices in Columbia, Bethesda, Baltimore, Havre de Grace and Washington, D.C. He can be reached at 410-938-8800.

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