Performance evaluations take up the time of the employer, supervisors, and of course the employee – paid time for supervisors and employees – and for a company, time is money. A performance evaluation can be a confrontation, and pointing out flaws in your employees can breed dissent and lead to a mutinous workforce. Time, money, morale and other excuses provide ample fodder for employers to rationalize not evaluating their employees. So, why should employers conduct employee performance evaluations?

The Temptation to Skip
The benefits of avoidance appear to outweigh the costs of evaluating – until a disgruntled employee who was terminated for consistent poor performance sues the former employer for age, disability, equal pay, genetic information, national origin, pregnancy, religion and race discrimination with a side of sexual harassment and retaliation. While the employee’s claims are unfounded, the jury only has the testimony of the supervisor and former employee and the documents in the employer’s file with which to evaluate the claims. If the employer neglected to complete regular performance evaluations, the file is without tangible evidence demonstrating the employee’s poor performance over time, which is much more effective at contradicting the employee’s testimony. Needless to say, this is not where any employer wants to be.

With the above scenario in mind, let’s reevaluate evaluations.

Good Reasons to Evaluate
Employees want feedback about their job performance, and everyone wants appreciation for their good work. (Bonus: This appreciation can enhance workplace morale.) Further, for a business to run most efficiently, employees must know what is expected of them. These expectations can be best conveyed and reinforced through performance evaluations.

But performance evaluations can also save a company from tarnished reputation, financial crisis, and even bankruptcy. Properly carried out performance evaluations protect companies from exposure to potentially huge liability stemming from the gamut of claims available to a terminated employee. In such case, the jury will hear the employee’s testimony, and then see written performance evaluations which contradict the employee’s testimony, and in turn harm the employee’s credibility. Well-kept performance reviews will show that over time the employee not only consistently failed to meet the requirements of the employee’s position, but that the employee knew about the shortcomings and failed to improve.

How to Effectively Utilize Performance Evaluations
DO:

• Set work and performance expectations and goals so employees can channel their efforts towards achieving the company’s objectives.
• Ensure performance standards for employees are measureable, understandable, verifiable, equitable and achievable.
• Involve employees in the evaluation process and encourage feedback and suggestions regarding performance standards for their and other positions.
• Monitor employee performance and provide ongoing feedback by using informal oral and/or written feedback, but take care to document any feedback in writing to avoid “he said/she said” issues.
• Evaluate employee performance with a written evaluation and an in-person meeting, during which a supervisor rates, assesses and discusses with the employee the employee’s current successes or failures in meeting performance goals.
• Hire an attorney or experienced human resources professional to draft the performance evaluation form to ensure the evaluation takes into account all major aspects of an employee’s position and allows the evaluator to assess the employee’s performance accurately under the ratings included in the evaluation.
• Give timely, routine evaluations.
• Train supervisors how to draft and deliver constructive, positive, effective and, most importantly, accurate performance evaluations.
• Give fact-oriented, objective and not overly conclusive evaluations with specific examples of good performance and/or poor performance or disciplinary problems.
• Be candid.
• Set forth expectations for future performance and goals in areas requiring improvement.
• Include detailed instances of disciplinary action taken against employees, including follow-up, within the performance evaluation.
• Ensure managers and supervisors are following through and evaluating performance at the appropriate times.
• Keep an eye towards potential litigation during every step of the performance evaluation, from designing the evaluation to the actual meeting with the employee.

DON’T:

• Don’t use evaluation forms that are too broad in categories or rating system.
• Don’t sugar-coat. While it may be a short-term “solution” for avoiding confrontation and unpleasant dialogue, sugar-coating will always hurt the employer in subsequent employment litigation.
• Don’t inflate performance ratings. Once again, honesty is the best policy to avoid difficult explanations to a judge or jury in subsequent litigation.
• Don’t wait until the annual performance evaluation to list all of the employee’s disciplinary problems. This is not a situation during which the “band-aid” approach will be useful.
• Don’t be afraid to be critical.