Most employers do performance evaluations of their employees, and they are so important. But a poorly designed performance evaluation system can do more harm than good. In fact, it can substantially increase the risk of liability for employers. Here are some of the most common mistakes to avoid.
From a legal perspective, the most common mistakes employers make in the design and administration of the performance evaluation process include using “subjective” criteria unrelated to job performance and standardized evaluation forms that don’t evaluate essential job duties or duties that the employee actually performs, and focusing almost exclusively on positive attributes (while ignoring significant performance problems).
Here’s how to avoid those issues:
- Utilize objective standards. Supervisors should be instructed to evaluate the employee’s abilities in quantifiable terms and provide, when possible, objective standards and specific examples (e.g.,ability to timely complete projects, ability to follow company rules). An employer’s reliance on subjective evaluation systems to promote or terminate employees has been found to create a ready mechanism for discrimination.
- Coordinate evaluation forms with employee job descriptions. Evaluations should objectively measure the employee’s ability to perform specific, essential tasks required by the job, as reflected in the job description.
- Include specific examples of strengths and weaknesses. Evaluators should provide specific examples of the employee’s strengths and weaknesses in areas evaluated. In evaluating attendance, for example, the evaluator should provide the number of absences in a given period.
- Discuss evaluation with employee. In explaining results of the evaluation, and before requesting the employee to sign it, the evaluator should candidly discuss it with the employee.
- Allow employee to provide feedback to the evaluation. A procedure allowing employee comments is important because it gives the employee a chance to air any disagreement, and it gives the employer an opportunity to review—and, when appropriate, to modify—the initial evaluation.
- Consider review by more than one level. Evaluation by more than one level of supervision has the advantage of minimizing or canceling out any bias on the part of an individual rater.
- Periodically audit the evaluation system. Whether or not the employer utilizes more than one level of supervision in the evaluation system, a senior manager or human resources official should periodically audit the evaluation system for uniformity across departments or facilities. Inevitably, some supervisors will be strict, others lax.
- Train and evaluate the evaluators. An effective, fair evaluation system can succeed only if evaluators are trained in proper evaluation techniques and themselves held accountable for putting these techniques into practice.
- Establish effective recordkeeping system. Appropriate steps should be taken to ensure that evaluations, employee signatures, employee objections, training summaries, and audit results are properly retained in the event of litigation.
- Utilize evaluation system to prevent lawsuits. Employers should review performance evaluations before undertaking significant employment decisions such as a promotion or termination.
On performance evaluations, turn to Advising California Employers and Employees, chap 17. For checklists and sample forms relating to employee evaluations, check out CEB’s Drafting Employment Documents for California Employers, chap 10. See a video interview I did on this new book. You might also be interested in CEB’s program Fundamentals of Employment Law, available On Demand.
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