NFIB

Employee Evaluations Are Critical
03/ 28/ 2002


Want a recipe for a lawsuit? It's pretty easy: don't evaluate your employees, and then fire one of them. Or promote one instead of another. Or do evaluate your employees, but only verbally. Just wait to see how twisted the "he said-she said" becomes in court.

Fortunately, we suspect that since you're such a savvy business owner, you already give your employees written evaluations on a regular basis, right? Contributor Edith Helmich has more tips below:

Employee evaluations are an essential task for businesses of all sizes. The immediate benefit of an evaluation is to give an employee either recognition for a job well done or to provide suggestions for improving job performance. The evaluation is an opportunity for both the employee and management to discuss questions about the job and working environment. The evaluation is an opportunity for management to personally discuss each employee's contribution to the company and to obtain feedback about company operations from the employee's perspective.

Although the evaluation process should result in positive employee relations, business owners face heavy financial consequences for ineffective evaluation practices. Because of the number of potential legal problems connected to evaluations, sound policies and clear written guidelines are advised.

Without documentation that the employee has been informed of the quality of their work and conduct, the basis for personnel actions may be deemed arbitrary. Failing to provide employees with a regularly scheduled performance evaluation may make it virtually impossible to dismiss an unsatisfactory employee or to select one person for a promotion when several are eligible.

If job performance is below par, an employee must be given an opportunity for remediation, or the door is wide open for discrimination law suits based on sex, age, religious, racial or ethnic issues. Almost everyone fits into one of these categories. Discrimination charges in hiring, firing or promoting occur in companies of all sizes.

Awareness of sensitive areas and human pitfalls to avoid in the written evaluation will minimize some common problems. Some employers are reluctant to criticize employees and tend to give glowing reports for mediocre work. Some employers omit a written notice of unsatisfactory work performance in the review. In the event that an employee must be terminated, the courts will find the written documents binding over disputed verbal exchanges. Likewise, in the case of recommendations and references to prospective employers, the courts have consistently ruled against companies who criticized a former employee for actions or qualities that were not documented in job evaluations.

Evaluations of employee job performance should be:

* Designed so that all employees in comparable positions are assessed on the same criteria.

* Written in descriptive, not subjective, language.

* Factual, with job-related anecdotes.

* Limited to relevant job performance issues.

* To the point and complete in all areas.

* Based on measurable expectations for a specific job.

* Unbiased in terms of age, sex, religion, race or ethnicity.

* Always written, never informal or verbal.

* Regularly scheduled at predetermined intervals.

Employee evaluation is an important function that must be carefully designed and conducted. When employees' job performances are evaluated in a fair and efficient way, both employees and the company benefit.

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