Performance Appraisals: New Requirements and Best Practices Marta Moakley, JD Legal Editor, Reed...

Performance Appraisals: New Requirements and Best Practices

Marta Moakley, JDLegal Editor, Reed Business

Information/XpertHR

Wednesday, October 15, 2014

• Private employers are not required by law to provide formal performance appraisals (although perhaps required by private/public agreements).

• But, once decision has been made to conduct performance appraisals, must be conducted in a manner that ensures:◦ Reliability

◦ Integrity

◦ Fairness

◦ Effectiveness

• If a performance management process is implemented, should be followed.

Legal Requirements

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Performance Appraisals

• Motivating employees• Retaining talent• Developing careers

Increasing profits

Why evaluate performance?

Because it remains a key component for:

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Performance Appraisals3

• Strengthen communications skills• Learn about subordinates/team dynamics• Develop own careers

Increase profits

Why evaluate performance?

Because it remains a key component for supervisors to:

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• Aligned with company goals

• Truthful

• Provides consistent, structured method for providing feedback

What makes performance management effective?

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What is effective and adequate for one organization may be different for another. There is no “one size fits all” approach.

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• Management levels not clearly stratified• Structured around project groups• Cross-functional teams• Smaller organizations may have a fluid hierarchy in order to

“get the job done”• Performance management may be more informal

Organization: Startup/Fluid Hierarchy

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• Most common structure to a business• Hierarchical, stratified • Emphasis on tradition• Performance management may be more formal, consistent

Organization: Formal Structure

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• Less hierarchy, more democratic system of overlapping teams

• Developed in 2007 by Brian Robertson, a software engineer

• Most adherents are small businesses

• Zappos the largest company to adopt model

Organization: Holacracy

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1. Daily - Weekly

2. Monthly

3. Every six months

4. Annually

5. Never

Poll Question

How frequently do you receive feedback at your organization?

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• Performance appraisals should be a continuous conversation

• If you see something, say something• Content of review, whether excellent or poor, should not be

a surprise to the employee• May vary throughout stages of employee lifecycle

Frequency of Feedback

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• Direct supervisor• Second-line supervisor• Co-workers or team members• Clients or customers• Employee

Who Provides Feedback?

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Peer Review Form

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By Rahulkepapa (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Pay

Performance

Who Communicates the Feedback?

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• Needs improvement• Lazy• Do better• You did good• Your attitude needs to change• Show more enthusiasm

Avoid Vagueness

What not to say…

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• Do not lie• Do not exaggerate• Do not use vague terms to mask dissatisfaction • Do adhere to objective performance standards

Honestly Appraise Employee

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A supervisor adheres to the “Don’t put anything negative in writing!” approach to recordkeeping. The supervisor is concerned that anything lower than excellent reviews for the regional team would raise red flags at the corporate office.

In addition, the practice of always providing positive reviews allows her to avoid awkward conversations.

Case Study

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• Prepare in advance for discussion

• Include specific praise

• Emphasize areas of improvement

• Discuss success to date

• Plan for future goals

• Have employee sign the review

Celebrate Top Performers

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• Begin with a positive statement

• Ask for employee’s thoughts on his or her performance



• Include discussion of rewards for improved performance

• Plan for future goals


Communicating Satisfactory Reviews

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• Be consistent

• Begin with a positive statement

• Ask for employee’s thoughts on his or her performance



• Avoid “grade inflation”

• Plan for future short-term goals, including the implementation of a Performance Improvement Plan


Managing Poor Performers

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1.Set performance expectations

2.Communicate performance evaluations

3.Act on results

4.Document, document, document

In a Nutshell

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• Adheres to federal, state and local requirements• Establishes record for supervisors (past, present

and future)• Informs employment decisions

◦ Development planning;◦ Promotions;◦ Demotions; and ◦ Terminations.

What is adequate recordkeeping?

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• Some states provide for employee access to personnel records◦ Cal. Lab. Code § 1198.5

◦ Penalty provisions

• States may have varying definitions of “performance appraisal”◦ Pennsylvania law: peer reports constitute

“performance appraisal,” not development form

Personnel Files – State Differences

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• Be sure to properly identify requests for access or inspection

• Good practice to designate an employee to receive/process requests

• Process requests in a timely manner• Supervisors should receive training on their roles and

responsibilities in this regard

Personnel Files

Best Practices

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Holding an employee to a different performance standard or applying different performance appraisals systems to that employee may be held to be unlawful discrimination.

Protected classes across states and municipalities have been expanded to include:

•Unpaid interns for discrimination or harassment purposes

•Victims of stalking (retaliation protections also added)

•Employees who are victims of certain offenses for taking time off from work to appear in a court proceeding

•Sexual orientation

•Gender identity

Discrimination Cases

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In FY 2013, the EEOC received 38,539 charges alleging retaliation-based discrimination. The EEOC recovered $169.4 million (exclusive of litigation settlements/judgments).

In California, the DFEH received 12,699 retaliation cases (cited as a basis in a total of 18,480 employment cases filed) in FY 2013.

A poor performance appraisal may be the first action cited by an employee in a retaliation case.

Retaliation Cases

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Plaintiff need only show that the employment action is “likely to dissuade employees from complaining or assisting in complaints about discrimination.”

Burlington Northern & Santa Fe Ry. v. White, 548 U.S. 53 (U.S. 2006).

Retaliation Cases

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An employee reported a potential violation of the Foreign Corrupt Practices Act to his supervisor and to the corporate ombudsman. At the next scheduled review, the employee receives a “surprisingly negative” performance review and is pressured to step down from his position. When the employee refuses to comply with the demotion, he is fired.

Employee files a lawsuit alleging retaliation for whistleblowing.

Appraisal as Retaliation

Asadi v. G.E. Energy (USA), LLC, 720 F.3d 620 (5th Cir. 2013).

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• Employees may take sick leave for the following reasons:◦ The employee’s own illness or injury or need for medical

care; and◦ To care for or assist a family member with an illness or

injury or need for medical care.• Anti-retaliation protections

Paid Sick Leave Requirements California, Connecticut and various municipalities

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• Interprets Title VII and Pregnancy Discrimination Act (PDA) Requirements

• Issued in advance of Supreme Court’s Young v. UPS ruling (set for argument during current term)

• Specifically mentions performance appraisals in general enforcement sections and in best practices section

• States that EEOC charges frequently include allegations of disparate terms and conditions of employment based on pregnancy, e.g., closer scrutiny and harsher discipline than that administered to non-pregnant employees

• Closer scrutiny often evident in performance appraisals and disciplinary warnings or records.

New RequirementsEEOC Guidance: Pregnancy and Related Issues

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• In making the argument that pregnancy actually interferes with a female employee’s ability to perform the job, use objective, verifiable information

• Do not resort to vague, subjective standards

• Do not base on fears of danger to the employee or fetus

• Do not base on fears of potential tort liability

• Do not base on customer preference

• Do not base on assumptions/stereotypes of pregnant women

• Do not force unpaid leave

Best Practices

Bona Fide Occupational Qualification (BFOQ)

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• Monitor compensation practices and performance appraisal systems for patterns of potential discrimination based on pregnancy, childbirth, or related medical conditions. Ensure that compensation practices and performance appraisals are based on employees’ actual job performance and not on stereotypes about these conditions.

• Make sure employment decisions are well documented and, to the extent feasible, are explained to affected persons. Make sure managers maintain records for at least the statutorily required periods.

• Provide training to all workers, including those affected by pregnancy or related medical conditions, so all have the information necessary to perform their jobs well.

Best PracticesEEOC Guidance: Pregnancy and Related Issues

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You have progressed well in your goals this year.

Your contributions have been critical in attaining team-based objectives. You complete assignments and ensure that you meet deadlines.

You have a “can do” attitude and are an excellent team player. You’re an active listener and are approachable with projects.

If you were unavailable for an early morning conference call you always made an effort to contribute in other ways. Based on schedules you should begin working within 10 minutes of arriving at work.

Your productivity has remained steady throughout the year.

Performance Appraisal Exercise

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1. Failed to meet expectations

2. Below performance expectations

3. Meets expectations with average performance

4. Exceeds expectations with above average performance level

5. Exceeds expected job performance

Performance AppraisalExercise

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How would you rate this employee?

1. 1

2. 2

3. 3

4. 4

5. 5

Poll Question

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How would you rate this employee?

Performance Appraisal Exercise

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Rufous-tailed Lark (Ammomanes phoenicurus) in Kawal WS, AP W IMG 2004 CC BY-SA 3.0 J.M.Garg - Own work

http://creativecommons.org/licenses/by-sa/3.0

http://commons.wikimedia.org/wiki/User:J.M.Garg

1. Yes

2. Yes, within a specified range of hours

3. No

Poll Question

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Does your organization provide flexibility in starting and quitting times to employees?

According to the 2014 National Study of Employers (in conjunction with When Work Works, a project of the Families and Work Institute and SHRM), 81% of employers surveyed periodically change their starting and quitting times within some range of hours.

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• Allows employees to ask for a flexible work arrangement without fear of reprisal

• Must concern ongoing scheduling changes, not a one-off deviation

• Process involves various employer requirements, including posting notices, documenting responses and penalties for noncompliance

• Need not grant request if costs are too high

• Lack of collegiality/teamwork probably not sufficient for denial

New Requirement Right to Request Laws

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• Provides accurate feedback to employees regarding work performance, especially poor performance;

• Allows employees a reasonable opportunity to improve performance; • Advises employees of the full range of consequences for failure to meet

the employer’s expectations; and• Ensures consistency across the organization.

Best PracticesIn defending any labor and employment lawsuits, ensure the performance appraisals system:

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[email protected]

Twitter: @marta_m811

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Blog: Employment Intelligence

Thank you for your attention and participation!

October 15, 2014


Performance Appraisals: New Requirements and Best Practices

Marta Moakley, JDLegal Editor, Reed Business

Information/XpertHR

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