Performance reviews can be a challenging topic for employers. With every legislative session, administrative rulemaking or local council meeting comes the potential for new legal requirements affecting an employer’s performance management process. At a minimum, an employer must be aware of any legal changes and should assess whether any updates to policies or procedures are warranted in order to remain legally compliant.
New laws often mandate recordkeeping requirements and create a need for additional training sessions and overall coordination of compliance efforts. But, in order to remain compliant, an employer must adequately identify any new requirements.
Recognizing New Requirements
Any laws that address different treatment (e.g., ordinances addressing discrimination based on sexual orientation) or retaliation protections (e.g., state whistleblower laws) could affect an employer’s performance management practices. Whether applicable state or local law addresses a particular protected class specifically or not, an employer should always strive to conduct performance appraisals in a fair manner.
Investing in Training
An employer also should focus on supervisor training when implementing any changes to internal methods of conducting performance appraisals. Adequate training of supervisors can prove indispensable to defending a lawsuit. On the other hand, evidence of supervisor bias or an inconsistent application of performance standards could make defending an employee lawsuit extremely difficult for an employer.
But effective performance management alone, without adequate recordkeeping practices, is not enough to substantially minimize liability risks for an employer. The content of performance reviews should be clear, truthful and complete. Any performance appraisal form should be acknowledged or signed by the employee and supervisor, and should be included in an employee’s personnel file.
Engaging in Best Practices
Mere compliance with the law may minimize liability risks, but an organization may choose to go further to achieve internal goals. An employer should always strive to engage in the best performance review practices possible because effective performance management remains a key component for:
- Motivating employees;
- Retaining talent; and
- Developing careers.
And all of the above may contribute to increased productivity, reduced staffing costs and bigger profits.