Performance Reviews Legal Issues: Small Business Managing People

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Legal Issues

The biggest job-related legal problems are often a direct result of unrealistic employment reviews. Managers often avoid conflict by failing to appraise a poor employee performance accurately and truthfully. Later, if the company fires the employee, it is easier for that employee to claim discrimination and offer his or her performance reviews as evidence of adequacy to carry out the job requirements.

First step

So, as a first step, you need to make sure that all managers give each member of their staff a realistic review. Additionally, all reviews should be issued in writing. The reviewed employee should receive a copy of his or her review.

Develop consistent review criteria

Another potential legal pitfall may be encountered when an employee claims that he or she has been discriminated against in the review. This is particularly likely to occur if the employee has been passed up for a promotion. To avoid this, you need to develop consistent review criteria and be absolutely sure that your managers adhere to the performance criteria. Reviews should also contain specific examples of negative and positive performance, not just generalizations.

Other steps

Other ways to avoid legal issues during reviews are as follows:

• Establish grievance procedures.

• Have more than one manager determine each employee’s overall performance rating or at least provide input during the pre-appraisal process.

• Give employees feedback during the year, as appropriate, to avoid performance review surprises.

• Encourage managers to work with employees who are underachievers in an attempt to raise their performance to a satisfactory level.

* Source Streetwise Small Business Start-Up

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