The document summarizes key aspects of performance evaluations including: - How they are used to track performance, determine pay/promotions, and provide feedback - Best practices for conducting evaluations such as regular timing, using objective criteria, and training evaluators - Legal issues around evaluations like lack of job descriptions, inconsistent application of standards, and potential bias - Solutions like ensuring consistency, using objective measures, and auditing the evaluation process

1. 7th Annual Idaho Employment Law Seminar
O C TO B E R 1 0 , 2 0 1 9 | B O I S E C E N T RE E A S T | B O I S E , I D A H O
PA R S O N S B E H L E . C O MN AT I O N A L E X P E R T I S E . R E G I O N A L L AW F I R M .
Performance Reviews and Evaluations:
Risks and Solutions
Susan Baird Motschiedler
801.536.6923 | smotschiedler@parsonsbehle.com

2. Overview

3. 3
How Performance Evaluations Are Used
• Track performance
• Improve performance
• Pay increase
• Promotion/demotion
• Retention/termination
• Employee feedback
• Strategic planning/evaluation of organization
• Allocation of training and development resources
• Training/education

4. 4
How Performance Evaluations Are Conducted
• Timing
◦ Regularly: Annual, Semi-Annual, Quarterly
◦ Sporadically
◦ Never
◦ Only when a Performance Problem Arises
• Evaluator
◦ Direct Supervisor
◦ Fellow Employees
◦ Self

5. 5
How Performance Evaluations Are Conducted
• Behavioral Checklists
◦ Punctuality, Conscientiousness, Attitude, Hours Worked, Dedication to Company
etc.
• Job Description Based
• Management Objective Based
• 360 Degree
• Ratings/Grades
• Ranking
• Self Evaluation
• Critical Incidents

6. Legal Issues

7. 7
Legal Issues – Litigation Claims
• Discrimination
• Retaliation
• Wrongful Termination
• Emotional Distress Claims
• Employment Contract Cases
◦ Cause Provisions
◦ Bonus
◦ Term of Employment
• Any other case involving employees

8. 8
General Legal and Practical Issues
• Fairness
• Accuracy
• Bias-free
• Consistency

9. 9
Legal Issues: No Job Description
• Critical to performance management
◦ Identify responsibilities
◦ Identify duties
◦ Identify performance standards
• Enforces the legitimacy of a performance evaluation
• Clarifies rank and how other departments fit together
• Should include any activity that takes 5% or more of an
employees time or which is critical to the position/employer

10. 10
Legal Issues: No Job Description
• Example of review:
• Lily is a female employee who has a new baby, had a difficult
maternity leave where she used PTO, is back from maternity
leave, and continues to use PTO because her child is ill. Her
review includes:
◦ “I seriously question Lily’s dedication to the Company. In addition to
being frequently out, she does not put in the hours needed to finish the
job and instead leaves the final details to her coworkers. This job
requires overtime and she refuses.”
◦ Lily works 40 hours (including PTO), is punctual and dedicated.
• No job description to provide OT expectations/requirements
• Original job posting said 35 - 40 hours a week

11. 11
Legal Issues: Job Description Not Followed
• Example:
◦ Job description for sale support describes a job where the employee is primarily
responsible for providing sales person with research and information; providing
customer or potential customer with product support post-delivery and installation.
◦ Sales job position includes the responsibility for arranging and overseeing shipping,
delivery, and installation of the product.
◦ David is in a sales support position and works for a number of sales people. David
is Seventh Day Adventist and has a religious accommodation to not work
Saturdays. A number of his coworkers are annoyed that he is not required to work
Saturdays, feel like his religious accommodation is bogus, and have been
complaining to management that they see him hiking and not in church on
Saturdays. Sales person Jill is particularly annoyed because many of her clients
need Saturday support and she does not like telling people David cannot be there
because of his religion.

12. 12
Legal Issues: Job Description Not Followed
• Example (cont.):
◦ David is working with Jill on a number of important customer accounts. Jill
usually asks her sales support to arrange delivery and installation for her
customers because she wants to move on to the next sale and pass the
customer on to sales support. However, three times in the last six months, she
has forgotten to tell David to arrange the delivery and installation agreed upon
with the customer and the customers were very angry.
◦ The company gives David a number of negative marks on customer relations,
follow through, and commitment to job based on his failure to arrange delivery.
As a result, David does not receive a raise and is put on probation.
◦ David feels that the negative review is because of his religious accommodation
and brings a charge for discrimination.

13. 13
Legal Issues: Employees Not Informed of Standards
• Standards
◦ Dress code, arrival time, collegiality, goal oriented, etc.
• Timing
◦ Annual, different for different departments, aspirational annual, etc.
• How Performance Ratings are Used
◦ Minimum rankings needed for pay increase
◦ Probation
◦ Advancement

14. 14
Legal Issues: Employees Not Informed of Standards
• Example:
◦ Jory started work for the company in February. She is the only person in
her department due to recent re-structuring and promotion of others who
were in the department. Jory is disabled and in April requested a number
of accommodations under the ADA.
◦ Jory has not been told when reviews are performed or what the minimum
score is for an increase in pay. She believes it is an annual review given
in November and she will have time to really shine in the next few
months.
◦ Jory is reviewed in May and receives mediocre (“3” out of “5”) ratings in
two of areas. To her surprise, the company does not give raises if an
employee receives less than a 4 in any two categories.

15. 15
Legal Issues: Consistency
• One of biggest problems/cross problems
• Are you consistent:
◦ Across departments?
◦ Across employees?
◦ Across the company?
• Timing for all employees in the department should be the
same
◦ Do not delay because there are problems with an employee

16. 16
Legal Issues: Consistency
• Example:
◦ Minority employee has had growing performance problems over the
years. In the past, management has mentioned the problems in reviews,
but otherwise given satisfactory grades. In the last year, because the
problems had not improved, numeric grades were lower, but overall
satisfactory.
◦ Employee complained that his reviewer was racist and filed a complaint
with HR, right before reviews were due again.
◦ Manager felt like he could not roll out the review while under
investigation for a discrimination complaint. Manager likewise felt like he
could not discipline the employee for further issues, and the problems
continued to get worse.

17. 17
Legal Issues: Consistency
• Example (cont.):
◦ HR did not follow up to ensure that reviews were done punctually.
◦ Investigation reveals no discrimination and clears the manager.
◦ Employee problems continue and the manager changes the draft review
so that it will be accurate, though less positive.
◦ Manager feels he has been exonerated and provides the review, three
months after it was scheduled.
◦ Problem?

18. 18
Legal Issues: Consistency
• Example:
◦ Mary is in her twenties, the President’s secretary, and comes in 5 – 10
minutes late almost every morning. She also wears jeans Monday –
Thursday. Mary gets a glowing review on all counts.
◦ Jane in her sixties and works for HR. She has arthritis that is particularly
bad in the mornings and occasionally comes in 5 – 15 minutes late. She
also occasionally wears jeans during the week when she is filing. The
CFO think Jane needs to go and is too slow in her job. He complains to
the head of HR and insists that she be marked down on her review for
being late and wearing jeans on non-casual days. Jane gets marked
down on a number of different areas for these things.

19. 19
Legal Issues: Consistency
• Example:
◦ Company X does performance reviews annually in early December.
Manager has failed to do reviews for his employees on time and did not
want to ruin anyone’s Christmas. Employee Ben came out as gay right
before Christmas. Ben has been having performance issues since
November and has started to miss work in January. Manager is fed up,
and decides in mid-January to give Ben his evaluation, which is negative.
Manager does not provide any other reviews at this time.
◦ Problem?
◦ What could Manager have done differently?

20. 20
Legal Issues: Consistency
• Example:
◦ Company X employees 5 secretaries. Three of them work under one
Vice President in human resources and two work for another Vice
President in sales.
◦ The three secretaries that work in human resources are evaluated under
a narrative rating system and graded using one of four categories
ranging from “needs improvement” to “excellent.”
◦ The three secretaries that work in sales are evaluated using primarily a
numeric rating system from 1 – 5 with only a small written summary at
the end.
◦ Sales and HR also use different criteria for evaluation, though the job
descriptions are the same.
◦ Problems?

21. 21
Legal Issues: Subjective Measure
◦ “Lacks energy” “moves slowly” “no gusto”
 Subjective
 Could show discrimination – age, national origin, sex
◦ Solution: Use objective criteria where at all possible:
 “Produces the lowest number of final reports per week in the department”
 “Lowest number of widgets per hour”
 “Produces little work after 3PM every day. For example, between 9AM and 3PM,
the average number of entries is 320, but between 3PM and 6PM, the average
number of entries is 17.”
◦ Another Possible solution: Use a combination of objective and subjective:
 “Generally unfriendly to customers in the drive through. Employee X has had more
customer complaints for rudeness than any other employee, an average of one per
shift.”

22. 22
Legal Issues: Subjective Measure
◦ “Doesn’t fit in”/“Not fun to work with”
 Does not go out drinking with us after work
 Does not like to hang out with us
 Does not like to go out to lunch with us
◦ “Good fit for company”/ “Fun to work with”
 Likes to go drinking after work
 Hangs out with us
 Goes to lunch with us
◦ “Classic example of a [type of employee]”
 “Classic example of a litigator”

23. 23
Legal Issues: Subjective Measure
◦ DeLoitte Approach: 4 Questions that move the conversation from “the
ratings to our people:”
1. Given what I know of this person’s performance, and if it were my
money, I would award this person the highest possible compensation
increase and bonus.
2. Given what I know of this person’s performance, I would always want
him on my team.
3. This person is at risk for low performance.
4. This person is ready for promotion today.
◦ Problems?

24. 24
Legal Issues: Subjective Measure
◦ Instead of “Doesn’t fit in”/“Not fun to work with” or “Good fit for company”/
“Fun to work with”:
 Does this matter for performance of essential job functions?
 Is participation in social events part of the job?
 Is it backed up by an objective measure of performance?
◦ Example: “Classic example of a [type of employee]”
 “Classic example of a litigator”
 “Classic example of scientist”
 Someone of different race, gender, religion, or abilities with same qualifications
doesn’t earn same praise.

25. 25
Legal Issues: Subjective Measure
• Example:
◦ In one study, law firm partners were asked to evaluate a memo by a third-year
associate. Half the partners were told the associate was black; the other half
were told the identical memo was written by a white associate.
◦ The partners found 41% more errors in the memo they believed was written by a
black associate as compared with a white associate.
◦ Partners graded the white author as having “potential” and being “generally
good,” whereas they graded the black author as “average at best.”
◦ The problem isn’t limited to law firms. One study in tech revealed that 66%
of women’s performance reviews but only 1% of men’s reviews contained
negative personality criticism.

26. 26
Legal Issues: Subjective Measure
Example - Solutions
◦ Blind performance reviews when possible
◦ Anonymous writing sample/work product
◦ Diverse review panel
◦ Compare apples to apples
 Same work product

27. 27
Legal Issues: Reviewer Bias/Shortcomings
• Leniency bias
◦ Want to be liked
• Strict bias
◦ Want to be feared/respected as a tough boss
• Recency
◦ Only most recent behavior makes it on the review

28. 28
Legal Issues: Reviewer Bias/Shortcomings
• Halo effect
◦ “Rockstar” example
◦ Not just the good angel halo
• Cultural bias
◦ Racial
◦ Age/looks/etc.
• “Central” tendency
◦ i.e. everyone is a 3 out of 5, average, or otherwise in the middle

29. 29
Legal Issues: Failure to Train the Reviewers
• Failure to train managers on how to review properly ensures
that they will engage in poor practices
• Expose company to unnecessary risk
• Companies often do not consider necessary

30. Best Practices

31. 31
Best Practices: Courage
Be Courageously
Honest

32. 32
Best Practices: Training
• Who needs training on performance reviews?
◦ The reviewer
◦ The reviewed
• What type of training?
◦ Written instruction
◦ Discrimination training
◦ Training on how to use objective measures
◦ Training on how to apply ratings scales
◦ Training on how the reviews are used

33. 33
Best Practices: Training
• What type of training?
◦ Anti-discrimination training
◦ Studies:
 Impact of discrimination awareness training immediately
before being asked to make an employment decision
 Impact of continuous and meaningful anti-discrimination
training
◦ Continue providing support and reminders through the review
period

34. 34
Best Practices: Choose the Proper Reviewer
• Direct line of supervision
• Direct and regular contact and observation with the
employee
• Has received training
• No personal/family relationship with the employee
• No history of bias/discrimination

35. 35
Best Practices: Transparency
• Employee should receive training, too
• Employee gets a copy to keep
• Employee understands how evaluations are used
• Employee has a chance to provide feedback or respond
• Review employee feedback
◦ More accurate than manager’s review?
◦ Claims of unfair treatment?

36. 36
Best Practices: Manager/Review Audits
• Do not let managers just “wing it” or “take care of it”
• Is everyone trained?
◦ Part of training is review and editing of manager reviews
• Ensure consistency across company/department/employee
• Review for subjective measurements; replace with objective
• Review for manager bias
◦ Halo
◦ Recency
◦ Cultural
◦ Central Bias

37. 37
Best Practices: Company-wide Audits
• Audit/review your entire review process
◦ Does the timing work
◦ Are they effective
◦ Do they measure performance accurately
 Do they help improve performance
• Strategic planning
◦ Should we allocate resources differently
◦ Do we work how we are currently organized and staffed

38. 38
• Susan Baird Motschiedler
801.536.6923
smotschieldler@parsonsbehle.com
Thank You