Transcript Slide 1

Performance Appraisals: New
Requirements and Best Practices
Marta Moakley, JD
Legal Editor, Reed Business
Information/XpertHR
Wednesday, October 15, 2014
Legal Requirements
• 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:
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Reliability
Integrity
Fairness
Effectiveness
• If a performance management process is implemented, should be
followed.
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Why evaluate performance?
Because it remains a key component for:
• Motivating employees
• Retaining talent
• Developing careers
Increasing profits
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Why evaluate performance?
Because it remains a key component for supervisors to:
• Strengthen communications skills
• Learn about subordinates/team dynamics
• Develop own careers
Increase profits
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What makes performance
management effective?
• Aligned with company goals
• Truthful
• Provides consistent, structured method for
providing feedback
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Effective
Performance
Management
Minimized
Liability
Risks
Adequate
Recordkeeping
Practices
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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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Organization: Startup/Fluid
Hierarchy
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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
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Organization: Formal Structure
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Most common structure to a business
Hierarchical, stratified
Emphasis on tradition
Performance management may be more formal, consistent
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Organization: Holacracy
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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
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Poll Question
How frequently do you receive feedback at your organization?
1. Daily - Weekly
2. Monthly
3. Every six months
4. Annually
5. Never
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Frequency of Feedback
• 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
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Who Provides Feedback?
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Direct supervisor
Second-line supervisor
Co-workers or team members
Clients or customers
Employee
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Peer Review Form
By Rahulkepapa (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons
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Pay
Performance
Who Communicates the
Feedback?
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Avoid Vagueness
What not to say…
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Needs improvement
Lazy
Do better
You did good
Your attitude needs to change
Show more enthusiasm
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Honestly Appraise Employee
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Do not lie
Do not exaggerate
Do not use vague terms to mask dissatisfaction
Do adhere to objective performance standards
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Case Study
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.
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Celebrate Top Performers
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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
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Communicating Satisfactory
Reviews
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Begin with a positive statement
Ask for employee’s thoughts on his or her performance
Include specific praise
Emphasize areas of improvement
Include discussion of rewards for improved performance
Plan for future goals
Have employee sign the review
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Managing Poor Performers
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Be consistent
Begin with a positive statement
Ask for employee’s thoughts on his or her performance
Include specific praise
Emphasize areas of improvement
Avoid “grade inflation”
Plan for future short-term goals, including the implementation of a Performance
Improvement Plan
Have employee sign the review
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In a Nutshell
1.Set performance expectations
2.Communicate performance evaluations
3.Act on results
4.Document, document, document
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What is adequate
recordkeeping?
• Adheres to federal, state and local requirements
• Establishes record for supervisors (past, present
and future)
• Informs employment decisions
◦ Development planning;
◦ Promotions;
◦ Demotions; and
◦ Terminations.
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Personnel Files – State
Differences
• 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
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Personnel Files
Best Practices
• 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
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Discrimination Cases
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:
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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
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Retaliation Cases
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.
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Retaliation Cases
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).
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Appraisal as Retaliation
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.
Asadi v. G.E. Energy (USA), LLC, 720 F.3d 620 (5th Cir. 2013).
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Paid Sick Leave Requirements
California, Connecticut and various municipalities
• 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
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New Requirements
EEOC Guidance: Pregnancy and Related Issues
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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.
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Best Practices
Bona Fide Occupational Qualification (BFOQ)
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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
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Best Practices
EEOC Guidance: Pregnancy and Related Issues
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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.
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Performance Appraisal
Exercise
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.
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Performance Appraisal
Exercise
How would you rate this employee?
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
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Poll Question
How would you rate this employee?
1. 1
2. 2
3. 3
4. 4
5. 5
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Performance Appraisal
Exercise
Rufous-tailed Lark (Ammomanes phoenicurus) in Kawal WS, AP W IMG 2004 CC BY-SA
3.0 J.M.Garg - Own work
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Poll Question
Does your organization provide
flexibility in starting and quitting
times to employees?
1. Yes
2. Yes, within a specified range of hours
3. No
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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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New Requirement
Right to Request Laws
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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
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Best Practices
In defending any labor and employment lawsuits,
ensure the performance appraisals system:
• 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.
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Thank you for your attention
and participation!
[email protected]
Twitter: @marta_m811
LinkedIn
Google+
Blog: Employment Intelligence
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Performance Appraisals: New
Requirements and Best Practices
Marta Moakley, JD
Legal Editor, Reed Business
Information/XpertHR
Thank You!
Contact us at 1-855-XPERTHR or
[email protected]
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