Make Sure Your Performance Reviews Aren't Illegal - Free Enterprise

Free Enterprise - The FindLaw Small Business Law Blog

Make Sure Your Performance Reviews Aren't Illegal

Given the trouble some companies have gotten into with their employee performance reviews, it's fair to wonder whether they're going the way of the fax machine. And while some businesses are scrapping performance reviews altogether, others are trying to modify them to avoid employee lawsuits.

So if you're not ready to ditch your employee performance reviews just yet, at least make sure they aren't illegal, and hopefully won't get you sued.

Have a Plan

Make sure your employees know from the start what parts of their performance will be evaluated, who will make those evaluations and on what criteria, and what those evaluations will mean. Having a documented performance review plan that tells your staff exactly what to expect is the first start to a beneficial review system.

It can also help to get feedback from employees when creating you performance review plan. Not only may your employees have important insight into their particular roles and responsibilities, they may want to set their goals higher than you'd expect. And having buy-in from your staff from the start means less friction down the road.

Stick to the Plan

The biggest employee complaints regard management "moving the goalposts" when it comes to their performance reviews. For example, one former manager is suing Yahoo, claiming the company manipulated its rating system in order to fire staff. The suit alleges that senior managers changed review scores in order to place some employees in the bottom five percent of performers so they could be laid off.

This is why having a clear idea of the plan going in is so important -- it's easier to stick to. Arbitrarily changing how you rate your employees' performance, or, even worse, changing the scores themselves, is a good way to get your company sued.

Plan With the Law in Mind

Having an idea about the legal ramifications of employee performance reviews going into the process can make sure you and your employees are happy coming out. And it may help to have an experienced employment attorney help craft your performance review protocols and keep you on track.

Follow FindLaw for Consumers on Google+.

Related Resources: