Overview: An employer may further employee training and development by conducting effective performance appraisals. Performance appraisals, also called evaluations or reviews, present challenges to employers seeking the best and most accurate method of evaluating employee performance. Various methods are available, including rating scales and checklists, forced ranking, management by objective, employee self-appraisal, and 360 degree feedback.
Employers should weigh the costs and benefits of any evaluation process before its implementation. Ideally, performance reviews should be a continuous conversation between employees and management. However, employers should ensure a minimum amount of reviews throughout the year, whether they are conducted annually or more frequently.
In addition, employers must decide when to conduct the evaluations: midyear, end of year, or on an employee's anniversary date. Employers must also determine whether to schedule the review cycle to coincide with compensation decisions.
XpertHR provides resources that aid in determining appraisal guidelines, selecting the best process, communicating effectively, adopting evaluation forms, using performance improvement plans (PIPs) and ensuring consistency among supervisors.
Trends: States continue to pass legislation protecting employers against employee defamation claims based on performance appraisals. A growing number of states offer employers immunity (although it is not absolute) when discussing an honest assessment of an employee's or former employee's performance with his or her prospective employer. However, employers continue to defend court claims in other legal areas related to performance appraisals, such as negligent retention or supervision claims based on poorly conducted employee evaluations, or retaliation claims citing poor performance appraisals as evidence.
Author: Marta Moakley, JD, Legal Editor
Updated to reflect forthcoming law protecting employers from negligent hiring and employment claims.
Updated to reflect forthcoming law limiting an employee's criminal history information as evidence against an employer.
Updated to remove December 1, 2016, overtime requirements that will not be implemented or enforced. .
Updated to reflect forthcoming performance improvement plan provisions under the Seattle Secure Scheduling Ordinance.
Updated to include detailed information on the forthcoming state Act to Establish Pay Equity, which strengthens existing equal pay laws.
Updated to reflect law granting employees the right to inspect their personnel files, effective January 1, 2017.
Updated to include information on performance appraisal requirements under the New York City Grocery Worker Retention Act, effective May 8, 2016.
Several Employment Law Manual sections have been updated to reflect New York City's new Grocery Worker Retention Act, set to go into effect on May 8, 2016.
Updated to reflect legislation taking effect on January 1, 2016, including important amendments to FEHA and equal pay law. See California Enacts Legislative Changes.
HR and legal considerations regarding employee performance appraisals. Advice and support on conducting helpful and meaningful performance reviews.