Best Practices for Successful and Legally Defensible Performance Appraisals
Ensure your performance appraisals are successful and legally defensible in five easy steps by managing employee performance.

If you’re like most managers, you do not look forward to the performance appraisal process for your staff. You recognize that preparing and delivering these appraisals is an important responsibility and there can be plenty of room for error, miscommunication, and legal repercussion. As a result, many managers give “soft” appraisals out of fear. They may be fearful of unpleasant reactions and/or debates, losing employees, or hurting the relationships with their staff. However, when this happens, both employees and the company suffer by a failed performance appraisal, with biased ratings.

Unfortunately, the consequences don’t stop there. Ever since Title VII was passed in 1964, courts are now looking to employee performance appraisals as a link to decisions about personnel actions. In fact, courts have found that failed performance appraisals are often at the root of many illegal discriminatory actions, particularly in cases concerning layoffs, promotions, discharges, merit pay, or a combination of all of these. No manager wants to be involved in a lengthy and embarrassing court case because they did not deliver a fair and ethical performance appraisal.

So, what is a fair, ethical, and legally defensive performance appraisal? A successful performance appraisal system begins with the application of a predetermined and formal appraisal method. The method used should be approved and provided by your company’s Human Resources department and used consistently with each employee according to a specified grouping. New technology is bringing this process onto the web and computers for its simplified implementation, global use, and enhanced storage and retrieval capabilities. There are several different types of methods, but what they all have in common is a measurable rating system. Depending on the system being used, evaluators can be managers, co-workers, subordinates, or customers.

In most performance appraisal systems, the key evaluator is the manager who regularly oversees and directs the activities of a particular employee. Many successful companies no longer leave one evaluator to complete an appraisal; instead, the best defense against legal claims is to have at least one level beyond the evaluator review and sign the appraisal as part of the final process. The chief reason for this is to reduce “rater errors.”

If your goal is to ensure you deliver a successful and legally defensible performance appraisal that both you and your employee feel good about, then the five performance management best practices listed below will help you to begin preparing for your next appraisal now - even if it is not due for another year.


Identify objectives and expectations

Both you and your employees need to identify what the objectives and expectations are, and at the beginning of the evaluation period. If you are a new manager with a new staff, get up to speed on what each of your employee’s objectives and expectations are. Then, let the employee know you uphold those same standards and have those same expectations of them. Some of the best resources for identifying objectives and expectations are:
  • Resource 1: The employee’s job description - what are the top 5 responsibilities?
  • Resource 2: On-the-job observations - what does the employee spend the most time on? what has the most impact?
  • Resource 3: Employee interviews - this is a great option when you don’t know your staff very well; use it in conjunction with another resource
  • Resource 4: Past evaluations - whenever you are not the last person who evaluated an employee, always review their most recent evaluation to assess any improvement

Use metrics to monitor performance

After you have identified and communicated the general objectives and expectations, you will need to establish metrics for monitoring progress (or identify any existing metrics you will use). This is not an option for a legally defensible appraisal. Without a measurement for assessing performance, it is otherwise a highly subjective review that oftentimes leads to bias. The three most common methods for using metrics in performance management include:
  • Using established targets, milestones, and due dates
  • Measuring the achievement of financial goals (sales, budgets, retention, etc.)
  • Referencing data in reports, surveys, or journals

Monitor progress and provide timely feedback

Now that you have the standards and measurements for monitoring employee performance, you no doubt will encounter performance that needs improvement. This is the first and most immediate type of feedback you must provide. You never want to surprise an employee during the appraisal meeting when you give them a low rating with a laundry list of occurrences you tracked but never discussed. Or worse, you rate them low and can’t justify why. Instead, the ideal approach is to always find the most appropriate, immediate time following a performance issue that needs correction and coach your employee to a better solution. Some of my favorite best practices for providing performance feedback include:
  • Focus on patterns rather than isolated occurrences; harmful performance patterns will cost more in the long run
  • Provide performance improvement feedback in a private setting and then document the occurrence along with any agreements made
  • Don’t forget to provide positive feedback to reinforce desired behaviors and to encourage repeat success

Prepare the performance appraisal and plan for the appraisal meeting

With appropriate preparation and planning, you are contributing to the success of the overall performance management process by building your confidence in producing fair and legally defensible appraisals. Part of being fair includes giving feedback that employees do not want to hear; usually areas needing improvement. However, if you are following the best practices in step three, then you will not be delivering any surprising news. When you are in this stage, make sure you incorporate the steps listed below as part of the preparation process.
  • Let the employee know when the performance review meeting will take place
  • Encourage the employee to write a self evaluation as part of their preparation process
  • Gather documented occurrences, status reports, achievements of targets, milestones, and due dates (i.e., historical facts and metrics) - these will support your ratings
  • Identify any gaps between set expectations and actual performance
  • Rate objectively and avoid bias; always cite performance examples for each rated criterion
  • Develop a performance improvement plan or career development plan
  • Set objectives and expectations for the next evaluation period

Conduct the performance review meeting in a private and comfortable setting

So, the day has arrived and you are going to meet with your staff to discuss their performance ratings. This is the time a lot of the fear kicks in for some managers and they want to rush through the meeting, get the employee’s signature, and forget about it until it’s time for the next evaluation. To avoid this, managers can practice the complete performance management cycle described here and learn to use historical facts and metrics to support to their ratings. However, that is not all it takes to have a successful appraisal meeting, read these 12 tips for ensuring a positive and productive interaction.
  • Allow enough time for the meeting and discussion
  • Avoid interruptions and listen carefully (take notes)
  • Conduct the meeting in a positive manner (act as a COACH, not a JUDGE)
  • Use effective non-verbal language (eye contact, posture, and gestures) to foster cooperation
  • Keep the meeting focused on performance and concentrate on the facts
  • Help the person to feel at ease and avoid reacting defensively
  • Encourage the employee to share their thoughts, but remain firmly in control
  • Use probing questions when elaboration or clarification is required
  • Respond to any objections or disagreements
  • Offer positive reinforcement for performance and behaviors you want to see repeated again in the future
  • Discuss the performance improvement plan or career development plan and revise as needed based on employee feedback
  • End the meeting with a supportive and positive attitude
  • Objectively document the meeting outcome and any changes to the performance improvement plan or career development plan
Now armed with these simple best practices, managers are able to manage the performance of their staff on an ongoing basis to deliver a performance appraisal that is not only legally defensible, but designed to foster growth and success. When this happens, everyone benefits; and as a supervisor of staff, you have mastered a delicate management skill.