Estimated reading time: 3 minutes, 30 seconds

Why employee reviews can help your small business

effective employee review programIt’s wise for business owners to conduct employee reviews on a regular basis for a few reasons, says Polina Bernstein, a partner with Bernstein & Friedland, PC, an employment law firm in Encino, California.

From a legal perspective, one reason is that if an employer terminates an employee alleging their performance was less than stellar, having a written employee review addressing those performance deficiencies will help the boss defend against a lawsuit for wrongful termination down the line. “Without an employer having that documentation, an employee would have a better chance of convincing a jury that the real reason for the termination was not the employee’s performance but rather because of illegal conduct by the employer,” says Bernstein.

Furthermore, employee reviews help “set out areas where the employee has done well. That’s good for morale and offers motivation while also providing an employee with notice on the areas where the employee needs to improve so that the employee can focus on that,” says Bernstein.

That information is fodder for discussions between an employer and their staff, which keeps the lines of communication open, and that’s good for business.

Tips for appropriate employee reviews

While there is no one template for creating employee reviews, they are definitely more effective when the comments are committed to writing. Certainly, they can be shared verbally, but having review comments typed or written preserves them in case litigation stemming from a termination occurs in the future, says Bernstein.

She also suggests having the review typed in paragraph or bullet form so they are easy to read and comprehend. Moreover, “the more an employer can provide objective examples of areas for improvement, the better the review will be” says Bernstein. Objectivity removes emotion, an imperative for a fair and honest employee review.

Bernstein’s firm represents both employers and employees in various employment law matters. No matter who Bernstein represents, “My goal is to protect my clients in litigation,” she says. When she defends an employer in a wrongful termination case, having detailed employee reviews or other documentation, including emails, documenting performance issues assists her in arguing a termination was based on performance-based criterion, and nothing else.

Even employers in at-will employment states such as California and Ohio must be concerned about the reasons they fire an employee. In an at-will employment state, “You can let an employee go for any legal reason, but not for illegal reasons,” such as discrimination, retaliatory termination or whistleblowing, says Bernstein.

Therefore, if an employer doesn’t have written evidence of an employee’s performance issues but fires them on performance grounds, that boss has left themselves vulnerable to a wrongful termination lawsuit where an employee will later claim they were terminated because of discrimination or in retaliation for engaging in protected conduct at work and not because of their performance.

While Bernstein’s firm represents employers of all sizes, she finds small businesses frequently share a common issue. According to Bernstein, small business owners often “lack documentation when it comes to personnel issues” because they tend to be more lax as it relates to certain business matters. However, “if you don’t have information supporting your contention the termination was performance-based, you are making yourself more vulnerable to an employee’s rebuttal that the termination was due to discrimination or retaliation for being part of a protected class or for participating in protected conduct,” says Bernstein.

When an employee has been notified of performance-based shortcomings verbally, as opposed to in writing, it is wise to document that review or discussion in writing in some way. Sending oneself an email documenting the discussion took place or sending that email to a trusted manager who works with the employee in the form of a “just wanted you to know” communication are two methods for preserving evidence the discussion with the employee occurred should it be necessary in the future. It is also important the employer be consistent about how they document verbal discussions to fend off allegations of discrimination from a disgruntled former employee.

Tami Kamin Meyer is an Ohio attorney and writer. She is the Marketing Chair of the American Society of Journalists and Authors who tweets as @girlwithapen.
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