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A terminated employee files a lawsuit against you alleging wrongful termination based on illegal discrimination. From your perspective, the claim is bogus because you fired the employee for poor performance.
Thinking your attorney will make this go away fast, you make a phone call. As any attorney would do, he or she asks for any and all documentation you have that established the poor performance of the employee.
You have nothing ... or very little that documents the poor job performance. You never (or rarely, or inconsistently) conducted performance evaluations during the employee’s tenure with your practice.
Your attorney starts talking about a settlement because fighting it will be futile without necessary documentation to back up your story. The burden of proof falls squarely on your shoulders as the employer, and the best form of proof is documentation — particularly performance evaluations. Without them, you lose, and your profit takes a significant hit (approximately $25,000 a settlement, on average).
Understanding the need for documentation today and being proactive are the best forms of prevention.
Sadly, many dentists do not conduct formal performance appraisals on a regular basis. They feel uncomfortable “criticizing” employees, or they do not think it is time well spent. Yet, the financial consequences can be significant. The real question, given today’s litigious society and trends, is: Can you afford NOT to conduct performance evaluations?
Terminations that come as a surprise to employees are rife with potential liability issues. The terminated employee usually ends up angry and resentful, and searches for possible avenues for revenge. In assessing the situation, terminated employees almost never believe their own performance caused the termination, especially if the employer never told them otherwise.
If you think “at-will” employment is the get-out-of-jail-free card, you’re wrong. Not all employees are created equal — some are riskier than others to terminate. Why? It has to do with the antidiscrimination and retaliation laws that protect most employees in the workplace.
These laws protect people from illegal discrimination based on any number of “protected characteristics,” such as race, sex, age (40+), disability, and religion. They also protect individuals from retaliation if the employee has availed him/herself of a specific right given to him or her.
Terminating an employee who falls into any of these categories could result in a claim of illegal discrimination or retaliation, even though that may be farthest from the truth. Your only hope is documentation.
Objectives of a good performance program
- Provide data for use in wage adjustments, promotions, reassignments, disciplinary actions, and/or discharge.
- Provide objective and factual evaluation of an employee’s performance rather than a snap judgment.
- Improve employee’s job satisfaction and morale by communicating interest in his or her progress and personal development.
- Provide information for an employee’s need for training.
- Provide a forum for setting goals and performance standards for the next year or appraisal period.
- Provide an opportunity for each employee to discuss job problems and interests.
Performance review intervals
When should you evaluate performance? All the time. Nothing you include in a formal performance review should come as a surprise. Don’t wait until the formal review to share compliments and constructive criticism; use ongoing opportunities to advise employees of their progress.
By providing positive feedback throughout the year, you will inspire better performance. As a general rule, positive feedback should be given in front of others and negative feedback in private.
New employees should receive two performance evaluations in the first 90 days: one after four weeks and a second after 11 weeks. This approach compels you to observe the new employee’s performance closely. For legal and managerial reasons, it’s better to terminate employment during the 90-day orientation and training period rather than later.
After the first 90 days, every employee should receive a performance evaluation at least once a year. Throughout the year, keep notes related to each employee’s performance. This practice will enable you to prepare a more comprehensive, accurate analysis of the employee’s overall performance.
Although we recommend three performance evaluations in an employee’s first year of employment, the forms used and the time spent conducting the evaluations can vary.
A short, simple form covering a few major components of the new employee’s performance would suffice for the fourth- and eleventh-week evaluations. Performance factors are the key duties and accountabilities on which an employee’s performance is evaluated. In most cases, meeting with the employee to cover these areas takes very little time. Call our office for a sample of our “New Employee Progress Report” form.
A more complete performance appraisal covering such items as quality and quantity of work, job knowledge, and staff and patient relations should be used for all long-term staff.
Each of these items should have subsections that record the levels of performance, for example, a rating range of 1 to 5, whereby “3” denotes satisfactory performance, “1” excellent performance, and “5” significant incompetence. Call our office for a sample “Performance Appraisal” form.
As always, be factual and honest when writing a review. The evaluation should represent a true picture of the employee’s performance or lack thereof. If a decision is ever challenged, this is particularly useful when justifying why a certain staff member was discharged and another was not.
There are many possibilities for error during the writing phase of the evaluation.
Here are some errors to avoid:
- Recency effect: Occurs when the rater focuses on events that are most recent to the time the evaluation is being written and neglects to provide equal consideration to events throughout the entire evaluation period.
- Central tendency: Occurs when the rater decides it is easier to rate everyone as “average” and doesn’t differentiate between top performers or bottom performers.
- Leniency and strictness error: Similar to central tendency, leniency errors occur when the rater rates everyone with high marks; strictness is the opposite with everyone receiving low marks.
- Halo and horn effects: In both of these cases, the rater is judging the whole of the individual’s performance on one aspect that is either good (halo) or bad (horn), without really thinking about the employee’s other characteristics.
- Contrast error: Raters in this case are judging employees against one another rather than using established performance standards. As a result, a group of employees who are mediocre may end up with an excellent rating for one employee who is minimally better than other employees, or a poor rating if others are performing relatively well, because the comparison is to people rather than actual performance criteria.
- Rater bias error: Occurs when the rater’s own personal prejudices, stereotypes, and values cloud the rating of employees in group(s) negatively judged by the rater.
Conducting the evaluation meeting
After finishing the writing portion of this process, the employer has to conduct the part that most employers dread — communication with the employee about his or her performance. Sure, this meeting represents an opportunity for many bad things to occur, especially when the employee is a poor performer. As with anything, though, how it is approached initially makes all the difference in the world.
An employer can view this as an opportunity to slam the employee with every negative thing he or she ever did and really hammer down on the employee’s inadequacies, or the employer can use it as an opportunity for coaching, development, and growth.
Here’s the reality: what’s done is done; there is no changing the past. It is more appropriate to focus on the future. No amount of browbeating will change events that have already occurred, but the right approach to correct behavior may do a lot to improve the future.
Prepare for this discussion in advance and be specific about the reasons for both good and bad ratings, decide on steps for improvement, reinforce desirable behaviors, and emphasize development. Allow the conversation to be a two-way street.
Enlist the employee in offering thoughts, ideas, and/or solutions for improvement. Clear up any misunderstandings that may be present, and work with the employee to create an action plan going forward. This method — as opposed to lecturing, concentrating on the negative, or being overly critical — will help enhance the relationship and allow everyone to walk away from the meeting feeling better.
Successfully managing performance can lead to better employee morale, increased motivation, and greater employment satisfaction. Performance appraisals, when done well, are an excellent tool to support improved performance. They are also part of solid documentation practices that become safety measures in the event they are ever needed to support your management decisions. They can be an effective system for developing positive staff relations and correcting poor behavior, but not if you use them only as a punishment tool.
Tim Twigg is the president of Bent Ericksen & Associates, and Rebecca Crane is a human resource compliance consultant with Bent Ericksen & Associates. For 30 years, the company has been a leading authority in human resource and personnel issues, helping dentists successfully deal with the ever-changing and complex labor laws. To receive a complimentary copy of the company’s quarterly newsletter or to learn more about its services, call (800) 679-2760 or visit the Web site at www.bentericksen.com.