Drafting Effective Performance Reviews

Q.  Our performance review process seems outdated and I’m not sure what to do. Do you have any suggestions?

A.  Employee performance reviews are probably one of the most loathed aspects of the workplace. Managers hate to do them. Employees hate to receive them.  In some cases, they can do more harm than good.

Consider the employee whose performance is mediocre. He is friends with his supervisor, however, and they often grab a drink after work.  Knowing that a negative performance evaluation may impact the employee’s annual salary increase, the manager looks the other way and gives the employee an evaluation rated as “effective.”

Or how about the manager who is reluctant to provide honest criticism on an evaluation for fear it will make it more awkward and difficult to work with the employee going forward? Or the employee who receives negative reviews but salary increases year after year?

On the flip side, consider the employee who tries really hard, but has a supervisor who is mean-spirited and does not want to see this employee succeed and possibly usurp his job?   Or the company that regularly reviews the employees of one department but not another?  Or the manager who rates everyone the same, regardless of their actual performance?

Some companies have been moving away from the performance review process altogether, and replacing it with a policy of providing regular, project-specific feedback to employees. Regardless whether you offer feedback on a rolling or annual basis, there are a few pitfalls to be aware of:

  • Be honest. Performance reviews that do not accurately reflect the employee’s actual performance are damaging in many ways. In employment litigation, they often undermine the employer’s legitimate reason for terminating the employee and have a major impact on the outcome. And inaccurate performance reviews – whether they are unfairly harsh or fail to identify needs for improvement—have serious detrimental effects on the business. No performance evaluations are far better than inaccurate ones.
  • Watch out for gender bias. One 2014 study of performance reviews in the tech industry found that women were significantly more likely than men to receive critical feedback in performance reviews. In particular, the study found that women were more likely to receive feedback on personality traits that was contradictory to men. For example, while a female employee may be labeled as “abrasive,” that same trait may be defined in a male employee as “confident” and “assertive.”
  • Be consistent. It will be much harder to defend a termination decision of an employee for poor leadership if that same performer received regular annual performance reviews describing her as a great leader.
  • Focus on the performance, not the person. The best evaluations provide feedback on performance, supported by specific examples. Thus, rather than labeling an employee as “negative,” focus on a specific example of an instance when the employee spoke to a customer in an inappropriate manner.
  • Stay clear of euphemisms for age. Be careful not to label an employee as “slow,” or not savvy with computers. Instead, again, focus on specific performance issues and cite to examples of deadlines not met or projects not completed.
  • Be sure to evaluate the employee on his or her performance throughout the entire year, and not just focus on recent events.
  • Avoid surprises. Managers should not wait until review time to notify employees of issues with their performance. Rather, give consistent, honest and regular feedback to employees throughout the year.
  • Provide measurable goals. The best evaluations provide specific, performance-based feedback with measurable goals for the future. This gives managers a roadmap to evaluate how the employee performs the next year. If performance does not improve, and the employee is fired and sues, reviews that told the employee what he needed to do to improve, and a chance to do it, are a tremendous aide in helping the employer win the litigation.

-Tracey E. Diamond

 

 

Fighting Negative On-Line Reviews by Ex-Employees

Q.  A former employee has posted a negative review about our company on a social media website. Is there anything we can do about it?

A.  While social media is a powerful tool for promoting your company’s brand, negative reviews can be equally powerful in affecting the company’s reputation. When the negative review is by an employee or former employee, the review is particularly galling.

Unfortunately, employers have little recourse. While many employees have social media policies prohibiting employees from commenting about the company, the NLRB does not allow such policies to chill an employee’s ability to complain about the terms and conditions of employment on social media.  Moreover, the company’s ability to control social media activity ceases once the employee leaves the company or is terminated.

But there are a few things you can do. First, be sure to set an alert so that you are aware of all comments made about the company online.

If the post is made by a current employee, use this as a red flag that something may be amiss about the employment relationship. Meet with the employee and give him or her a chance to air his or her concerns.  Then ask the employee if he or she would be willing to take down the post and address the issue internally instead.

If you are offering a severance package to a departing employee, consider adding a nondisparagement clause to any separation agreement that would prohibit the former employee from making negative comments or otherwise denigrating the company’s reputation. Consider paying the severance over time, rather than in a lump sum, to create a disincentive for the former employee to violate the nondisparagement clause.

Assuming there was no written agreement and it is a former employee who is doing the negative posting, you will have to consider whether it makes more sense to ignore the post or respond to it. If you do choose to respond, be careful not to personally attack the individual, but instead focus on the comment and set the record straight.  While it is not a battle easily won, depending on how damaging the post is, you may also consider speaking with legal counsel about the possibility of an action for defamation.  Moreover, if the negative comment also reveals company trade secrets, you will need to analyze the situation with your counsel and consider sending a cease and desist letter and filing suit.

Finally, it is always best to take a proactive approach. Remind employees of the powerful impact social media can have on your business.  Encourage your employees to become a “brand ambassador” and  “like” the company on social media and share company achievements.  After all, a negative comment will have much less of an impact if it is surrounded by lots of positive, reputation-enhancing messages in cyberspace.

–Tracey E. Diamond

Summer Internships: To Pay or Not to Pay?

Q.  My company is thinking about hiring a summer intern. Is there a requirement that we pay the intern, or can we hire him or her on a voluntary basis?

A.  Now that the weather is getting warmer, many companies are looking at their workforce needs during the summer months. Summer internships provide an excellent way for interns to get much needed “real world” job experience, while helping employers by adding another set of hands to complete projects that have not been completed during the rest of the year.

But must the employer pay for this assistance?

In most instances, the intern must be paid at least minimum wage and overtime for time worked above 40 hours in a workweek. Thus, payment of a small stipend, that does not meet minimum wage requirements, will not be enough.  The Fair Labor Standards Act defines the term “employ” very broadly as including anyone who is “suffered or permitted to work.”  Internships in the “for-profit” private sector will most often be viewed as employment.

There is an exception, however, for interns who receive training for their own educational benefit, if the training meets certain criteria. Courts looks to the following six-part test to determine whether an internship can be voluntary:

  1.  The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

If all of the factors listed above are met, the intern is not considered to be “working,” and the Wage Act’s minimum wage and overtime provisions do not apply.

Thus, if the internship program is structured around a classroom or academic experience (such as when the intern receives college credit for the program), as opposed to the employer’s actual operations, then it is more likely that the internship will be viewed as an extension of the individual’s educational experience.

Likewise, if the employer is providing job shadowing opportunities that allow an intern to learn certain functions under the close and constant supervision of regular employees, but the intern performs no or minimal work, the activity is more likely to be viewed as a bona fide education experience and payment is not necessary.

Conversely, if the intern displaces a regular employee and is expected to perform productive work, then the internship is considered to be “employment” and must meet minimum wage and overtime requirements.

Be aware that the test for determining whether an internship is volunteer work is interpreted quite narrowly.  Before hiring that summer intern, think through the above test carefully to see if the internship qualifies for the exception.  Most interns must be paid for their time.

Furthermore, while some employers try to get around the minimum wage laws by hiring their intern as an independent contractor, that relationship can be subject to scrutiny if the relationship is not classified correctly. As a general rule, if the employer expects the intern to work at the job site and provides supervision, the intern will be considered to be an employee and not an independent contractor.

– Tracey E. Diamond

 

Uber Sex Harassment Scandal Is Sobering Reminder of the Costs of Ignoring Complaints

Uber made headlines last week when Susan Fowler, a former engineer, claimed that she was harassed by her direct supervisor and her complaints were ignored by the human resources department. Uber took another hit a few days later when a recently-hired executive resigned amidst allegations that he had harassed employees at his former company.

How can you prevent your company from becoming the next media story?

There are several takeaways from the Uber incidents:

  1.  Distribute a written policy prohibiting harassment based on sex and other protected categories. The policy should clearly explain the legal definition of harassment, provide examples of conduct deemed offensive, provide alternative avenues for an employee to lodge a complaint, explain the investigation process, and promise absolute protection against retaliation for good faith complaints of harassment.
  2. Provide harassment prevention training at regular intervals.  Not only is such     training crucial to ensuring that employees understand their rights and obligations, but it also may provide an affirmative defense if an employee sues after failing to make an internal complaint.
  3. Train supervisors on their responsibilities to lead by example.  Supervisors need to be taught how to recognize harassment and what to do if they witness or receive a complaint about inappropriate conduct in the workplace.
  4. Take all complaints of harassment seriously and perform a prompt and thorough investigation.  Analyze emails and text messages as part of your investigation.  Ms. Fowler said that the multiple emails that she forwarded to HR were ignored.  Electronic communications can assist HR departments in determining what really happened in what sometimes can be a “he said/she said” situation.
  5. Take corrective action if appropriate, even if it is the first offense. According to Ms. Fowler, Uber didn’t take her complaint seriously because her supervisor was a “high performer.” Ensure that your evaluation metrics take into account professional behavior in addition to job performance.
  6. Never forget that diversity matters.  Ms. Fowler emphasized the low number of women on her team and in the company in general.  Promoting diversity based on gender, race, ethnicity and other categories helps to ensure that all voices are heard.
  7. Take a hard look at your hiring practices.  When performing background and reference checks, dig into information about previous claims against the prospective employee for workplace misconduct.  Keep in mind, however, that certain federal and state laws may govern your company’s ability to gather this type of information.
  8. Finally, never forget the power of the Internet.  Ms. Fowler’s story gained immediate national attention after she published a detailed essay on her personal blog.  While the Internet is a powerful place to promote your brand, this is not the sort of publicity most companies would like to see.

– Tracey E. Diamond

Philadelphia Employers May Not Ask Wage History Questions Under New Ordinance

Q.  My company is based in Philadelphia.  We often set salaries for new employees based on the applicant’s wage history.  Are we still permitted to do this?

A.  Effective May 23, 2017, a new Philadelphia Ordinance makes it unlawful for employers in Philadelphia to inquire about a prospective employee’s wage history or require disclosure of wage history as a condition of employment.  The law was passed to encourage employers to base salary offers on the job responsibilities of the position sought, rather than on the applicant’s prior wages.  Employers will no longer be able to rely on the wage history of a prospective employee when determining the wages of that individual, unless the individual knowingly and willingly disclosed his or her wage history to the employer.

To ensure compliance with the Ordinance, employers who do business in Philadelphia should start thinking about revising their employment applications to delete any questions inquiring about an applicant’s wage history.  Recruiters, HR personnel and managers will need to be trained about the new law so that these individuals know not to ask wage-based questions during the interview process.  In addition, employers should consider revising their EEO policies to add wage history to the list of protected categories.

-Tracey E. Diamond