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Q.  Our performance review process seems outdated and I’m not sure what to do.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

Profanity-Laced Social Media Posts May Be Permissible in the Context of a Union Organizing Campaign

Q.  Can I fire an employee for making disparaging comments about the company and its supervisors on social media?

A.  According to a recent Second Circuit opinion, if the social media post was made in the context of union organizing activity, then the answer likely is no. The National Labor Relations Act (“NLRA”) prohibits employers from terminating an employee based on that employee’s union-related activity. If the employee’s protected activity rises to the level of “opprobrious” or abusive conduct, however, it could lose the protection of the NLRA.   Nonetheless, the standard for a finding that the employee engaged in “opprobrious” or abusive conduct is quite high.

In NLRB v. Pier Sixty, LLC, an employee posted a Facebook message encouraging other employees to vote for the union and referred to his supervisor as a “loser” and a “motherf*cker.” The employee even went to so far as to disparage the supervisor’s family, posting:  “F*** his mother and his entire f***ing family!!!!”

The NLRB found that the comment did not rise to the standard of “opprobrious” conduct because it was made in the context of an upcoming union election. The Second Circuit agreed. According to the court, even though the employee’s message was dominated by vulgar attacks on the company’s supervisor and his family, the “subject matter” of the message included workplace concerns – management’s allegedly disrespectful treatment of employees and the union election. The court also noted that the company had demonstrated hostility toward the employees’ union activities, including threatening to rescind benefits and/or fire employees who voted for the union and enforcing a “no talk” rule preventing employees from discussing the union.

Further, the court considered it important that the company had tolerated profanity in the workplace on a daily basis, issuing only five warnings in six years and not discharging anyone for using profanity prior to the employee at issue. In addition, the court said that the supervisors, including the one whom the Facebook post was directed at, cursed at employees including using the “f” word on a daily basis. The court concluded that “it is striking that Perez – who had been a server at Pier Sixty for thirteen years – was fired for profanities two days before the Union election when no employee had ever before been sanctioned (much less fired) for profanity.”

Finally, and most disturbingly for companies trying to maintain their online reputations, the court concluded that, while Facebook posts may be visible to the entire world, “Perez’s outburst was not in the immediate presence of customers nor did it disrupt the catering event.” Calling the case as sitting at the “outer bounds of protected, union-related comments,” the Second Circuit upheld the NLRB decision.

So, what does this mean for companies trying to maintain a professional workplace?

First, it crucial to apply discipline consistently.  If Pier Sixty had discharged other employees for using profanity outside of the union-organizing campaign – and prohibited its supervisors from cursing at staff – it would have had a much stronger argument that the Facebook message should not be tolerated.

Second, employers should tread carefully – and consult with counsel – before disciplining employees for social media activity, particularly in the context of union activity.

Tracey E. Diamond

New York City Ban On Applicant Salary History Inquiries Effective October 31, 2017

Q. When will the new salary history law go into effect in New York City?

A. Effective October 31, 2017, employers are barred from asking job applicants in New York City about their salary history. The bill, which was passed by the New York City Council in early April, was signed into law by Mayor Bill di Blasio on May 4, 2017.

Salary history includes “current or prior wage, benefits, or other compensation.” The ban includes inquiries to an applicant’s current or former employer and searches of publicly available information for salary history.

To ensure compliance, employers should ensure that job applications for positions in New York City do not include inquiries about salary history. Employers should also update their internal policies and interviewing guidelines to ensure all relevant personnel are aware of the change.

For additional information, please see our previous post on the new law here:

– Jessica Rothenberg

Comp Time in Lieu of Overtime

Q.  An employee worked several hours of overtime last week. Can I offer him compensatory time off, to use in the future, rather than pay him overtime?

A.  Currently, unless you are a public-sector employer, the answer is no. Under the Fair Labor Standards Act, employees who are not exempt must be paid overtime pay (one and one-half times their regular pay rate) for all hours worked over 40 in a work week.

That may soon change, however.

Just yesterday, the House of Representatives passed a bill that would amend the Fair Labor Standards Act to allow certain employees to take paid time off rather than receive overtime pay when working more than 40 hours in a week.  Dubbed the Working Families Flexibility Act, the Bill would allow employees to accrue up to 160 hours of compensatory time in a year, at a rate of 1.5 hours for each hour of overtime worked.

The Bill contains some guidance on how to administer such a policy. The employer may provide compensatory time to employees in lieu of overtime pay only if the arrangement is agreed to through a collective bargaining agreement or  in a written agreement between the employer and employee.  The employee must be allowed to use the comp time within a reasonable period after the request, so long as the comp time does not “unduly disrupt the operations of the employer.”

To become eligible to participate in a comp time program, employees will have to have worked at least 1,000 hours of continuous employment in the 12-month period preceding the date of the agreement or receipt of comp time.

Any unused comp time would have to be paid back by the employer at the end of the year (or upon 30 days of notice by the employee in the case of accrued time in excess of 80 hours). Significantly, an employee who has accrued compensatory time off also must be paid for the unused comp time upon termination, regardless of whether the termination was voluntary or involuntary.  In this way, comp time would need to be handled differently from accrued vacation time, which is not necessarily subject to pay upon termination, depending on state law.

It remains to be seen whether this Bill will become actual law, or if it does, whether it will be modified to pass the Senate. If it does pass through the Senate, however, the President has pledged to sign it.

If this option becomes available to private-sector employees in the future, employers will have to take a hard look at their processes to determine whether offering comp time in lieu of overtime makes sense for their organization. While some employers may applaud this initiative as a cost-saving method and a way to provide flexibility to employees, others may see such a program as an administrative burden.

– Tracey E. Diamond