Mintz on Air: Practical Policies - Performance Evaluations: From Stellar to Subpar and Everything In Between

In the latest episode of the Mintz on Air: Practical Policies podcast, Member Jen Rubin hosts a conversation on performance evaluations, covering their importance, best practices, and legal significance. This episode is part of a series of conversations designed to help employers navigate workplace changes and understand general legal considerations.

Jen is joined by Member Paul Huston, to discuss:

1. The importance of performance evaluations
2. Creating a consistent and interactive process
3. The role of AI in performance reviews
4. Legal considerations and implications
5. Best practices for delivering constructive feedback

Listen for insights on improving performance evaluations, ensuring consistency, and providing meaningful feedback to support both employees and employers.

Performance Evaluations: From Stellar to Subpar and Everything In Between - Transcript

Jen Rubin (JR): Welcome to Mintz on Air, the Practical Policies podcast. Today's topic is Performance Evaluations: From stellar to subpar and everything in between. I'm Jen Rubin, a Member of the Mintz Employment Practice with the San Diego-based bicoastal Employment Practice representing management executives and corporate boards. Thank you for joining our Mintz on Air podcast, and I hope you have had the opportunity to tune into our programs previously.

If you have, you know that my guests and I have been discussing a variety of employment-related topics and developments. If you have not heard our previous podcasts and would like to access more of our content, please visit our Insights page at Mintz.com.

Today, I'm joined by my partner Paul Huston, who is also an employment lawyer based in our San Diego office. Paul helps companies and executives solve employment problems from daily human resources issues to high-stakes litigation. Welcome Paul, and thanks for joining Mintz on Air.

Paul Huston (PH): Thanks for having me. Great to be here.

The Importance of Performance Evaluations

JR: Today's topic is Performance Evaluations: From stellar to subpar and everything in between. What I'd like to explore with you today, Paul, are the legal reasons, if there are any, for doing performance evaluations. But before we even get to that, I'd like to ask you from your perspective as an employment litigator who has dealt with many employee claims. Can you talk a little bit about some of the best practices for conducting performance evaluations?

PH: Absolutely. I think this is a great topic to cover because it applies to pretty much all of our clients. It's something that we see a lot of mistakes in; some things can be done better and some things have lessons that are learned the hard way. I think one of the biggest problems that we see is sort of an unwillingness or a hesitance to be honest with negative feedback, and I think that's understandable. It can be awkward.

Sometimes co-workers can be seen as friends. Giving negative feedback can create rifts in relationships. People don't want that. And so sometimes managers will hold back, and they'll try to avoid hurting feelings. What that will do is it ends up sometimes painting managers into a corner when they do need to do something to make an adjustment, whether it's selecting people for a layoff or going through terminations, things like that. Those are often backed up by performance reviews. And if the constructive feedback, the negative feedback, the things that people can work on aren't there, sometimes it'll leave the employee wondering, "Well, what's really going on here? Because I never heard anything but positivity."

Performance reviews have the function of setting boundaries and creating expectations. When those don't exist there's no negative feedback, there's no constructive criticism, there's no real honest assessment and appraisal of the employee's performance that's shared with them. The employee doesn't know sometimes that their performance is not meeting expectations, which leads to them continuing to underperform, which affects the business in its performance and leaves them feeling blindsided when something comes up.

Creating a Consistent and Interactive Process

JR: You raise a good point because we talk about it being almost like a familial type of relationship, but an employment relationship is, in fact, a relationship and one that requires a two-way street, like any good relationship, with good communication. Can you talk a little bit about consistency in that relationship as well as making the process interactive?

PH: Absolutely. I think those are two important points to have both an effective performance review process and also put the employer in a good position to defend itself should claims arise. Consistency refers to a process protocol for selecting the factors that are going to be used to evaluate employee performance, and then also making sure that those factors are consistently and evenly applied, that you're not getting one manager applying it one way and another manager applying it a different way.

Also making sure that you have training and systems in place to make sure that the factors, in the evaluation criteria are applied fairly, consistently, and evenly across your workforce. And then the other is to involve employees in the process, and to have employee feedback about the concerns that are being shared. Sometimes poor performance is just a misunderstanding or a failure to manage well, not being clear on expectations. So having that two-way channel open can really make the process more stable, more defensible, and less painful.

JR: I want to add to what you said about an employment relationship being a human relationship. Sometimes making the process interactive when you're having a performance evaluation can help the manager learn to better manage. It can help the manager to better understand how the employee is thinking and feeling and identify the employee's goals.

The Role of AI in Performance Reviews

Sitting down and reading off a list of the things that the employee has done wrong seems to be a very ineffective way to conduct an employment evaluation. Let me ask you something Paul, because I myself, preparing for this podcast decided to ask AI, "Hey, AI, what is a performance evaluation?" And AI said, "It's a process that assesses how well an employee is performing in their job." It doesn't really answer the question, but I'd like to get your take on that.

PH: I'm sure we could talk for ages on AI and the problems that we're seeing with it, but I think this is one instance in which the “A” in AI standing for artificial is most clear. That's just kind of reading out the word, performance evaluation. The goal of a performance evaluation is to give employees a clear understanding of how their performance is compared to the company's expectations.

I think that's much more two-way than just telling an employee what their performance ranks. It's much more than that. The idea is that you want to have objective metrics, consistency, and thoughtful feedback using specific and concrete examples from the employee's work. You want a balance of positivity, encouragement, and constructive criticism.

You want to do that in a way that is thoughtful, helpful, beneficial, and also encouraging and kind. Irrespective of whether you're the type of manager who thinks being kind and compassionate is necessary, it's certainly not up for debate that employees respond better and perform better when they feel they're being treated with respect.

Legal Considerations and Implications

JR: It's interesting because when we talk about using AI to do performance evaluations, which by the way, we do not recommend, in part because performance, as you indicated Paul, it's got to be assessed against milestones and data and objective metrics and what it is that the employer's trying to achieve. Presumably, that's going to change over time. This is something that's developing. Business is not fixed in the same way the world is not fixed. This is an ongoing process.

And so that requires, going back to your comment, consistency and interactivity. Looking at these things on an ongoing basis based upon the world that's changing, which changes the business, and anything that comes in between making sure that you're doing that on a regular basis.

You had indicated that performance evaluations are important from a legal construct, and obviously we're employment lawyers, so we have different perspectives about this. But I'd like you to talk a little bit about how, in fact, a performance evaluation might be relevant if, in fact, an employee does bring some sort of claim against an employer. How does one respond to or refer to the employment evaluation to deal with that claim?

PH: That's a really nice segue. It is something to really keep in mind that performance reviews should be seen as a dynamic process. They are reflective of what is going on, not just in the company, but in the division in the group. It's going to be constantly changing and updating. And one of the things that makes performance reviews so important from a legal defense perspective is that is where people expect to see the pre-dispute honest assessment of the employee's performance with specific examples of here are the things that they're working on, here are the things that they've really done well with, here are the things where we're continuing to try to develop and how we are doing that..

The reason those become so important is because when a dispute arises, when a claim arises, very often the first thing that both the employee is looking to and anybody trying to evaluate the propriety of the employer's decision is going to look to are those performance reviews.

For example, if somebody is selected for a layoff and they are one of a group of people laid off in a reduction in force, an employee who's gotten nothing but outstanding performance reviews is going to be very confused. "Why was I selected if nobody ever told me that there was anything wrong with my performance?" And that inevitably leads to the conclusion, "What else could it be? It must be something else. It must be something that they feel they can't talk about, something that they can't be honest with me. They're saying, it's my performance. It's clearly not. I was a perfect performer, so it must be my age, my gender, my race, something like that."

That's where those claims come in. And when it comes back to the manager or the company having to say, "No, there were actually all these performance issues and here they are. This is the real reason they weren't selected. They weren't that great at this, they weren't that great at that.” Where are those in the performance reviews?

Best Practices for Delivering Constructive Feedback

JR: Going back again to human nature because I just can't get away from this as an employment lawyer, and I know you feel the same way because we're dealing with people and we're dealing with important relationships in their lives, the employment relationship is an important relationship. But having somebody take the perspective that “I didn't want to hurt their feelings, I didn't want to make them feel devalued. I wanted them to feel that they were important to the company, so I thought it was best that I just communicate all the wonderful things that they're doing, and then they come to find out that, in fact, there are certain actions that needed to be taken.”

Can you provide a little bit of guidance for managers who might be listening to this about, "Hey, I feel awkward about this, so how do I go about doing that because I really don't want these people to feel bad about what I'm telling them about what needs to be improved."

PH: It's an extremely understandable position. I sympathize with that, I get it. I think that's a very human mindset to have. You don't want to have awkward conversations. You don't want to have conversations that are going to hurt. I mean, maybe some people do, but I think it's fair to say that most people don't want to have those conversations. But I think what I would say in response is, it's something of an inevitability when those performance issues come up. That conversation is probably going to have to happen. It's going to happen sooner or later.

And so, the only question is, is it going to be a conversation of, "Hey, this isn't working out. We're going to have to let you go. By the way, I'm sorry that I lied to you about how you were doing for the last X number of months or years." Or leaving the employee feeling blindsided, suspecting that it's not because of their performance, which to them was no problem. It must be because they did X, Y, or Z protected activity or they asked for an accommodation or whatever.

Or is it going to be, "Hey, I've been coming alongside you trying to help you out with some things that we've identified that have been problematic areas for you, places where we've tried to help you develop, and we're just not quite getting there. We're not seeing the development that we want, and so this is what we're going to have to do." I think the employee in that case is going to be much more understanding, and it's a much easier pill to swallow. I think also a lot of it comes from an inability to have those conversations in a way that is positive, even when it's critical.

I think there's a fundamental misunderstanding that any discussion of an employee's performance not meeting expectations is going to be confrontational, negative, awkward, and those sorts of things. I don't think it has to be that way. I think it can be done in a way that is supportive and positive. "We're doing this because we want you to get to the place where we think you can be, not because we don't like you."

Key Takeaways for Employers

JR: That's a great point, and a way that managers can make that even more meaningful is to offer to provide support. So when you tell somebody, "Look, I need you to focus on X, Y, and Z. How can I help you do that? The company is prepared to help you do that. Is it more training? Is it more education? Do you need more resources? Do you need access to different people to help you do your job?”

There are a lot of things, and obviously, this all relates to the data and the objective metrics for doing the performance evaluation. When people hear those words and they know that the person who's saying them really means that they want to help and that the company wants to help, it really can make a difference. And I think it makes people more receptive to hearing those criticisms. So again, going back to the theme here, this is human nature. This is a human relationship. So that's something I think that folks can take away.

So thank you, Paul. I appreciate your time.

PH: My pleasure.

JR: This has been a great discussion about a very dicey subject, and one that makes people uncomfortable, but it's really important.

Once again, I'm Jen Rubin. For those of you who have not tuned into our Practical Policies podcast, please visit us at mintz.com for more content and commentary and to follow the different episodes of our Practical Policies podcast.

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