As the year comes to a close, many employers are beginning the annual process of conducting employee performance reviews. Common questions employers ask include: What criteria should we evaluate? How do we communicate negative reviews or performance deficiencies to employees? Should we include a self-assessment or incorporate employee feedback into the review process? How employers answer these questions can impact the effectiveness of the reviews and whether the reviews provide legal fodder to plaintiffs' counsel. To help employers answer these questions, Practical Law Company has identified the following best practices.

Performance reviews should evaluate an employee's skills and performance as they specifically relate to the employee's particular job duties and responsibilities. Reviews should use objective, not subjective, criteria. For example, a sales manager should evaluate whether the members of his sales team achieved specified sales targets, not whether they generally had good or bad sales for the year.

Using specific and objective criteria to evaluate an employee allows the employer to:

Straightforward and honest reviews give employees the information that they need to grow professionally and improve their performance, when necessary. Reviewers who are not comfortable confronting an employee about poor performance may deliver a message that is ambiguous, unclear or inaccurate or they may use emotional, sarcastic or superfluous language to ease their discomfort. However, each of these communication styles increase the risk of misunderstandings and miscommunications with the employee and fail to give the employee the information necessary to understand the need for improvement and how to improve performance.

Employees should be given an opportunity to provide feedback as part of a performance review. Feedback can be either a:

Employers should tailor their review process based on their specific goals. For example, employers trying to determine whether to modify internal processes to help employees meet specified goals may ask employees what goals they failed to achieve and what the employer could do differently in the future to help employees meet those goals. In contrast, an employer working with an employee who has performance problems may seek feedback from the employee to help identify the cause of the performance problems and ways the employee may improve his performance.

For more information on conducting reviews and a model evaluation form and policy, see: