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Gearing up for the annual performance review

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It’s the beginning of the year and employers are gearing up for annual employee performance reviews. Although employment standards legislation is silent on the topic, there are some principles that have come out of the common law that are important for employers to know.

For instance, employers are recommended to provide realistic and accurate reviews of employees’ performance. Although it may be difficult to let an employee know that an aspect of his or her work is not up to par, it is essential that the employer be honest.

Why? Honesty about an employee’s work performance can help the employer in the future when defending a wrongful dismissal claim. Imagine that an employer later terminates an employee for poor performance, and the employee is able to point to a good or even an adequate annual performance review. The employer would have difficulty proving that there were indeed performance issues at play, and the employee could argue that there was some other reason for the termination, such as employer discrimination.

In fact, if an employer wishes to terminate for cause due to poor performance, there are steps stemming from common law that the employer must follow:

  • Establish and communicate objective standards to the employee
  • Communicate to the employee that his or her work performance is falling below the objective standard
  • Warn the employee that failure to meet these standards might result in dismissal
  • Give the employee suitable instruction and training to correct any deficiencies and meet the objective standards
  • Allow the employee reasonable time to improve
  • Be able to show that the employee was still incapable of meeting the objective standards after a reasonable period of time

A truthful annual performance review would be consistent with the above required steps, and would assist the employer with its argument when defending its decision to terminate for cause.

The key point is that employers are recommended to communicate and provide useful feedback when there is a performance issue with the employee. It is only fair to be straightforward in order to allow the employee to improve the situation.

What’s more, employers could be proactive and address any performance issue when it first arises (regardless of when the annual review is scheduled), so the employee can rectify the situation before it gets out of hand. The employer’s message during a performance review should not come as a sudden surprise. If the employee is shocked by feedback at the annual review, it means that the employer did not provide effective feedback throughout the year. When an employer raises an issue before the review, it can use the review to track employee progress in resolving the issue.

It may be helpful to think of it another way: avoiding the truth actually does a disservice to the employee and shows that the employer does not value the employee enough to help him or her meet the particular performance criterion.

In addition to providing a forthright annual performance review, employers are recommended to document the review in writing and place it in the employee’s file.

Further, employers are recommended to standardize the performance criteria. This can be accomplished by crafting a list of criteria to use for all employees performing the same type of work, and ensuring that managers treat all employees similarly.

Why is this important? Standardized performance reviews can help avoid discrimination claims from employees who argue that a co-worker was evaluated differently. This is particularly relevant in cases where the employer is considering employees for annual pay raises, promotions, and other performance-related benefits.

Employers can also avoid discrimination claims by ensuring that the performance criteria are in fact job-related, written on a standard form, reviewed and updated regularly, and documented in writing.

The standardized list of criteria also helps employers avoid discussing extraneous topics during the review, such as the employee’s exercise of a particular right under employment standards or human rights legislation, as something that affected or constituted performance.

Another tip for employers is to provide specific examples of negative and positive performance feedback, not just generalizations. This makes the review more constructive for the employee and removes any ambiguity.

Additionally, employers are recommended to allow the employee to make comments at the end of the annual performance review. The employee’s take on the situation can provide valuable information.

In fact, employers could ask employees to prepare a brief summary of reflections regarding their own performance and contributions to the company to be reviewed before the meeting. This can help employees think more realistically about their performance. It could also help employees feel proud of their accomplishments as a productive team member. An employee might feel more comfortable providing prepared comments to the employer rather than speaking about them. Similarly, the information provided could help the employer understand where the employee is coming from, and confirm that both parties are on the same page in terms of abilities, performance and concerns.

It is a good idea to compile these procedures in a company policy and procedures document titled, “Annual Performance Review”. As a result, employees will know exactly what to expect for the standardized review process.

In my experience, I have regularly and voluntarily provided my manager with a memorandum that contained my thoughts on my experience with the company, my recent accomplishments, things I am working on for the next year, and any concerns I have. I started doing this on my own, and it has been beneficial in my view. My manager has also appreciated this initiative.

Also, I have recently become more open to constructive feedback from my manager. Although it may be difficult to receive comments regarding performance shortfalls, I remain thankful for the input because I know this means that my employer values me and wishes me to succeed in the company.

I’m wondering: how difficult is it for employers to provide effective and honest feedback during an annual performance review?

Have you ever asked employees to provide voluntary summaries of their own performance? What was the result?

Christina Catenacci,
First Reference Human Resources and Compliance Assistant Editor

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Christina Catenacci

Christina Catenacci, BA, LLB, LLM, was called to the Ontario Bar in 2002 and has since been a member of the Ontario Bar Association. Christina worked as an editor with First Reference between February 2005 and August 2015, working on publications including The Human Resources Advisor (Ontario, Western and Atlantic editions), HRinfodesk discussing topics in Labour and Employment Law. Christina has decided to pursue a PhD at the University of Western Ontario beginning in the fall of 2015. Read more
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4 thoughts on “Gearing up for the annual performance review
  • Evita Sanders says:

    I agree with Andrew that good reviews are a culture that must be developed in a company. It involves lots of training and honest dialogue at all levels. I would say a mid-year review should be used to see how an employee is on the way to reaching targets, and an opportunity to offer praise and/or constructive growth points. Not to reset targets! Stay calm, stay honest and speak to higher levels (even if only to share a “hypothetical” situation)

  • You have made some honest observations. Thanks for sharing your perspective! Any performance evaluation system is only as strong and effective as the culture of the organization in which it is being used. The message (and direction) needs to come from the top and from a legal perspective, a company fails to do so at its own peril! I suggest you make a case to senior mgmt based on legal precedent and case studies that clearly indicate the advantages of honest performance evaluations. There’s plenty of information out there. Good luck.

  • ML says:

    It has been my experience with HR that self generated performance reviews are self serving with only positive and sometimes inflated comments coming forward, people are less honest when asked to critique themselves, even when actual proof is required. Standarized performance reviews have also been ineffective as critisims are not taken seriously and management does not want the employee to “feel bad” so they down play the importance of improving the work performance. This leaves middle management with a difficult job of enforcing dicipline or improving performance because there is no support from management. How can you expect a company to grow and improve when management is afraid of hurting the employees feelings? How do you get the support of management to enforce company policy and discipline employees for lack of perfomance or insubordination or lack of respect for middle-management?

  • Susan Trevers says:

    In my job, performance goals are set in the summer, a mid-year review is carried out in the winter. During mid-year review, my supervisor realized that I was performing well above expectations and that would make it too easy for me to achieve the annual tagets and the year-end bonus. The reason I was performing over expectations was that I worked hard, while the others were busy enjoying the summer.

    Although every member of the team had similar annual targets, she doubled mine after mid-year review, so my chances of getting the bonus are no longer guaranteed. I feel this higly discriminatory and have lost interest in the job and confidence in the performance review process.

    I feel the employer is sending a message that high performance will be penalized by raising the bar while under achievers will have lower targets to work on.

    I have made this known to my supervisor but did not get a satisfactory response, prompting me to conclude she prefers having only average or under acheivers on her team.