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?
First Reference Human Resources and Compliance Assistant Editor