There are no laws that require, prohibit or regulate employee performance appraisals. But their legality can still be challenged if they are not fact-based, fairly and objectively done and are not focused on the essential tasks of the job. Poorly done appraisals lead to lawsuits based on negligence, harassment, discrimination and defamation due to violations of federal and state labour laws, such as Title VII of the Civil Rights Act, the Americans with Disabilities Act and the Age Discrimination in Employment Act.
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Negligence is the failure to exercise the necessary care in a situation that a reasonable or prudent person would exercise in a similar situation. Negligence means that the appraisal was not fair or objective. For example, a manager cites a worker for poor interpersonal skills but fails to keep a record of specific incidents.
According to federal case law (Ton v. Information Resources, Inc.), a fair appraisal is a tangible job benefit, and interference with this benefit may be a form of harassment under Title VII of the 1964 Civil Rights Act. Harassment occurs when a manager uses an appraisal to "get even" with an employee or to force the person to resign.
Discrimination is unfair treatment of an employee based his race, gender, religion, age or disability. Discrimination charges arise when appraisals are subjective rather than objective and are not directly related to the essential tasks of the worker's job. For example, a company subjects a worker, returning to work from a leave authorised under the Family Medical Leave Act, to a special or tougher than normal appraisal.
Defamation is the disclosure or release of false or misleading information that negatively affects an employee's reputation when given to a third party. Managers have the right to communicate appraisal results to those with a need to know, such as Human Resources, but the results must be fact-based and directly related to the worker's job performance. For example, an evaluation statement that an employee is "late all the time" is misleading and negligent; but if it is shared with another manager, it is defamation.
Prevent Performance Appraisal Legal Problems
There are several things an organisation can do to protect against legal issues related to performance appraisals. Standardise the process across the organisation and give managers and supervisors training on the proper way to conduct an appraisal. Make sure that all appraisals are done annually in writing. Include clear, concise information on appraisals in an employee handbook. Managers and supervisors should keep written employee performance logs with both positive and negative performance information, including the time, date, description and names of those involved. They should advise employees of performance problems and give them the opportunity to correct the problems. Every employee should have an accurate, up-to-date job description that is used in the evaluation process, and the appraisal should focus on the primary job responsibilities and be based on facts, not opinions. Also, give employees the opportunity to respond to their evaluation and provide a second level review in case of disagreements between managers and employees.
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