Now is a good time to re-evaluate your company’s employee evaluation process in light of the prevalence of remote work and a U.S. Supreme Court decision lowering the requirements for employees to succeed on certain discrimination claims. How employers conduct employee performance reviews can vary based on the type of business, the company culture, and the position the employee is in. Although there are no federal or state laws dictating how performance reviews are conducted, there are several factors that should be considered before conducting a performance review.
Before the review, it is paramount that the reviewer is properly trained by human resources staff to ensure that all performance reviews are fair, effective, and legal. The reviewer should know how to cover performance standards that have been communicated to the employee and are clear, job-specific, reasonable, understandable, and measurable. Expectations should be fair and attainable — meaning employees are given tasks that are reasonably achievable and do not burden solely one person. This helps avoid discrimination claims, plus it can boost morale and overall productivity. The reviewer should also give feedback on whether the employee met standards and how they can improve. The reviewer should make a plan with the employee that lays out how to meet future goals and how to improve in areas that were unsatisfactory. The reviewer should remain respectful and honest, even if they are conducting an adverse performance review. During an adverse review, it may be advisable to consult HR and ask for a representative to be present at the meeting.
Conversely, a performance review may go wrong when the reviewer is not ready to defend performance ratings. It is crucial to document observations before giving a performance review to avoid this issue. In order to make a fair and accurate assessment of an employee’s performance, the reviewer should regularly document the performance in a factually accurate manner that reflects both satisfactory and unsatisfactory work done during business hours, ensuring the evaluation is not based on any protected characteristics. It may be in the best interest of the reviewer and the employee to receive feedback about the employee’s performance from several sources, such as peers and other managers, to prevent biases. If a performance review discusses protected characteristics such as race, color, religion, sex, and national origin, a case for discrimination may be easy for an employee to bring, especially after the U.S. Supreme Court’s 2024 decision in Muldrow v. City of St. Louis, 601 U.S. 346, 144 S. Ct. 967 (2024). In Muldrow, the Court held that the employee need only demonstrate that they experienced “some harm” regarding their employment that made them “worse off” — and that an employee need not prove they were subjected to a “significant” employment disadvantage in order to succeed on a Title VII discrimination claim.
Lastly, companies may want to reevaluate their performance review processes due to the emergence and now permanence of remote and hybrid employees. Effectively communicating goals and feedback can be challenging when managers have less face-to-face contact while supervising their employees’ everyday activities. This is why it is important for companies to embrace the modern performance review schedule, which is more frequent and tailored to the individual. Instead of annual reviews, employers may want to adopt a more frequent — for example, quarterly — review schedule that is better suited for correcting and preventing issues. Some employers may even want to adopt a formal performance review schedule mixed in with informal check-ins to strike a balance between structured assessments and continuous feedback.
Bottom line: When conducting a performance review, the reviewer should be prepared with documentation, remain honest and respectful, communicate attainable goals, prepare a plan with the employee, and always evaluate the employee based on performance, not protected characteristics.
Steptoe & Johnson’s Labor & Employment Compliance team will continue to monitor any developments in this area, especially following the recent Muldrow decision.
