The Case for Documenting Performance Issues

Many employers are not rigorous enough about documenting employee performance issues. Then, when the employer decides it would be best to terminate the employment relationship, the absence of sufficient documentation can pose risks that were otherwise avoidable. Generally speaking, documentation of

performance issues is not required unless an employer has a policy or practice that requires it. But that doesn't fully address the issue because there are many reasons why employers may not want to terminate an employee without having a full written record of the performance issues regardless of policy requirements.

For the most part, employees hope to succeed at their jobs. And the longer an employee works for a particular employer, the better the employee knows the products and services. Those employees are very good representatives of the company with company clients. Oftentimes, an employee who is underperforming but is motivated to succeed can turn his or her performance around if the employee understands what he or she is doing wrong and how to improve. If the employee takes it seriously and works on performance, a valuable employment relationship can be saved. Discussions about performance along the way are critical to the employee's success. And documenting those discussions, along with writing accurate and timely performance reviews, will protect the company later if the employee is terminated for failing to meet the employer's expectations.

A good documentary record of performance issues can sometimes help avoid a lawsuit altogether. An employee's attorney, when presented with a thorough and thoughtful written record of performance problems, may be more hesitant to file suit on the employee's behalf in light of the evidence against his or her client. Or, if the lawsuit is already filed, the employee's attorney may be more willing to support a compromise of the claim sooner rather than later, thereby avoiding some of the costs and risks of litigation.

If an underperforming employee is terminated and sues for wrongful termination, an employer will need the documentation as part of the legal defense to help show that the employer did not act arbitrarily. Even if the employee was employed "at will," things can happen during an employment relationship to undermine at-will employment. In that case, an employer will need to show that it had legitimate reasons to terminate the employee. And documentation of performance issues and conversations with the employee about those issues are some of the best proof.

Keep in mind that a jury could be the ultimate decision maker about an employer's liability. An employer is better positioned to obtain a favorable outcome if a jury is presented with written evidence proving that the employer engaged in ongoing communications about performance problems and set clear expectations for the employee. While fairness may or may not be a specific issue in every case of wrongful termination, a corporate employer will always be viewed more favorably by a jury if it believes the employer acted fairly. After all, many jurors are employees and not employers, and the odds are that they have all worked for a boss at some time in their lives who they feel did not treat them fairly. Documentation of the seriousness of ongoing performance issues is one of the best ways to overcome a juror's potential inclination to distrust the employer.

Another reason an employer would benefit from having documentation of performance issues is because it allows an employer to see whether a manager has been proactive in trying to address the issues with an underperforming employee. Did the manager communicate the problems and help an employee try to fix them? Or did the manager simply give annual reviews with "met all" standards and failed to communicate about significant performance issues? If the latter, the manager is not necessarily looking out for the employer's or employee's best interests.

Also, there could be a question raised about discrimination if the employee is in a "protected category." Written documentation of performance problems and communications about those problems can help establish that there was a basis for treating the particular employee differently from his or her peers and differently from those who are not in the same protected category. As a result, it will be difficult for an employee to prove that the termination was based on an illegal reason.

Terminating employees should always involve an assessment of risk, balanced with the needs of the business. Documentation of performance issues and of conversations with employees about those issues can help minimize risk and support the business need. It helps demonstrate that the employer took some responsibility for performance issues and tried to address them with the employee while supporting a positive outcome. If the employee failed to rise to the occasion after being alerted to the employer's concerns, the documentation will help establish that the employer is not responsible for the failure.

It is a good idea to work with the human resources department and/or consult with legal counsel about the particular circumstances before terminating someone's employment. That way, employers can make termination decisions with a better understanding of the risk issues they face in each situation.

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Barrie Gross is former Vice President and Senior Corporate Counsel (Employment Law) for an international Fortune 1000 company and is a regular contributor to AllBusiness.com. She is the founder of Barrie Gross Consulting, a human resources training and consulting firm dedicated to assisting companies to manage and develop their human capital. Visit www.barriegrossconsulting.com to learn more about Barrie and the services BGC provides.

Note: The information here does not constitute legal advice and should not be relied upon as legal advice. If you have a legal issue or wish to obtain legal advice, you should consult an attorney in your area concerning your particular situation and facts. Nothing presented on this site or in this article establishes or should be construed as establishing an attorney-client or confidential relationship between you and Barrie Gross. This article is provided only as general information, which may or may not reflect the most current legal developments or be complete.