Q.  Our performance review process seems outdated and I’m not sure what to do. Do you have any suggestions?

A.  Employee performance reviews are probably one of the most loathed aspects of the workplace. Managers hate to do them. Employees hate to receive them.  In some cases, they can do more harm than good.

Consider the employee whose performance is mediocre. He is friends with his supervisor, however, and they often grab a drink after work.  Knowing that a negative performance evaluation may impact the employee’s annual salary increase, the manager looks the other way and gives the employee an evaluation rated as “effective.”

Or how about the manager who is reluctant to provide honest criticism on an evaluation for fear it will make it more awkward and difficult to work with the employee going forward? Or the employee who receives negative reviews but salary increases year after year?

On the flip side, consider the employee who tries really hard, but has a supervisor who is mean-spirited and does not want to see this employee succeed and possibly usurp his job?   Or the company that regularly reviews the employees of one department but not another?  Or the manager who rates everyone the same, regardless of their actual performance?

Some companies have been moving away from the performance review process altogether, and replacing it with a policy of providing regular, project-specific feedback to employees. Regardless whether you offer feedback on a rolling or annual basis, there are a few pitfalls to be aware of:

• Be honest. Performance reviews that do not accurately reflect the employee’s actual performance are damaging in many ways. In employment litigation, they often undermine the employer’s legitimate reason for terminating the employee and have a major impact on the outcome. And inaccurate performance reviews – whether they are unfairly harsh or fail to identify needs for improvement—have serious detrimental effects on the business. No performance evaluations are far better than inaccurate ones.
• Watch out for gender bias. One 2014 study of performance reviews in the tech industry found that women were significantly more likely than men to receive critical feedback in performance reviews. In particular, the study found that women were more likely to receive feedback on personality traits that was contradictory to men. For example, while a female employee may be labeled as “abrasive,” that same trait may be defined in a male employee as “confident” and “assertive.”
• Be consistent. It will be much harder to defend a termination decision of an employee for poor leadership if that same performer received regular annual performance reviews describing her as a great leader.
• Focus on the performance, not the person. The best evaluations provide feedback on performance, supported by specific examples. Thus, rather than labeling an employee as “negative,” focus on a specific example of an instance when the employee spoke to a customer in an inappropriate manner.
• Stay clear of euphemisms for age. Be careful not to label an employee as “slow,” or not savvy with computers. Instead, again, focus on specific performance issues and cite to examples of deadlines not met or projects not completed.
• Be sure to evaluate the employee on his or her performance throughout the entire year, and not just focus on recent events.
• Avoid surprises. Managers should not wait until review time to notify employees of issues with their performance. Rather, give consistent, honest and regular feedback to employees throughout the year.
• Provide measurable goals. The best evaluations provide specific, performance-based feedback with measurable goals for the future. This gives managers a roadmap to evaluate how the employee performs the next year. If performance does not improve, and the employee is fired and sues, reviews that told the employee what he needed to do to improve, and a chance to do it, are a tremendous aide in helping the employer win the litigation.