Proper Documentation of Employee Performance: An Essential Element of Good Employer Practices

By: Daniel Block

It is a problem that occurs often in business. A supervisor fires a poorly performing employee because of the employee’s unsatisfactory performance. The employee contends that he or she was a victim of illegal discrimination based on his or her age, race, gender or some other factor. The employee files a claim with the appropriate government agency.

The supervisor says that the employee was terminated only because of his or her performance problems, but when the company’s legal counsel reviews the ex-employee’s file, he or she discovers that no documentation of any performance problems is in the file. No “paper trail” exists (which is one of the keys to establishing that the supervisor did not violate the law in terminating the employee). Instead of being able to show written evidence that the employee’s performance has been unsatisfactory over a period of time, and that the employee was timely informed of his or her performance problems, the company’s legal counsel may instead have to rely solely on the testimony of the supervisor and possibly other employees to defend the employer.

Unless an employee has an employment contract (or fits into some exception to the general rule), an employee in Colorado is an “at-will” employee. That means that the employer can terminate the employee for any reason or no reason, provided that the actual reason for the termination is not illegal. Unsatisfactory performance or insubordination by the employee, and (many employees are surprised to discover) even a personality conflict between the supervisor and the employee, are legal reasons for a supervisor to terminate an employee. However, the employee may put forth evidence indicating that the reason for termination given by the employer was just pretext for an illegal reason.

Proper written documentation of performance problems in a letter or memorandum to the employee completed by the supervisor when the problems occur, and as part of a regular performance appraisal process, is an essential element of good employer practices (documentation of performance problems created after termination of the employee, or even in preparation for termination, is a poor substitute for proper documentation—and this type of documentation should never be back-dated). Proper written documentation is a valuable tool to demonstrate the propriety of the employer’s conduct, and to avoid incurring liability for claims of illegal discrimination, retaliation, or other wrongful discharge where no improper conduct by the employer was present.

Proper Documentation of Performance Problems

While occasional, minor performance problems can be addressed through a discussion between a supervisor and an employee, overall unsatisfactory performance and more serious problems need to be documented. The supervisor should specify, in a letter or memorandum to the employee, the actions or omissions of the employee that are inappropriate, what steps (being as specific as possible) the employee needs to take to improve his or her performance, and the consequences to the employee if he or she does not comply. The supervisor should, however, avoid over-documentation by writing up the employee every time minor mistakes are made and/or listing insignificant matters. Space should be available on the document for the employee to write comments. The document should be dated and signed by the employee, with the employee receiving a copy and a copy placed in the employee’s personnel file.

The employee is not asked to sign the document to indicate his or her agreement with the contents of the document—but only to acknowledge his or her receipt of the document. A clear statement above the employee’s signature, which can be as simple as, “I acknowledge receipt of this letter (or memorandum),” is all that is needed. If the employee refuses to sign the document, the supervisor should write a statement to that effect on the document, and sign and date the statement.

Documentation of an employee’s performance problems should stay in the employee’s personnel file. Employers should not periodically remove old documents, because they might be helpful in the defense of a discrimination or other wrongful discharge claim.

Performance Appraisals

Giving employees performance appraisals is a duty that is generally recognized as an important part of a supervisor’s job, but one that is often neglected or avoided by supervisors.

Accurate appraisals, given on a regular basis (six months after the hire date, and at least annually thereafter), are not only tools that can protect business against liability if an employee is suspended or terminated; but they are also tools for turning poorly performing employees into satisfactory or even above average employees.

However, as important as appraisals are to business and their employees, no appraisal is better than an inaccurate appraisal. In addition, appraisals need to be given to all similarly positioned employees (to avoid an argument by an ex-employee that he or she was treated differently from those other employees).

The supervisor must provide an accurate assessment of the employee’s performance, and avoid assigning “average” rankings on areas of the employee’s performance for which the employee’s performance was really below or above average (unfortunately, it is common for supervisors to give unwarranted average rankings). The supervisor should include written comments; but they must be well thought out, and appropriate. The supervisor needs to give critical comments when critical comments are warranted, and the supervisor should give praise when praise is warranted. The employee should be given an opportunity to write a response on the appraisal form, and should sign the appraisal to indicate receipt of a copy of the appraisal.

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