How to create a legally defensible performance management system.

How Legally Defensible is Your Appraisal Management System?
One of the issues that must be considered when evaluating a performance management (PM) system is how well it would stand up in court. Not surprisingly, legally defensible PM criteria is in line with the criteria for good performance management systems. According to Aguinis (2007), good performance standards are related to the position, concrete, specific and measurable, practical to measure, meaningful, realistic and achievable, and reviewed regularly.

Management researcher Stanley Malos (1998) created a concise list of criteria for making performance appraisals legally defensible. Below, we will provide information from Malos (1998) and an explanation of each recommendation:
Standardized: the PM approach should be consistent for all employees in similar jobs. There should include procedures to detect and reduce potential biases in the system. For example, the employee should be able to appeal to a department outside theirs (e.g. Human Resources) if they suspect that PM did not accurately reflect their on the job behaviors and performance.
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Job-related: it very important to use job analysis to define performance standards (Aguinis, 2007). Using job analysis ensures that the performance dimensions are linked with the requirements of the job, which enhances employees’ perceptions that the appraisal is fair (Gilliland & Langdon, 1998), and will be less likely to lead to legal challenges.

Behavior Based: you want the appraisal to be about job performance, not aspects of the employee that the individual cannot control. Aguinis (2007) states that behavior based performance appraisals work best when the relationship between behaviors and results are not obvious, the outcomes of a project are not immediate, and performance is not entirely in the control of the employee (e.g. machinery breaks down, and the employee is unable to produce the target amount for that shift).

Communicate Expectations: The employer should explain the performance appraisal system and expected behaviors that the employees will be rated on at the beginning of the PM cycle. Employees need to have the opportunity to improve their performance. It is important to set specific performance expectations and give adequate time for the individual to make changes. There are other practical and legal benefits to managing expectations. Giving frequent performance feedback to employees enhances perceptions of fairness in the appraisal system (Gilliland & Langdon, 1998).

According to Malos, the organization should take several additional steps. The system should be regularly documented for each employee with information about specific behaviors. Supervisors should be trained in how to manage employees’ performance, give regular feedback, and conduct PM tasks. Another strategy to improve legal defensibility is to use multiple people in the organization to provide performance ratings.

The bottom line is that organization can take steps to prevent legal action in part by ensuring that the system is perceived by employees and management as fair- free from bias and based on actual performance. The system should include checks to ensure that performance ratings are sound and that employees and managers have a voice in the process.

 

 

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