Contrary to popular belief, the best way to protect an organization from discrimination lawsuits has very little to do with file documentation. Rather, the secret to minimizing legal exposure is to curb righteous indignation. The people who sue you are angry. The people who sue you are hurt. They are surprised. Embarrassed. Because they are angry, surprised, embarrassed and hurt, they want you to hurt.
An agitated young man enters a law office and declares loudly “I want to sue my company!”
The lawyer quickly surveys his new prospective client and states the obvious, “Let’s see, Bob, you are a white male, under 40 years old. I’m trying to think of an angle here.”
“What! You’re not going to take my case?” screams Bob.
“No, I didn’t say that,” replies the lawyer. “We’ll get the Evil Empire, Bob. We just have to be creative in how we do it." After a brief pause, his level of optimism appears to rise as he nods knowingly and continues, “You were limping on your way in here, weren’t you?”
An evil grin spreads quickly across the young man’s face. A file stuffed with lukewarm performance evaluations is about to be mined for gold.
Most organizations use performance reviews in large part to protect the company in case they get sued. HR professionals that attend fancy schools (like me) are taught that it is not safe to operate a business of size without them. If you challenge this assertion, they’ll introduce you to the corporate attorney who will stand behind them and pronounce boldly, “Yes. You must document the files.”
And yet, when you ask these same players a few minutes later to answer another question, they do it almost unanimously. “In your experience, more often than not, when an employee takes you to court, who introduces into evidence your performance evaluations? The company? Or the employee?”
After very quick reflection, the answer is almost always the same. “The employee,” they say in unison. Of course, they have a good explanation for that. The manager didn’t fill out the forms properly. Or, HR didn’t adequately train her to do so. If the manager had told the employee that he was failing in his job years ago when he started failing, we wouldn’t be in this mess. Instead, she told him that he “meets expectations” and tried to follow this with a heartfelt explanation that, “at Lake Woebegone Incorporated all the employees are above average. Therefore, to be average is really below average. In our organization a good grade is actually bad.” The jury, unfortunately, is seldom amused.
There are many reasons why the practice of assigning grades is ill-advised. Whether you use numbers, letters, or phrases makes no difference. The ritual detracts from the quest to produce behavioural change; gives a false impression that this year’s base pay adjustment comes primarily from last year’s contribution; makes 90 percent of your employees feel like losers while the remaining 10 percent are properly paranoid, etc. Let’s content ourselves here, however, to the folklore that grading employees is a necessary activity for creating a paper trail to fend off potential charges of discrimination.
Organizations that think they are protecting themselves by awarding grades and labels should talk to Coca-Cola. In 1999 they signed a check for $192.5 million to their black employees to settle a class action lawsuit claiming discrimination in pay, promotions and performance evaluations. Guess what determines pay and promotions at Coca-Cola? Of course: performance evaluations!
Coke thought that if their managers gave each individual the grade he/she rightfully deserved, they could document the files and protect themselves. If it just so happened that a protected class got a disproportionate number of low grades, they had a well documented case-by-case demonstration of equity and fairness. Coke might argue that this protects them against claims of “Discriminant Intent.” Unfortunately, however, it does not protect them against “Discriminant Impact.” You see, no one ever claimed Coca-Cola doesn’t like black people. They didn’t have to. They simply used the numbers to demonstrate statistical probability (p< .05 percent) that this protected class received too few high grades. It was simple math that Coke had no real recourse other than to acknowledge with a large check.
By the way, everyone seems to be a protected class these days. White males over 40 at Ford and Goodyear received checks of their own for class action settlements where performance evaluations were used to demonstrate what was alleged to be reverse discrimination. Again, the formal paperwork in employee files was used to assure victory for the passionate plaintiffs.
So how do we avoid death by documentation? Consider taking the following actions:
- Quit judging, labeling and critiquing and start coaching. Avoid grading employees like school children. Talk to your people. Coach them. Develop them.
- Learn to say to an employee’s face what you are saying about her behind her back. Do so diplomatically, but also assertively.
- Deal with issues when they come up and supplement ongoing tactical dialogue with a formal, more strategic career development discussion at least once a year.
- Abandon the use of PIPs (Personal Improvement Plans). Substitute a coaching approach that acknowledges strengths as well as identifying one or two areas for improvement that are job threatening. Include development recommendations, demonstrating you are committed to assisting a wayward employee in making mandatory improvements.
- Resolve performance problems quickly and definitively. Once you’ve told someone that his job is on the line, use 10 minute weekly check-up sessions to discuss progress or lack thereof – for those required changes only. Let him know that you will extend the interval following several weeks of satisfactory performance and will eliminate the special treatment completely once a full recovery has been made. Terminate the employment relationship if a pattern of failure becomes clearly established.
Garold Markle is author of Catalytic Coaching: The End of the Performance Review and No More Performance Evaluations! Gary is also founder and CEO of Energage, Inc. For more of his teachings go to energage.com.
