In all realms of employment law, from small businesses to large corporations, the management of the employment relationship with any employee comes down to making a decision based on the employee’s performance. This is particularly true in matters of termination, promotion, and other areas where the road forks in that affiliation between employer and worker. As my colleagues in the real estate industry’s oft-cited motto is “location, location, location,” a similar three-word mantra holds for the management of employee relationships and for handling times of change, good or bad, and that is: “documentation, documentation, documentation.”
While the issue of documentation regarding an employee often arises in those difficult times, such as demotion or termination of an individual, having documentation to help compare and contrast the employee with high performers is also important. Through the notations in an employee file of quarterly and annual reviews, compliments and complaints, successes and failures, and in those situations of employees who just aren’t the right fit, all should be documented and retained in a secure digital or physical personnel file to provide a clear picture of the employee.
Too often it is realized only too late that documentation to justify a legal and valid termination based solely on business factors has not been retained. For many companies, particularly smaller ones with limited or no human resource departments, this knowledge comes after a terminated employee has filed a claim with a state Human Rights Department or the Equal Employment Opportunity Commission, or issued a demand letter through their attorney. Without a record of shortcomings, issues, attempted corrective actions, or other preserved materials detailing the concerns in the employment relationship, fact finders, such as administrative law judges at the agency level or judges in a court of law, have only the testimony of the parties and their co-workers to lean on in making their determination.
A well-documented employee file can help short circuit those claims. The file also works to eliminate any suggested causal connection between an attempted whistleblower action, discrimination claims, or retaliation for protected reporting of issues by the employee which often follow termination. Further, in the instance of promotion or backfilling into a position, positive information retained in the file about the replacement employee can support the reasoning behind hire or promotion and help further insulate an employer against claims of discrimination by others not advanced.
Annual reviews of any nature, such as self-evaluations, face-to-face supervisor-employee meetings, or 360-degree discussions and documentations by teammates can carry with them an air of tediousness. But they serve a purpose in not only setting future goals and helping an employee advance in their career, but as documentation of the baseline of the employment relationship. Additionally, they create a paper trail of changes in responsibility, performance, corrective action, and dozens of other aspects that impact both the workday and long-term legal relationships between an employee and an employer. While in a situation where a claim has arisen, and some favorable feedback is available for a difficult former employee to lean on, most attorneys would agree that having more documentation of any kind, is better, even if it cuts against the case.
Regardless of the business’ size, documenting employee performance on a regular basis, noting problems and issues that arise, along with corrective actions taken by both parties is as important as any other workplace responsibility. Consider establishing a strong human resources policy of documentation for all workplace issues that arise with an employee, if not for the investment in that individual’s growth, then for the protection of the business’ productivity and employment brand.
Nick Simonson is an attorney with Fryberger, Buchanan, Smith, and Frederick, P.A. specializing in business, employment and contract law. To help establish best-of-breed employment practices in your business, contact him via email: email@example.com.