Blog Post: Why Bother With Performance Management? The Jury Speaks.

We are all busy people. When faced with a packed calendar and a bursting in-box, performance reviews fall to the bottom of the pile of to-dos. In light of the current economy and the reality of layoffs, rifs and terminations, we all need to be mindful of the role that performance reviews play before a jury, in a lawsuit addressing a termination.

• 67% of jurors feel that too many workers are treated unfairly by their employers;
• 56% "agree" or "strongly agree" that executives will lie to increase profit;
• 57% "agree" or "strongly agree" that the best evidence of an employee's performance is his or her performance reviews;
• 91% think that a company is negligent if it does not properly document an employee's performance problems; and
• 78% of respondents agree that "many companies destroy documents hoping to avoid taking responsibility for things that they have done".*

If you really take a minute to digest these statistics, you will run to your desk and start madly filling out forms. Over ninety percent of jurors polled believe that a company is negligent (i.e. the employee wins at trial) if the employer fails to document performance problem. Being "negligent" at its essence means that someone (here a company) breached (or failed to meet or satisfy) a duty owed to another (here an employee). So, jurors believe that a company owes a universal duty - a duty not codified in any statute or regulation - to document an employee's performance issues.

Woah.

But, you may ask, how could this be true when Colorado is an at-will state? Employees may be terminated for any reason or no reason at all, as long as the reason does not violate the law, so must employers really refrain from terminating an employee until after a mountain of paperwork is created?

The answer depends on one thing: your tolerance for risk and cost. On one hand, Colorado is an at-will state. On the other hand, juries decide liability in many trials. Jurors want fairness. Jurors want employees to be given a chance to hear about their failings. They want employees to have the opportunities fix problems.

Realistically, in business, there are times when an employer can not take the time to create documentation. Sometimes the employee's behavior does not allow for the time to document the problem. Sometimes the employer lacks the funds to keep the employee on staff. Sometimes morale or other intangibles necessitate immediate termination.

The way to avoid this quandary, the way to be able to terminate someone when the time is right, involves diligence and detail. If supervisors take the time to create thoughtful, accurate documentation, then they will find themselves in a position with options. If employees receive thoughtful feedback, they are more likely to feel that their separation was fair, and that they were treated with dignity. And options and dignity are both good things.

Laura J. Hazen is a Director at Ireland Stapleton Pryor & Pascoe, P.C. In her employment practice, Hazen provides day-to-day advice and coaching to public and private companies on various employment matters. She also has an active litigation practice where she concentrates on representing business in all aspects of complex business and employment disputes. You can contact her by email at lhazen@irelandstapleton.com or by phone at 303-623-2700.

This article is intended as a general discussion and information on the topic covered, and is not to be construed as rendering legal advice. If legal advice is needed, you should consult an attorney. This article may not be reprinted or reproduced in any manner without prior written permission of the author.

*Gallagher, Sean R., Kathryn E. Miller & Jessica Brown, The Practitioner's Guide to Colorado Employment Law, First Edition, Supplemented June 2004 and September 2006, Colorado Legal Education in Colorado, Inc. 2006, updated June 2004, pages 20-3-4, internal citations omitted.