Does your company rely on performance reviews for evaluating and managing employees? Probably; performance reviews are a staple for human resource professionals when it comes to evaluating employee performance. Neuroscience, however, is calling into question the value of such reviews.

The Science Undermining the Value of Performance Reviews

Specifically, in “Risks of Reviews,” (article by Chana Schoenberger of the Wall Street Journal) discusses research that suggests performance reviews are detrimental to employee performance:

… researchers concluded that the very act of giving employees a rating jolts them into a ‘fight or flight’ scenario … the same type of ‘brain hijack’ that occurs when there is an imminent physical threat like a confrontation with a wild animal. The employee may not say anything overtly but he or she feels disregarded and undermined–and thus intensely inclined to ignore feedback …

But before your company decides to scrap its use of performance reviews, it is important to remember that employment discrimination claims often turn on an employer’s ability to demonstrate performance deficiencies that predate the alleged discriminatory conduct. In this regard, performance reviews are invaluable:

• Performance reviews frequently are the best source for showing that the plaintiff had a documented history of poor work performance that predated any initial allegation of discrimination.
• Poor performance reviews may dispel any inference of causation between the alleged discriminatory activity and the adverse employment action; and
• A strong showing of a plaintiff’s poor work performance can show that the employer did not have a retaliatory motive.

But performance reviews are a double-edged sword in that failing to conduct meaningful evaluations can be used against an employer defending against a discrimination claim. This is because a plaintiff could contest an employer’s legitimate reason for its actions by showing that the plaintiff had received only positive performance reviews before the discriminatory conduct or engaging in protected activity.

We recently represented a manager in a reverse race discrimination lawsuit and used this strategy to successfully defeat the defendant employer’s motion to dismiss the claims. Specifically, we were able to show through records and deposition testimony that for the five years before the plaintiff’s termination, he was an exceptional employee. This was evidenced by the former employee having received good to great performance reviews, promotions, multiple raises, and performance related bonuses arising out of the performance of his team. In short, the employer’s reason for terminating this manager for poor performance was not credible when contrasted to the personnel file and associated performance reviews.  

Should Your Company Use Employee Performance Reviews

I don’t think employee performance reviews will go away. If done properly, such reviews can prove valuable to employers. This value is in the form of improving employee performance and providing objective evidence to counter allegations that an adverse employment decision was the result of unlawful discrimination.

But the value comes from conducting an honest and meaningful assessment of employee performance. Simply going through the motions is not enough. Worse, ignoring performance issues may provide ammunition in favor of the employee in a subsequent employment discrimination lawsuit.

For more information about conducting performance reviews or complying with federal and Michigan employment laws, contact employment attorney Jason Shinn. He routinely works with employers for implementing HR best practices for complying with employment laws and regulations. This work further includes providing recommendations when it comes to high-risk terminations.