Small Business Documents, Part III—Performance & Disciplinary Reviews

By Beth Borrego / Published October 2022

Editor’s Note: Parts I and II in this series, “Small Business Documents: Protecting and Running Your Business,” were published in the June and July 2022 issues of CT respectively. To read the first two parts, visit www.cleanertimes.com. 

     There are employee documents that are periodic in nature, occurring at particular points in time or as needed, that are vital to any business. These include the employee’s performance review and notice of disciplinary action. Training is ongoing, and adjustments may be made for the benefit of guiding the employee and enhancing the training. Along the way, if performance fails to improve, then a notice of disciplinary action should be filled out and reviewed with the employee, outlining the corrective measures necessary to remedy the situation. The manager must then work with the employee to help to ensure success past this obstacle. Copies of both of these documents should be given to the employee, but the original copy should be retained in the employee’s personnel file. Feedback and support should be given as often as possible and as soon as a situation makes itself evident in order to take timely, corrective action and keep a current paper trail. Let’s look at each document individually.

Performance Review

     The primary purpose of a performance review is to strengthen and develop your employees and to encourage their growth and development. A thorough, well-written review should identify specifics, indicating areas where the employee has achieved goals. It should pinpoint areas of strength and weakness alike, offering a clear path to improving any deficient areas, while outlining and reinforcing the goals and objectives of your company as they relate to their job. If any pay increases or incentives are part of the review, these should also be clearly outlined and discussed. It’s also important to get feedback from your employees about management, since there may be opportunities for improvement seen by the employee that could make their job or workplace better or could benefit the clients the company serves.

     Your employees are entitled to a thoughtful and well-written review with constructive and detailed information designed to aid them in performing their work for the company. However, the success of the review will depend on both the manager’s completion of a thorough and thoughtful review and the employee’s ability to objectively respond to thoughtful and constructive suggestions for improvement. This is not always easy to do, and it’s important to schedule the review to avoid interruptions and to allow plenty of time for thoughtful and open discussion. It’s common for employers to give employees their first review sometime within the first 90–180 days of employment, with annual reviews thereafter. In contrast, disciplinary actions should always be done immediately or as soon as possible. 

     The open flow of dialogue between a manager and employee is always important. From time to time, it’s vital to ask your staff if they know what is expected of them in their current role, and if others they work with understand what they are expected to do. All of your employees should have a clear understanding of the objectives for the year and how they will achieve them as a team. Find out if your employees feel as though they matter and make a difference and are viewed as a valuable part of the company or not. Consider things like the morale of the team, and if they are likely or unlikely to help one another and offer encouragement. 

     Creating an evaluation means breaking down and compartmentalizing specific work attributes as they apply to any employee. Each compartmentalized segment would include several definitions, and the most appropriate definition would be selected for the employee at the time of the review. The scores act as a guide, allowing the manager to pinpoint areas at different levels of achievement. On a scale of one to four, with a one being low and a four being high, the numbers might be defined as follows:

4 = Exceeds expectations

3 = Sometimes exceeds expectations

2 = Meets expectations

1 = Fails to meet expectations

     These examples can be added to, subtracted from, or redefined to fit your company. Let’s take a look at what the individual sections of a review might look like.

     Quality of Work—consider the degree of commitment and the quality of the work produced by the employee. This section might cover how well the employee produces neat, timely, accurate, and thorough work based upon verbal or written direction. Consider if the work needs to be redone and how often, and if direction needs to be repeated or if the employee works autonomously. Let’s look at how a section might be broken down:

     Table 1 would be created for each section of the review. Now that you have an idea of how to break down and compartmentalize the performance levels, let’s look at other sections that would be appropriate in the review.

Dedication—have you considered how dedicated your employees are to their own success as an active part of your company? Have you taken the time to observe them as they arrive to begin their day? Consider if they arrive prepared to put forth their best effort and perform the highest level of effort. How prepared are they? Are they motivated to succeed, and are their efforts thoughtful?

Job Knowledge—each employee is unique and brings their own sets of skills to the company. During their employment, additional skills are learned or relearned. Skills may come from personal experiences, education, and training. Consider how well the employee embraces learning about new skills, new products, and the opportunity to learn new things that will benefit him/her and help him to do his job. How rigid or flexible are your employees when asked to learn new things?
Do they embrace and employ new methods or revert to old habits?
This area should also cover how well they have learned the material once they have been taught and how well it is applied to the job. Consider if they are able to learn something new and then help others with that skill, or if they struggle to master it. Define your levels based upon the retention and use of the knowledge as it translates to performing the job. 

     Productivity—how well your employees manage their time and their rate of productivity can dramatically affect their ability to manage and perform the tasks they must perform and can prevent them from completing them in a timely fashion. The ability to multitask and to break down and successfully complete a list of tasks in order to complete a job is important to master. Consider if the tasks assigned are completed ahead of schedule, on time, or behind schedule. It’s important to determine if the employee is able to remain focused and orderly or if he or she seems distracted and is easily taken off of task. Observe if any tools such as a punch list are being used to verify the completion of all of the steps in the job. 

     Initiative—the degree of effort and the desire to stay active and on task is very important in reviewing performance. While some workers complete their tasks and then look for, identify, and complete new tasks, others may stop working and wait until they are told to begin a new task. Consider the level of motivation and the dedication of the employee to continued productivity. Independent thought and resourcefulness should be looked for, and a lack of it should also be noted. 

     Work Ethics—the degree to which an employee adheres to policies and procedures, their treatment of confidential information, and their commitment to work are all part of an employee’s work ethic. The commitment employees demonstrate toward their work schedule, their coworkers, and adding value to the company is also important to include in this area. How well they maintain their work environment with regards to cleanliness and maintenance should be noted. Their personal grooming and manner should be considered as well. An organized workspace should be considered in contrast with a sloppy and disorganized one. 

     Problem Solving and Decision Making—do your employees recognize and analyze problems, evaluating potential solutions before making recommendations to you, or do they just bring the problem directly to you? How well do your employees handle stress and frustration on the job, and what is the typical outcome? You should be able to note if your employees are able to demonstrate superior problem solving skills in unique situations, or if they’re unable to recognize and solve simple and routine problems they have encountered before. It’s important to consider if the need to problem solve causes them to become distracted and go off of task, or if they are able to remain motivated and focused while getting back on track.

     Working Relationships—the quality of the relationship exhibited by the employee when interacting with coworkers and clients is important and represents an effort to put their best foot forward, so to speak. Consider attributes like leadership, cooperation, teamwork, and diplomacy. Is the employee supportive of other staff, and are they able to motivate and help them? Does the employee express concern for coworkers and the company? Look for differences such as cooperative and uncooperative behavior, clear or inadequate communication, and varying degrees of supportiveness or unresponsive behavior when defining this segment. 

     Attendance and Punctuality—Factors such as start and end times, observing and recording break and lunch times, and accurate recording are important. Look for patterns in tardiness, absences for sick time, or requests for time off without completing the appropriate request form. Does the employee consider the company’s schedule and request time off with the least possible disruption to the workflow? Consider if the employee is constantly early or on time and looking for extra ways to help get the workdays started, or if they frequently arrive late once others have already begun to work. 

Discipline & Termination

     Eventually you’ll have to do what most will tell you are the most unpleasant tasks that any manager has to perform. No manger likes to discipline or terminate an employee, but the reality of being an employer is that no employee is perfect, and your staff will eventually move on to other jobs. However, while they are with your company, you owe it to them and to your business to provide them with the best-structured feedback you can in order to give them the best chance at success at your company. This is by no means easy to do. We hope that this section offers thoughtful guidance when you need it most. 

     Any good manager knows that discipline is not synonymous with punishment. Employees take jobs to earn a living; this is true. But if you ask any new hire, you will find they are generally hopeful and eager for a
new opportunity to learn and grow. It’s easy to see why it is important to remain respectful during any disciplinary measures and discussions you may have. 

     Avoid talking down to your employees. Communicate with them on an equal level, peer to peer, without admonishing them or scolding them, and never reprimand any employee in the presence of a fellow coworker. Calmly discuss the situation and lay down a foundation for the corrective measures that can be taken to address the issue to keep it from reoccurring. Prepare what you have to say, and make sure that you do not target the employee with your statements. Instead ex-plain how the behavior causes a problem so they see why it needs to be corrected. 

     From time to time, an incident involving more than one employee may arise; should this happen, it is extremely important not to take sides. Listen to everyone involved individually, as well as any bystanders who may have seen the incident. Then be fair about how you proceed with those involved. Don’t rush to a snap judgement based upon a lack of information and a one-sided story. Always gather as much information as you can and weigh it carefully before taking action. A good manager is fair minded and levelheaded. A bad manager loses employees who were often good or had the potential to become so, but he or she didn’t see it because they didn’t slow down, step back, and evaluate.

     Before you discipline any employee, you will have to make sure that you’re familiar with the law and the various types of discipline. Discipline can be something as mild as coaching or as serious as verbal or written warnings (see page 56). While federal laws don’t outline specific plans for discipline, applicable state laws should be looked at, as well as other laws such as the Worker Adjustment and Retraining Notification Act (WARN) and the National Labor Relations Law, to see if they impact your business or not. 

     Make certain that all of your company documents are in step with the law. Don’t leave your company vulnerable. Beware of the following:

     Any poorly crafted company policy that doesn’t protect your right to terminate at will. 

     Any company document that doesn’t clearly delineate both expected and unacceptable behaviors. 

     Any document that doesn’t require a signature by the employee upon completion of reading it. 

     All discipline methods are based on the idea that there is a goal or benchmark that needs to be met and that not meeting it puts something into motion. You can approach that in a punitive or rehabilitative manner. It comes down to your preference, both in what you think will work best for your business and what you are comfortable using. Let’s take a look at several options.

     Progressive discipline is the process where you increase the level of severity of your discipline when an employee fails to correct an issue. This is a commonly used method that often begins with a verbal warning, followed by a written warning, and then by termination. It’s a common approach because it tends to protect employers from legal action, but not everyone is a fan. This generally takes a punitive approach, but you can mix other elements such as coaching or training into it. If progressive discipline is your preference, and you are in a state where the employee handbook is viewed as contractual, it may keep you from immediate termination no matter what the circumstances. You may want to clarify under what circumstances progressive discipline will be enacted, and when immediate firing (employment at-will) is in effect. In other words, specify which offenses are severe enough to warrant immediate termination and which have the potential to be corrected.

     Coaching, training, and performance improvement plans are less about fixating on a problem and using the threat of termination, and instead are about viewing each employee as valuable and worth investing in. They are both educational and rehabilitative in their approach. Performance improvement plans (PIPs) may have check-in points, measurable goals, and a process to help an employee if he or she doesn’t meet these goals. Various types of training may be on subjects that are a part of the job. These training modules are designed to document that the employee has been given training and to reinforce the content. Often these training modules may be given to all employees or to all newer employees so that they are not viewed as singling out one person. However, there will be times when retraining is specific to just the one person who is having trouble. It should be viewed as an educational opportunity, and it is a good idea to ask the employee questions about the content to make sure the employee has understood it and  absorbed it. 

     Reassignment or suspensions are often associated with behavioral issues or severe conflict in which the employee has to be removed from a situation immediately but termination isn’t called for. Reassignment means retraining, while suspension means some condition must be met before the suspension is over or the employee is terminated. However, unless your company is big enough to accommodate this type of measure, it may not always be possible. 

     Perhaps one of the least favorite tasks any owner or manager faces is disciplining an employee. It’s important to have a template that you can fill out should the need arise so that you can easily document any disciplinary actions you need to take. The document should include the employee’s name, the date of notice, the name of the manager, and the employee’s job title. It may contain check boxes listing possible offenses, like tardiness, absenteeism, insubordination, quality of work, quantity of work, safety, drug or alcohol use, and perhaps a category of other with space for a description. A date of occurrence should be placed in this portion of the document and filled out. Next, you might include a section to fill in the details of the occurrence and any impact it has had on the company. The impact to the company is important and should never be left out. You will need to provide a section for corrective action to be taken and outline that as well, specifying if there is or is not suspension, if pay will or will not continue, and the date range with the first and last day so noted. Next you’ll create a section detailing the expected improvement and including a clear statement outlining the consequences of failing to improve as directed. You’ll also want to allow an area for your employee to make a statement regarding the discipline. If needed, provide additional paper for them to use so their statement is as complete as they would like it to be. At the end of the document, provide spaces for both the employee and the employer to sign, and a witness such as another manager, owner, or human resource representative. Place the original in the employee’s personnel file and give them a copy to keep.