14 October 2014 A flattering performance appraisal can be your undoing

By Warwick Ryan, Partner

In Brief

We all try and see the best in people, right?  We have been told that if you compliment and encourage people their behaviour will improve, correct?  So, shouldn’t a performance review emphasise the positive to get the best out of your staff? Yet, in a recent decision of the Fair Work Commission, an employer was penalised for not being more brutally honest in performance reviews.

The Facts

In this case before the Fair Work Commission, there had been a long history of negative attitudes and behaviours by two employees.  The employer allowed this to be handled "informally" by line managers over a number of years.  There were no "formal" disciplinary processes to deal with this negative attitude.  Further, over a course of a number of years the employees had been assessed as being "satisfactory" by the employer in repeated performance reviews.

Finally, after many years, the team leader recommended the behaviour of the two employees (i.e.  their persistent negative, hostile and aggressive behaviour in team meetings) be investigated. 

Subsequent to this investigation, the employees were terminated.  However, both employees lodged unfair dismissal applications.

In response, the Fair Work Commission found against the company and ordered the reinstatement of the two employees, despite a long history of a negative attitude by them. 

There are a number of reasons for the reinstatement.

However, a fundamental problem for the employer was that in their annual performance reviews of the two staff, the line manager did not document the employees' persistent negative attitude.  Accordingly, the Commissioner was happy to rely upon these performance reviews as assessing the employees as "satisfactory".

The lesson from this case is that if there are issues with the employee's conduct, even though you want to bring out the best in them, it is critical that you raise such poor behaviour with the staff member during performance reviews and document it in written form.  If you fail to communicate their deficiencies to a poorly performing or improperly behaving employee, it may well come back to haunt you, if you subsequently move to terminate their employment.

In short, honesty is the best policy in performance reviews.

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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