Gruntled Employees

The dumbest managerial tool: annual performance reviews

A recent article in The Wall Street Journal discusses some of the problems with annual performance reviews and how a few companies are abandoning them. In the article, ("Performance Reviews Lose Steam," Dec. 19, 2011), Rachel Emma Silverman mentions that even HR professionals recognize the flaws in the system:

Performance reviews have long received poor grades, even from those who conduct them. Nearly 60% of human-resources executives graded their own performance-management systems a C or below, according to a 2010 survey by Sibson Consulting Inc. and WorldatWork, a professional association. And one academic review of more than 600 employee-feedback studies found that two-thirds of appraisals had zero or even negative effects on employee performance after the feedback was given.

Silverman writes that about one percent of companies are ending the practice, citing a report of the Corporate Executive Board. Well, it's a start, I guess.

In Chapter 8 of Firing at Will, I discuss annual performance reviews at length, calling them "the dumbest managerial tool." Here's why:

First of all, emphasizing that employees’ performance should be measured on an annual basis suggests that there’s less reason to measure it on a more-frequent basis. That’s insane. First of all, who can possibly remember how a particular employee was performing ten or eleven months ago? So what ends up happening is that the past month or two get undue weight in the “annual” evaluation.

Second, if the purpose is to correct poor performance or behavior, why would you wait till the end of a year to do that? Performance and behavior issues need to be dealt with when they arise, not saved up till the end of an arbitrary twelve-month period. Similarly, if the appraisal is intended to reward good behavior or performance, why in the world would you wait? “Hey, Alice. That thing you did back in March was terrific. Way to go.” Alice: “Huh?”

Third, if the purpose is to tie the evaluation to a decision about a possible pay increase, that’s also foolish. In a well-run and well-managed company, pay decisions should be made on the basis of the employees’ individual contributions on an ongoing basis, not based on the mere fact that they avoided attrition for another calendar year.

My fourth problem with the annual basis is that managers tend to blow it on the timing. I always did. An evaluation that was intended to go out in early January would just as likely get finished in late March. That’s normal, because managers usually have more-important managerial tasks to accomplish, like running the actual business.

The problem is, if you tell your employees that you’re going to do annual performance appraisals in January, they’re going to expect to receive them in January, along with some sort of a pay raise. When January slips into February and then March finally comes around, those employees are going to be unhappy with you, even if they know you’ve been busy doing real work.

Companies end up using performance reviews as a crutch in place of actually managing their employees real-time. In fact, the reviews do more harm than good. Don't be part of the 99%. Get rid of annual performance reviews, and instead teach your managers to manage.

Millennials don't want 9 to 5

Dan Schwabel writes at TIME.com that millennials are forcing employers to think differently about how they structure the workforce:

Aside from the early adopters of workplace-flexibility programs, many other companies are hesitant because of the traditional “command and control” approach laid out for older generations. The challenge these companies face is letting go and trusting their young employees — even when they are telecommuting or using Facebook regularly at work.

Many companies fear that, without structure, employees will be distracted, not as engaged and less productive. In fact, the opposite is often true. A trusting work environment breeds more-loyal employees and increases efficiency.

via moneyland.time.com

Cosmic Law and social media

So I'm having a #LegalChat this morning on Twitter, and the subject of …

Pardon? Oh, what's a "#LegalChat"? It's an open conversation on Twitter where people can choose to participate and discuss a particular topic by tweeting something and adding the hashtag #LegalChat at the end of the tweet. Or you can just lurk, and read the different entries without adding your own. (Nothing wrong with that.) You don't need to be invited, and the group is obviously self-selected. But only people who are interested in the topic would bother.

Today's #LegalChat was about the legal implications of social media — a timely topic. (See "Vote 'Yes' on social-media law.") An incredibly bright bunch of social-media experts and lawyers joined in with questions, answers, and tips. One of the recurring themes was how to help companies and individuals protect themselves while using social media — short of abandoning it altogether.

Since I've written here about my antipathy toward draconian social-media policies, I thought I'd share my take on how social-media users should protect themselves. Here's what I tweeted on the #LegalChat discussion:

@VMaryAbraham: SM users can protect themselves by assuming that the wrong people will see what they write. It's cosmic law. #legalchatless than a minute ago via TweetDeckJay Shepherd
jayshep

[@VMaryAbraham is the well-respected blogger, lawyer, and knowledge manager who asked the question.]

Since I have more than 140 characters here, let me explain:

The advice I give people using social media — or anything that's written electronically — is to assume that the person you most want not to see it … will see it. (This is actually a corollary to our firm's First Rule of Litigation: The other side will always learn what you most want them not to learn.) Over 17 years of employment litigation, I've seen it happen too many times not to believe that it is actually Cosmic Law (or at least an offshoot of Murphy's Law).

All too often, people either (1) don't even think about the possibility that the wrong people will read what they've written, or (2) underestimate the likelihood that it will be seen. Either way, they end up with the embarrassment (or worse, the litigation) that comes from the wrong people reading the wrong things.

Never assume that people won't find what you've written. Lawyers can be pretty smart, and we can often find things that you think you've hidden. (See my recent Above the Law post, "Social Media and Breast Implants.")

If you follow Cosmic Law, then there's no need to avoid social media or be burdened by restrictive social-media policies.

What do you think? Is following Cosmic Law enough? Do you think it isn't Cosmic Law? And when exactly is the Cosmic Law bar exam?

Vote "Yes" on social-media law

It's kind of exciting to witness the birth of a new area of law. (OK, maybe it's only exciting to lawyers. Look, we need the excitement, all right?) When new things arise in society at large, the law has to play catch-up. Thus the civil-rights advances in the 1960s led to discrimination law. The rise of the Internet in the 1990s led to a brand-new area of Interwebs law. Terrorism at the turn of the century led to a body of terrorist-related law (not to mention the whole PATRIOT Act). And so on. Since law is an industry that tends to favor precedent and authority over innovation, it can take us a while to get our act together.

Now it's social media's turn. Over the past five years, it has become clear to even the most Luddite of lawyers that social media is not a fad, that it's here to stay, and that it's rife with issues that will eventually involve lawyers. Which means we're going to need an area of law called social-media law. (Yes, with the hyphen. When you use it as a phrasal adjective before a noun, you hyphenate it. End of lesson.) And which also means we're going to need social-media lawyers.

[Important aside: I am not advocating that we need to hyperlegislate social media, and I am not saying that it's a good thing that we need lawyers in this area. It's just a fact. When humans interact, they get into disputes. You can choose to resolve disputes with lawyers, or you can resolve them with fisticuffs. Your call. Plus it's hard to punch people over the Internet.]

Right now, with a vacuum in the area of social-medial law and a dearth of social-media lawyers, employment lawyers are stepping up to fill the void. Unfortunately, most of them are taking what I call the "No" approach. These are the folks who are drafting blog policies like Harvard Law School's. (See "A two-word corporate blogging policy.") And LinkedIn policies that try to prevent departing employees from keeping their own contacts. (See "Who owns an employee's LinkedIn contacts?") And Twitter policies designed to, well, keep people off Twitter. (See "A twitterable Twitter policy.")

[By the way, Doug Cornelius (@dougcornelius) has accumulated an amazing database of well over 200 social-media policies on his Compliance Building blog. Most of them are exactly what I'm talking about — written in the "No" approach.]

As employment lawyers, they know all about drafting employee policies. But more often than not, they don't know much about social media. Which is a problem. When I see an announcement for a lawyer seminar on social media, I check out the bios of the lawyers presenting to see what their social-media creds are. I look to see what their blogs are called, how many Twitter followers they have, and how active they are on LinkedIn. What I usually find is nada. No blogs, no Twitter. No Klout score. Maybe a perfunctory listing on LinkedIn. In other words, they're not exactly social-media mavens.

[Quick note on Klout: By mentioning this new social-media "scoring" site, I'm not saying that it has any particular importance. It's just one company's way of measuring an individual's traffic on the Interwebs. For a decent introduction to Klout, read this article by The Boston Globe's Beth Teitell, "Ascent of the social-media climbers."]

And if they're not active in social media, they're much less likely to understand what makes social media the human phenomenon that it's become. Which means that they're more likely to tell their corporate clients that they should fear social media, and that they need prohibitive policies to minimize the chance of Very Bad Things happening.

I for one prefer the "Yes" approach. Yes, social media is here to stay. Yes, employees are going to tweet and Facebook and make connections with people on social-media sites. Yes, these employees can act as effective brand ambassadors for their companies, and they should be encouraged to do so. Yes, sometimes Bad Things relating to social media might happen, but we'll deal with them. We don't need draconian policies to prevent people from acting like idiots. People are going to do that from time to time anyway. Why throw out the good along with the bad?

If you have a company who wants restrictive social-media policies to prevent your employees from connecting with other people over social media, absolutely do not call me for help. (Or fax me. Or telex me, or whatever you guys are still using for communications.) You're not going to like what I'm going to tell you anyway.

But if you have a company and you understand that social media is a way for your company and your people to interact with the world, and you want guidance in this new area of social-media law, call me (617.439.4200). No, better yet: reach out to me on Twitter (@jayshep) or LinkedIn. I look forward to connecting with you.

• • •

Update Right after posting this, I noticed an article on Inc. magazine's site, "How to Avoid a Social Media Lawsuit." (Yeah, no hyphen; right off the bat, you know it's suspect.) It pretty much proves my point. All kinds of "No" approach here. Even worse is an older linked article called "How to Write a Social Media Policy." Besides advocating that companies consider eighteen different policies, it also recommends a $149 "social media policies toolkit" so that you can roll your own. Yeah, you should definitely do that. If you're an idiot. Unbelievable. [Hat tip to @kevinokeefe.]

Who owns an employee's LinkedIn contacts?

Or Facebook friends? Or Twitter tweeps? If an employee is using these social-media sites in his or her professional capacity, does the employer have the right to take the contacts away once the employee leaves?

The correct answer is: shut up.

Seriously. If you're an employer or a manager and you're seriously asking these questions, you just don't get it when it comes to social media. You're missing the whole point of these social-networking sites.

Now pause for a minute before you go ballistic on me in the comments below. Remember: I'm a management lawyer. I'm on your side.

But the whole point of having your employees on these sites is to broaden the reach of the company's brand. Making connections with other people — customers, prospects, vendors, referral sources — by combining the employees' personalities with your company's brand identity is what it's all about.

And there's a trade-off here. Your company's brand reputation (ideally) helps your employees raise their own personal stature online. But if they leave your company, voluntarily or not, they have that stature to take with them. And there's nothing you can do about it. That's the implicit bargain you make with your employees when you use them as ambassadors for your brand.

That's why it drives me batspit crazy when I see other employment lawyers sounding alarms of doom and drafting small-minded policies about retaining social-media contacts for the company after the employee's departure. See, for example, "Who owns the salesperson's LinkedIn accounts?" Or a similar article here. There's even a discussion on this at LinkedIn itself.

Seriously, cut it out. If employees put themselves out there in cyberspace, even on the company's behalf, they can take their online connections with them when they leave. If you can't abide that, then maybe you do need a policy barring social media. Just don't come to me for that, because you're not my kind of employer.

On the other hand, if you're the kind of enlightened employer who sees the real value in having your employees connect with people who might lead to more business, and you understand that there's always a risk that those contacts will leave with your departing employees, then definitely give me a call. We're kindred spirits, and I can help you.

One more thing: Much of my legal work involves noncompetes and trade secrets. And one of my favorite tools for investigating whether a departed employee is violating agreements or stealing trade secrets is searching through social-media sites. Just because I sound all "Kumbaya" about social media doesn't mean that I won't use it like a hammer to win a lawsuit. (Just sayin'.)

What do you think? Does your company have LinkedIn policies about whose contacts are whose? Do you think you need them? Sound off in the comments.

Job fair for ex-cons begins Nov. 4, only in Massachusetts

Massachusetts has enacted a new law making it harder for employers to learn whether job applicants have criminal records. On August 6, Governor Deval Patrick signed the new Criminal Offender Records Information Act (CORI), which goes into effect in stages. The law makes Massachusetts the only state to prohibit most employers from asking about criminal records on job applications. Because with the unemployment rate as high as it's been in 20 years, this is what we want the state to focus on. Riiiiight.

All Massachusetts employers should now review their forms and procedures, and most will need to make changes to its application and recordkeeping processes. Here are five things you need to know:

1. You can’t ask applicants about criminal history (at first). Until now, Massachusetts had fairly complicated rules on what you could and couldn’t ask applicants about any criminal past. The new law simplifies this: You can’t ask at all on the initial job application. The only exceptions are the rare circumstances where an employer legally can’t hire a convict, or where a convict would be presumptively disqualified by law. This restriction starts November 4, so you have less than two months to change your applications.

2. But you can ask after the initial job application. The thinking here is that applicants with criminal histories won’t be automatically rejected without the employer first considering their qualifications. So you can still ask applicants if they had run-ins with the law — just not on that initial application, which is where most employers do it now. Of course, the new law makes it harder to verify what they tell you, because ...

3. More criminal records will be sealed earlier. Under the new law, misdemeanor convictions will be sealed after only five years (after conviction or release from prison), and felony convictions after ten. (This provision doesn’t go into affect until May 4, 2012.) There are a few exceptions, like certain sex crimes, murder, and manslaughter, as well as subsequent convictions. So while the new law doesn’t allow applicants to lie about older convictions, employers are prevented from learning about them. Oh, wait. The old law already allowed criminals to lie about sealed convictions. If an ex-con has a sealed record, the law allows him or her to answer "no record" when applying for a job. Nice ...

4. And it will be harder to perform CORI checks. Before doing a criminal-record check, an employer needs to verify the applicant’s identity and get his or her written authorization. If the employer then rejects the applicant based on the CORI results, it must first present the applicant with a copy of the results. If an employer conducts more than four CORI checks a year, it must develop a written CORI policy. Call your employment counsel for help with this policy if you think you’ll be doing multiple CORI checks.

5. There are also new recordkeeping requirements. An employer has to keep applicants’ written authorizations for CORI checks for a year afterward. On the other hand, employers can’t keep the results of CORI checks beyond seven years after either the date the applicant was rejected or the date the employee terminates. And there are serious penalties for employers who improperly share the results with third parties. Under most circumstances, an employer cannot share these results at all.

Do your job applications comply? If they look like most applications, they probably don't. You better start thinking about revising your employment application, as well as setting up a CORI policy (if you need one). You've got two months.

Think this is a good rule? Does the benefit of maybe preventing snap judgments by employers outweigh the impropriety of having the state censor otherwise-public information? Share your thoughts in the comments below.

Massachusetts hides antiemployer HR rule in "probusiness" law

Massachusetts law has long required employers to give workers access to their personnel files upon request. Which is fine, I guess. But a new change to the law now requires companies to notify employees about any potentially negative information added to their files. The amendment, which Gov. Deval Patrick signed into law on August 5, was tucked away in an “economic development” bill laden with higher-profile items like the recent sales-tax holiday. (To see how "probusiness" the law is, check out the Governor's press release from the signing. No mention of this provision, natch.) I have no particular opinion on the rest of the law. But this new personnel-records rule is going to lead to more employee lawsuits.

Here are five things you need to know:

1. Employers must tell workers about negative entries. An employer now has to notify an employee when it puts into a personnel record any information that has been or may be used to negatively affect the worker’s job. This must be done within ten days. The law leaves unchanged an employee’s right to review or get a copy of their records within five days of requesting it. The only sop to employers is a limit on these requests to two a year. But that limit does not apply to the notice and review of negative entries.

2. There could be serious penalties for failing to comply. The Attorney General’s Office is charged with enforcing the statute. The amendment does not change the existing penalty, which is a fine of between $500 and $2,500. It’s not yet clear to what extent the AG’s Office will seek to enforce the law. Besides these penalties, the new law could cause problems for employers during other employment litigation. If discovery reveals that the employer failed to comply, this could hurt the employer’s credibility.

3. Employers now face a dilemma about documentation. On the one hand, we’re always warning clients to document employee issues as much as possible, just in case the issues go to litigation. On the other hand, the new law makes putting relatively innocuous information into a personnel file a much more-provocative event. Now a quiet, low-level note in a file carries the risk of unnecessarily agitating the employee. Agitated employees become disgruntled employees, and disgruntled employees sue. Under the new law, employers are damned if they do and damned if they don’t.

4. Many employers are required to keep personnel records. If you employ 20 or more workers, then you’re required to keep in personnel records any written information about:

   • identity
   • job title and description
   • pay information
   • start date
   • job application
   • evaluations
   • warnings
   • probationary periods
   • waivers
   • termination notice
   • any documents on discipline

5. The law doesn’t benefit anyone (except lawyers). The amendment snuck in below the radar, without any discussion in the employment-law community. It’s antiemployer, in that it places companies at increased risk for employee lawsuits. While advocates could possibly argue that workers benefit from increased “transparency,” we disagree. There are times when a prudent employer should make a minor note in a file without escalating it to a human-resources event. Employees shouldn’t need to be stressed out by every less-than-positive note made in a file. But the new law makes that unavoidable.

So what do you do now? This is a tricky one. How to handle it depends on your current practice of handling personnel records as well as on your corporate culture. Talk with your employment counsel about devising a strategy for handling employee documentation in light of this new law.

Unfortunately, a paper trail could now take you down the wrong path.

What do you think? Is this going to be a problem for your workplace? Sound off in the comments below.

An organizational belief

As many readers know, I'm a big Red Sox fan. (That might explain my current bad mood, as the possibility of a playoff berth fades away with the end of summer.) Baseball aside, I've often written about the management style and philosophy of the current team. (See "Clubhouse rules.") Here's another example, along with an explanation of the philosophy behind it.

Red Sox first-base coach Ron Johnson has been away from the team for a month. His daughter was in a horrifying accident in Tennessee, where a car hit her while she was horseback riding. Most of the details have been kept out of the media, but the girl ended up losing her leg.

Yesterday, a reporter asked general manager Theo Epstein when he thought Johnson would return. Epstein wouldn't speculate, but his answer gave great insight into how the team treats its employees:

I’ll leave that to RJ or until he lets us make some sort of public disclosure. His priority is with his family, and that’s an organizational belief, that at times of crisis, family comes first. He’s doing a great job supporting his family through this tough time.

My emphasis. The quote's from Sox beat reporter Amalie Benjamin's notebook column in The Boston Globe.

If you're an employer or a manager, ask yourself this: Do you want to be seen as having the kind of workplace where employees' families come first in times of crisis, or do you want to be seen as the kind of workplace that counts days off, demands doctors' notes, and docks pay? I don't know this for sure, but I can pretty much guarantee that the Red Sox are keeping Johnson on salary and not tracking the days he has missed.

If you haven't already, adopt a similar organizational belief. The Red Sox might be destined for third place this season, but they're showing championship-caliber managerial skills here.

Clubhouse rules

I've written before about the lessons that other managers can learn from the Boston Red Sox (see "Division-leading employee management"). In today's Boston Globe Magazine, Charles P. Pierce profiles Terry Francona, the most successful manager in the history of the Red Sox. One of the recurring themes in the piece is how Francona strives to maintain an atmosphere of normality in the clubhouse: not to get too up after wins, not to get too down after losses.

Here's the money quote, which has a strong message for managers in any industry:

“That’s a big part of it,” Francona admits. “I want there to be an atmosphere where they want to show up every day and do the right thing. We can have rules out the [expletive], but if they want to do the right thing, we’ll be a better team. It’s about consistency. If they win the other night or if they don’t, they don’t need to come in here and see me either bouncing off the walls or dragging my tail. It doesn’t work. It’s got to be the same every day."

Too many managers in today's workforce seem to think that you need to have "rules out the [expletive]." Rules about sick days, rules about social media, rules about bereavement leave. Forget all that. As with the Red Sox, it's better to create "an atmosphere where they want to show up every day and do the right thing."

What do you think? Does your workplace need rules out the [expletive]? Or do you try to create a certain atmosphere? Sound off in the comments.

Five reasons Twitterers make better employees

Many employers are fretting that Twitter — like email and The Google and The Interweb — are a drain on employees' time and attention, and generally a bad thing for business. Some companies have already taken to banning Twitter from the workplace: most notably, the White House (even though Twitter got the President elected), the Marine Corps (even though the Chairman of the Joint Chiefs has 4,000 followers), and the Green Bay Packers (no wonder Brett Favre left).

But I take issue with that.

And I'll even go a step farther. I've met enough people in the Twitterverse to conclude that Twitterers make better employees. Let's call them tworkers, since Twitterers *heart* neologisms. And remember, I write from the perspective of a management employment lawyer.

Here then are five reasons, which are each — of course — Twitterable (in fact they're twooshes — exactly 140 characters long):

1. Tworkers are usually extroverts. They don’t shy away from attention and they like showing off. They understand their roles as performers.

2. Tworkers are interested in being part of a community, one they help build. They care about people, and they’re sharing and compassionate.

3. Tworkers are unafraid of trying new things, but not because something is a fad. They are always looking for a better way of doing things.

4. Tworkers have the ability to quickly make friends with strangers. They also know that what they say reflects upon them and their company.

5. Tworkers know how to express themselves concisely in plain English. They say what they mean. They get to the point without wasting words.

As an employer, and as an employment lawyer, these are qualities that I want to see in my workplace. Or tworkplace.

Employers: don't ban Twitter from the workplace. Instead, look for good tworkers.

Related posts

• A twitterable Twitter policy
• How Twitter will kill annual performance reviews