Five ways to minimize risk

Organizations that hire and retain high-performing employees have a competitive advantage in the marketplace. That’s one reason why it’s important for employers to set clear performance expectations and develop a system that rewards top talent.Following human resources best practices, many organizations create a written document or handbook that details important employer policies. These guidelines typically cover how and when to request paid time off, what to do if you’re going to be out of the office, and other performance expectations. Employee handbooks also define how the organization will measure and monitor results.While it’s good practice to establish and communicate performance policy, could your written document ever hamstring your organization? 

Why language matters

Employers often use the employee handbook to define and communicate policies including new hire probationary periods and progressive discipline. These procedures provide a structured process to improve employee performance and prevent recurring issues. However, experts agree that you should avoid creating overly detailed policies that could be difficult to enforce.It’s also important to understand if your handbook is an employment contract or simply a collection of policy statements. The answer depends on whether your handbook contains a disclaimer. As this Workforce article points out, “a handbook that is a binding contract might be worse than no handbook at all.”It’s also important to make sure that written performance policies are followed consistently by both employees and the organization. For example, if a performance review is supposed to be conducted quarterly, managers should not skip them or conduct them late. Otherwise an employee who has been asked to improve his performance can claim that the company isn’t following the written guidelines either. 

Common performance management challenges

Effective performance management strategies often include goal-setting, performance review, and performance improvement stages. However, these stages are often disconnected and don’t align employee performance with overall business goals.A 2017 Mercer study found that 95% of managers are dissatisfied with their organization’s performance policies. And 90% believe their performance management system doesn’t provide accurate information. That’s why many employers are leaving conventional performance management methods for more continual feedback processes that value two-way conversations between managers and employees. 

Five ways to minimize performance policy risk

An employee handbook can provide valuable legal protection if you’re thorough. Update it frequently to ensure compliance with changing regulations and internal policies.Additionally, your handbook can set the tone for productive employee relationships. To ensure your organization meets its performance potential, keep these strategies in mind: 

  1. Communicate expectations and set goals. Focus on behaviors and milestones so employees can track task completion and feel they are making an impact on overall business performance. Without clear goals, employees become disengaged which negatively impacts performance.
  2. Pay attention to your own rules. Though it’s important to create and distribute written performance policies, employers also need to sweat the small stuff. Wording matters.
  3. Build trust. A performance management system works best if it’s based on a trusting relationship between managers and employees. Studies show that engaged workers are more present and productive.
  4. Be consistent. Mixed messages and inconsistent feedback can put employers at risk of performance management failure. To ensure your workers take recommendations and corrective action seriously, managers must maintain consistent tone.
  5. Consult your attorney. It’s important to review your written performance management policies with counsel to ensure your organization is in compliance with federal, state, and local regulations.


Protect and serve

As you update and review your performance management policies, remember to seek legal counsel to ensure you maintain compliance. Be clear with your expectations and set achievable goals to avoid the common pitfalls. With a thorough and consistent approach, your policy can both protect and serve your organization well. Asure Software’s Performance Management solution delivers easy-to-use performance review management with document attachment capabilities and employee self service.

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