Preparing for Annual Reviews

Joe Young

Good afternoon, ladies and gentlemen, and welcome to our subscribers to the GovCon HR Round-Up podcast. This is our Thanksgiving edition.

Declan Leonard

Yes.

Joe Young

So welcome back. We had a great session last month before the election. I think we’ll maybe talk on some of the impacts of that as we get into January.

Declan Leonard

I haven't watched TV for a while. Who won that thing? I have no idea.

Joe Young

Come out from underneath your rock! But good afternoon, everyone. My name is Joe Young. I am the president of GovConPay. We are the only outsourced payroll and HR solutions provider that focuses exclusively on servicing the government contracting marketplace. As always, we're coming to you live today from the wonderful studios here in Tysons Corner of BLC Digital Strategies, the media affiliate of our partner, Berenzweig Leonard LLP.

And with the support of our teams and in particular our producer, Mr. Todd Castleberry. Before we get started, I also want to always recognize our sponsor from Berkshire Associates. We appreciate all their support and welcome to any of their clients and partners who may be joining us today. If you don't know, Berkshire is an HR compliance firm with expertise dating back over 50 years with a focus on affirmative action, pay equity, and DEI services. So welcome to any Berkshire visitors who may be joining us today.

For those who are longtime viewers of the roundup, you may be noticing we're missing somebody today. Don't worry. Declan’s partner, Seth Berenzweig, is well and traveling, but you just get the two of us today. So happy again to be with my friend and partner, Declan Leonard.

Declan, why don’t you introduce a little bit about the firm and yourself before we get going?

Declan Leonard

Yeah, it is weird without Seth here. You know, we usually have the three… I don't know if it’s the Three Stooges or the Three Musketeers. You all decide. I am Declan Leonard. I am a managing partner here at Berenzweig Leonard. I also head up our firm's employment law practice, and we're a business law firm here in Tysons, serving, frankly, everywhere in the DMV as well as nationally for government contractors.

We’ve got a very active government contracts practice, so it's great to be here again, Joe.

Joe Young

Absolutely. Well, today's topic is all about performance reviews. And I'm going to troll us a little bit to start here, Declan, because the title we put out is “preparing for annual reviews.”

Declan Leonard

That's like the 1980s called and they want their title back.

Joe Young

It’s probably a bad title since everything you read is everybody's moving away from annual reviews. So we can make fun of ourselves a little bit here, but also correct ourselves and maybe I think a great way to kick off the conversation is, I mean, it seems like it is all about continuous feedback now from a review or from a performance evaluation and training perspective.

You know, what are you seeing there? What are some of the thoughts of your clients are coming to you with as far as a strategy and things you need to think about in that environment?

Declan Leonard

Yeah, as an employment lawyer, one of the things that I obviously advise clients on are when problems arise. And if I am only seeing an annual performance evaluation, you know, the 1 to 5 and you know, “Is two good? Is three acceptable?” you know, all of those things, and I'm trying to parse it out and say, “Do we have enough here to justify, you know, this termination for performance related reasons?”

That's not going to cut it in today's day and age. And, as you noted, continuous feedback – easier said than done for clients, for companies – but continuous feedback is the norm. If you're not doing that, you're probably way behind the eight ball.

Joe Young

Yes, even HR leadership at our firm tells us nobody should be hearing about performance issues for the first time in their annual performance review.

Declan Leonard

Yeah. I always ask people, it's a very basic question, but like, you know, when a client calls me up and says, “hey, we need to let this person go,” I say, “Are they going to be surprised?”

And it's a very basic question, but really it uncovers a lot because if they are going to be surprised, if they didn't see it coming, to me, it's a failure of management and it dovetails directly into what we're talking about here when we talk about annual reviews, because so often, it's easy to kick the can down the road, sweep it under the rug or whatever.

And so if your company has more of a continuous feedback process, which we're going to talk a lot about as a theme today, then I don't think you'll run into those problems that I see sometimes.

Joe Young

And I think what we're seeing a lot to and what we're seeing our clients looking to implement is starting that process and getting much better, much clearer, much more deliberate about goal setting.

Declan Leonard

Yeah.

Joe Young

You know, really specifying the old SMART goal mentality. The acronym:

• Is it specific?
• Is it measurable?
• Is it attainable?
• Is it relevant?

I am going to my cheat sheet, just in case.

• And is it time-bound?

Setting up those goals and measuring those on much shorter timeframes —maybe not weekly, but at least monthly and quarterly — I think builds into that continuous feedback, which is really important.

Declan Leonard

And not letting goal setting and goal measurement be confused with position descriptions. They're very different things. Position description should be reviewed kind of regularly, but like, you know, definitely a year, two years, three years to see whether or not they're still in line with what's happening on the ground. But what you're talking about is a lot different.

Goal setting, goal measurement, is really an offshoot of the position description. It's really how this is working in real life on a day-to-day, week-to-week, month-to-month basis. I think that that's critical also for HR to understand.

Joe Young

I think we're also seeing companies get more mature and better at aligning those specific position goals and individual goals with the company goals. And how does that trickle down? Like, for example, at our organization, the core tenant is obviously client service. So we have a company goal of achieving a certain retention amount. Our support team has weekly goals on the percentage of calls that are answered. That’s measured weekly, reported up to management monthly, to hit those targets.

So everybody is very in line. We're not getting together once a year and going, “Hey, how was our retention goal? Did we good and what do we need to do better?” It's those building blocks that trickle down through the organization.

Declan Leonard

Let's talk a little bit about technology, because in my opinion, you had the best intentions, but if you, you know, throw out things like “We're going to do continuous feedback,” if you don't have the technology to make that happen throughout the year, you are going to find yourself at the end of the year saying, “Hey, we're doing our annual review season right now.”

You’re going to find yourself in that boat. So talk a little bit about that because I know with GovConPay, you've got that aspect of it covered now.

Joe Young

Absolutely. I mean, as the folks on the call know, the technology is becoming so much more a part of the HR practitioners’ toolset in various areas and it's developing in different areas. You know, we've seen a lot of enhancement, probably foremost in recruiting and applicant tracking.

As far as technology, that's where we're seeing the easiest, the earliest application of AI in recruiting and applicant tracking. Obviously, there's been a tremendous evolution for the performance management world as well because people want to get to away from five questions and ratings on an Excel document once a year.

And as you said, if you want to have this ongoing dialog management and the ability for people to communicate, you need tools to do that. We are seeing more and more clients are like, “Hey, I need to have those tools and ideally have them as part of the overall solution we're doing.” So, technology is continuing to evolve into all these areas of HR and going to continue to grow for sure.

Declan Leonard

Yeah. I mean, it's timely. We've got a question here:

“What kind of features or tools should we be looking for when trying to select an HR software solution?”

And of course, that that selection – and we're not here, obviously, to create a commercial for any particular HR software solution. It's going to depend on so many things. The number of employees you have, how you have the structure of your back-office setup, things of that nature.

But is there anything else? Some advice and things to look for as you're trying to select one?

Joe Young

Yeah. And to your point, we wouldn’t want to do anything self-serving. But I think it's you always want to try having all that integrated with the other core HR so your core HRIS: your payroll, your benefits, your learning management systems, being able to have those tools all in one system that can flow into compensation.

This is ideally what people should be looking for because, again, in the end, they’re always looking to create simplicity, efficiency, and flow of data. But there are situations, too, where there are best-of-breed performance management products out there that you may not get in a bundled product. And for some companies that maybe are doing something really unique, or have a larger, more diverse workforce, sometimes they have to go to a best-of-breed solution to get to what they need.

So it really depends on the evaluation and the needs of the client. But there are great tools out there.

Declan Leonard

Yeah, and it has changed dramatically, the arena of review process. I've been doing this for almost 30 years, and so I'm so used to getting that PDF of all the performance evaluations. Here's the 2022 one, here's the 2023 one, you know? I'm getting one for each year. Now, clients are sending me the records that are coming in from all of the HR platforms.

And they're interesting because, the way I described it in the past, the way you used to do it is the company would do the write up, there would be some back and forth a little bit in feedback, but ultimately the company would finalize it. They'd send it to the employee for their signature, which was always maddening to me because there's no reason you need to get them to sign.

And of course, some employees didn't like it and wouldn't sign and people think, “Well, then it's not a valid evaluation.” Well, of course it is. But now, employees have the ability to go in. And I will tell you, as an employment lawyer, I think it's great. But I also think it's a little bit of a double-edged sword because employers, by doing this, there’s way more transparency. And I'm a big fan of that. So, I think it's good. But you also relinquish some control as to what shows up.

And if you've got an employee who wants to jump into the portal, jump into the platform, and write in there I think “I'm being targeted for harassment stuff.” You've now got that in writing. You've got to now deal with that.

And so there's a lot more give and take when it comes to this, a lot more interactive process that I think is good ultimately, but in the wrong hands, could be a challenge for HR.

Joe Young

Yeah, I think what we're hearing, and what I hear internally, is we want performance reviews to be a dialog and a conversation, not an annual test. It's not an audit. A conversation.

And you mentioned transparency. Even when you are creating performance reviews, and maybe you are having goals and it's leading up to one big annual one, everybody should know what they're going to be judged on aligned with their job description, like you said, well in advance.

We're going through that process now. We have certain training. Training’s a big topic of employee engagement, which ties into performance, which ties into retention. So we have specific training goals. All of our associates are required to do 40 hours of training. If you want to get a three out of five, you do 40 hours of training.

Declan Leonard

Easily measurable.

Joe Young

Easy, measurable, so everybody knows what it is in advance and that's a part of their goal setting throughout the year. So that transparency and dialog is really important.

Declan Leonard

So now we know the importance of these HR platforms and their role in the performance evaluation process. Then the question is like, “Who should be involved in this process?” We have a question up there. Do you want to go through that?

Joe Young

Yeah, Obviously we have the traditional manager or supervisor, but obviously, unique to the government contracting space is employees working off-site, under primes, with partners. Their direct day-to-day manager is not an employee. What are the unique situations that you see there?

Declan Leonard

It's a unique challenge. It is tough. We've talked about this in one of our recent round ups where you get the call from the prime or, if you are the prime, you get the call from the government customer that says, “I want this person removed.” And you're like, “Well, why?” And maybe they fall into a protected class.

It really puts the company in a bind. We're not really talking about that now. We're really just talking about like, if you are a government contractor that has your billable employees that are either onsite or maybe working remotely, supervised by the prime, supervised by folks that are at the government agency that you're working for, what are you reviewing them for?

You're not going to get a whole lot of content, I feel, from the government client as to feedback unless it's bad. They’re not going to be filling out a whole lot of forms. So, it does create a bit of a challenge.

Joe Young

And, you know, going back to technology and something else people need to think about because this has come up with many of our clients, is again, not being reactionary, but being proactive. If you're looking at software, there are some softwares out there that can enable outside third parties to also be a part of your technology platform to do that.

So if you're doing 360 reviews, maybe you do want to get feedback from that person that in a traditional commercial environment wouldn't necessarily be there, but is so critical to the performance and the ongoing contract and satisfaction of that client, being able to actually include them in that review process as well.

So that's something I would recommend for people are looking for technology platforms. See if they have that capability that it doesn't have to be an employee who's a user in your software to be able to come in and participate in that process, because that's usually valuable feedback.

Declan Leonard

I think it's a healthy process, actually, because what it does do is it forces – in the scenario we're talking about where the employee is sort of remote or working on site and you really don't have a whole lot of day to day interaction – what it does force the company to do is it forces their program, their project manager, to be a lot more proactive in soliciting feedback from, let's just say, the powers that be, the people who are in the know, whether that's the prime or whether that's the government agency.

That not only helps you evaluate your employees and their strengths and weaknesses, but any time that you're engaged in dialog with your prime or your agency as the as the customer, that's good for business because it shows you're engaged. It really does kind of force it. So, I think it's actually a good process at the end of the day for government contractors.

Joe Young

As we said, being proactive with it, not reactive when they're trying to deal with, “I want this person removed.” It's kind of too late. What about – we touch a little bit but maybe dive a little deeper in – the ongoing work of making sure, as we're going through this process and we're setting goals and evaluating people, that they're looking back: Is this aligned with the actual job descriptions that we put in place? And are we keeping those up to date as a part of the performance review process?

Declan Leonard

Oh, absolutely. I see it time and time again where somebody gets a bad review, and I'm representing a company, a government contractor, and the employee gets a bad review. And you say, “Well, no, here it is. It's all laid out here. You didn't do X, Y, and Z.” And then they go back to their position description, and they say, “Where in here is that really one of my core job duties?”

And that position description may be five, six, ten years old. So, I would say I don't think – there's already enough on HRs’ plates these days. I don't think that you have to do it yearly. But I think every two years, perhaps you can stretch to three years, take a look at those position descriptions. Go through and make sure that what they are doing actually matches. Make sure what they're doing on the ground matches what's in that piece of paper.

Joe Young

And then we always, obviously, as a part of this process, we wish everybody's getting fours and fives and everybody's high performers and we're all moving along.

Declan Leonard

Yes. Yes. I rarely get calls for that.

Joe Young

Yeah. So, I'm sure as an attorney, you never…

Declan Leonard

I tease my clients like “You never call me when there's a promotion.” You know, we get balloons going off and everything.

Joe Young

So you know the popular PIP, the performance improvement plan.

Declan Leonard

The dreaded PIP.

Joe Young

What are some best practices there? How should they be used? How should they not be used?

Declan Leonard

I get in trouble with my HR folks sometimes on this one. It’s because of experience of how I've seen them used. I think there's a place for performance improvement plans. Once again, if there coming at the tail end of a lot of performance related issues that have not been conveyed, that is not the effective use.

Again, it doesn't have to be like a formal memo. Send somebody an email and say, “Hey, you really you weren't responsive to this one client” or “Your deliverable wasn't great.” Performance improvement plans should not be checking the box prior to making a termination decision or sometimes having already made that termination decision.

This is our way to sort of cloak it in more legitimacy. That's not going to work at all, in my opinion. In my opinion, it usually backfires. Performance improvement plans should be used when there are very concrete performance deficiencies that you believe the employee can recover overtime from and be a valued employee of the company.

So, I think that that's where they're sometimes misused as like, “Oh my gosh, we didn't do a PIP on the way out the door.” It's not the right way to use PIPs.

Joe Young

In those situations, is that typically being used in that way to overcome the lack of proper documentation of the issues beforehand?

Declan Leonard

I think it is.

Joe Young

I think it goes back to ongoing documentation and things like that. And they're like, “Well, where's the documentation? Well, let's put them on a PIP.”

Declan Leonard

And then it's like the kitchen sink approach. It's like everything they did a year ago, “You did X, Y, and Z were throwing it in that PIP.” You're right. It really is. I mean, you can still have a great performance evaluation, continuous review, all that stuff, and still use PIPs. But I do think that sometimes it is used as a resort to clean up for what was not properly done in real-time in a continuous fashion over the last period of time.

Joe Young

And I’ll tell you, I think that as you look at the top seven trends in performance management these days. I think, again, going back to continuous communication, then it also goes to when you're identifying those challenges, having the tools in place for training and mentorship programs inside the company. At the end of the day, this isn't about, “Hey, we're going to give everybody a thumbs up or thumbs down.” We all want everybody to succeed.

I think a part of this ongoing performance management is also implementing the ongoing tools for companies and managers and leaders to get the results from the people that you want. So much more of the mindset of performance management is ongoing. I would say it's almost ongoing performance enhancement versus performance management, building those key tenants in for success.

Declan Leonard

No, there's got to be, in other words, when you have one of these HR platforms where you're doing 360 reviews and you're doing continuous feedback, it can't just be the feedback back and forth. There's got to be concrete action items that come into play. Otherwise, it's all, in my opinion, it's kind of all for naught.

It's kind of like if you're just going in, the employer's going in and typing up their little recitation. The employee then goes in and says, “Well, no, because I didn't know I was supposed to do that, and I did it perfectly, blah, blah, blah.” And no one's monitoring that? If that's the notes that's coming out of it, to me, it's not very effective.

It's when the tree falls in the forest. Somebody has to really be proactively monitoring what's going into these technology platforms, these HR platforms, and creating action items. You're talking about the importance of training, things of that nature. That's got to be followed through. The technology is not the end all and be all.

It is merely a conduit to spur activity and action, hopefully in the right direction.

Joe Young

Yeah. To build an ongoing, recurring year-long type plan.

Declan Leonard

We've got a couple of PIP questions.

What's the best approach for addressing isolated performance issues without resorting to a PIP?

This is a good one because you do not want to jump into.. if you do use PIPs… By the way, you're not required to. There's nothing in the law that says you have to.

And really calling something a PIP or calling it just a counseling email or anything, it's all kind of the same thing, at the end of the day. But you really do want to make sure that you don't go to that well often. If you do, you could set yourself up for discrimination claims, what they call disparate treatment claims. If you really want to run somebody out and they had one transgression and they were late for work one day and you throw them on a PIP, they're going to be able to show very quickly that other employees were engaged in similar or identical, perhaps even worse conduct and didn't get a PIP. Therefore, it’s disparate treatment if they're a member of a protected class.

So that's one of those areas where you should not go to a PIP if it's more of an isolated performance issue. PIPs are really a lot more systemic, in my opinion.

Joe Young

Yeah, well, as the name suggests, we forget it's “plan.” It's not a punishment. It's not being put on a time-out.

Declan Leonard

Yeah, yeah, that's a good point. “Performance Improvement Punishment” is what they should call it.

Joe Young

I think you highlighted it earlier. You only want to put somebody on a PIP if you do see a pathway to them being a productive part of the organization. If nobody sees a pathway there, then there's no plan.

Declan Leonard

Yeah. We’ve got one more PIP question.

Joe Young

The other one we kind of just touched on, but I ask anyways for the folks that put that in: What is something that is PIP worthy?

Declan Leonard

Sounds like a Seinfeld episode.

Joe Young

Is there extra risk if you choose to terminate without it?

Declan Leonard

I don't think you are, but like as we've been talking throughout this whole session, like yes, if you haven't done the other work, if you have not been continuous, it kind of goes back to my question. Are they surprised to hear that they're being terminated? That's where maybe you do have to do a clean-up on a PIP.

I still think that that's the wrong approach to go. You can terminate without first putting somebody on a PIP. Absolutely. How should we decide what is PIP worthy? I mean, you can't do it in a vacuum. It definitely has to be in relation to how you've acted before because you do want consistency. You know that you create a precedent every time that you put somebody on a PIP and that again, can subject the company to disparate treatment claims for discrimination.

If you're treating a member of one gender worse, they're getting a whole bunch of PIPs, or somebody of a different race, religion, national origin, age, all of those protected classes, you've got to be very cognizant of how you're using these PIPs.

And by the way, that is why HR needs to be involved in this process. We talked earlier about who should be involved in the whole review process.

It should not just be HR. It should definitely be boots on the ground in terms of managers, supervisors, people of that nature. But if you do not have an overarching centralized process that goes along with those boots on the ground, you're going to get 5 to 10 different strategies of this manager doing it this way. And that's where discrimination claims can be made out if you show disparate treatment.

Joe Young

Yeah, providing that structure and process, which we kind of keep coming back to.

Another topic we had here. How people do performance management, how you manage the performance, and the goals of your employees is obviously a huge part of just employee engagement and culture.

So you see again, looking at the trends in performance management, all you read is a lot about engagement, culture, training, because everybody's struggling to find talent, keep the right talent. How do you create a culture where employees are also willing to get to give that feedback to leadership? We talk about how this is should be a dialog.

I know our firm, we do this annually. We just did our annual employee engagement survey through a third party where we can't see it and we get our scores, but yeah how much have you seen that in recommenders as a part of performance and engagement as a whole?

Declan Leonard

It's part of my job, unfortunately, as an employment lawyer, because I'm getting mostly the problems, that you develop a certain level of cynicism over a couple of decades. So, when I hear buzzwords like culture and open-door policies and feedback and all that stuff, sometimes I'm a little skeptical because all this stuff is great, but if it's not consistently implemented and adopted, it’s actually going to be worse because it infuriates people because it makes it seem like you’re almost like gaslighting people. You’re like, “We have an open-door policy” and then you realize, yeah, you really don't, you know? And then they try to tout that and tout that.

So implementation is absolutely once again the key. If you've invested heavily in this HR platform, but you don't train people on how to use it and you don't use it as only a mechanism to help the process and not, again, the end of the process. You're going to have problems.

You're going to have employees who are not content.

Joe Young

Yeah, it’s interesting. Even in our employee survey, my most favorite question – and it's a super important one to your point of skepticism – is there's always a question: “Do you expect anything will change based on the outcomes of this survey?”

Declan Leonard

Oh, that's interesting.

Joe Young

I think it takes it takes the temperature of the organization. Like, “Yeah, I trust leadership that they really look at this. Yeah, they're not just checking the box so maybe we can put on social media that we had a certain employee engagement score and won an award.”

But to your point, if you get a horrible score on that, you have to reevaluate.

Declan Leonard

You’ve got some work to do.

Joe Young

That's when you get in, when people are like, “You say all this stuff but nobody's delivering on it.”

Declan Leonard

I do think that’s right. If you don't follow through, it can really turn against you big time. Yep. So let's see, I think we have hit pretty much everything. We got 2 minutes left, so maybe we wrap up. What are we doing for December?

Joe Young

For December, we are doing maintaining compliance in the new year.

Declan Leonard

Oh, I was hoping it would be how to behave at holiday parties. That's always my favorite. Those are my favorite stories that I see online.

Joe Young

We can probably work ten minutes of that in. Probably should have done that now because the holiday parties start in early December.

Declan Leonard

We have ours tomorrow night, but we're all angels.

Joe Young

And like today's topic, obviously compliance is not just at year end, but we will obviously get into some of those year-end topics.

So thank you, everyone, for joining us for this month's edition. We hope you found this information helpful. We look forward to Seth being with us again back in December.

Declan Leonard

We should put Seth on a PIP for not showing up here.

Joe Young

Yes, well, he's always on a PIP. The continuous PIP.

Declan Leonard

Very thin ice.

Joe Young

Yes. So December 19th, we are getting into maintaining compliance in the new year. And then a little tease. You know, we did our pre-election last one.

But obviously, we know the lay of the land a little bit more now. So probably look forward to January diving a little deeper into maybe what things we can expect from an HR compliance regulation perspective with a new administration going into 2025.

Declan Leonard

Might have to devote more than 30 minutes to that one.

Joe Young

It may have to be a special January hour addition.

Declan Leonard

60 minutes.

Joe Young

Thank you, everyone. Hope everyone has a wonderful, safe Thanksgiving holiday. We look forward to seeing you in December. Have a great day.