HR Insights Spring 2023

HR INSIGHTS

SARC’s Human Resources and Labour Relations Newsletter

#19 PERFORMANCE EVALUATIONS

In this issue, consultants from SARC and MLT Aikins discuss various considerations employers need to makewhenconductingaperformanceevaluation.

Contents

Performance Evaluation and Goal Setting

Chiaka Nweze

Performance Appraisals:

Collective Agreement Impacts and Challenges

Scott Mostoway

The Important Role of Performance Reviews in the Progressive Discipline Process

Amy Gibson

by Chiaka Nweze

Goal setting helps an organization stay on track and focus on its priorities. SARC Human Resources Coordinator, Chiaka Nweze, explores two different types of goal setting frameworks that can be used for performance evaluations to help everyone stay on track.

by Scott Mostoway

Performance appraisals are an important management tool. Senior Labour Relations Consultant, Scott Mostoway, talks about conducting performance appraisals and delivering performance feedback within the context of a unionized workplace.

by Amy Gibson

Performance reviews provide a well-documented record of employee behavioural issues and ensure employees are notified about unsatisfactory performance. In this article, Amy Gibson, Lawyer MLT Aikins, explains the role of Performance Reviews in the Progressive Discipline Process.

Amy Gibson Lawyer, MLT Aikins

Scott Mostoway SARC Senior Labour Relations Consultant

Chiaka Nweze SARC Human Resources Coordinator

PERFORMANCE EVALUATION AND GOAL SETTING

Chiaka Nweze SARC Human Resources Coordinator

Performance Evaluation is a process of assessing an employee or organization’s performance, along side its pre-set goals and objectives. The essence of this evaluation varies and can go from identifying areas of strength or weakness, to measuring success or level of effort, training needs, as well as a reward system.

Goal setting at an organizational level is something that cannot be over emphasised because it ensures the organization articulates and stays focused on its priorities. It also ensures that all stakeholders are putting their energy in the same direction. However, just developing goals without a managed process of breaking them down, deploying it piece by piece to all employees, and monitoring may be an exercise in futility. In this article we will explore two goal setting frameworks that can be used for performance evaluation, OKRs and goal planning.

Objectives and Key Results

Objectives and Key Results (OKR) is a goal-setting framework used in positioning and tracking ambitious goals. Its development is attributed to Andrew Grove who introduced the approach to Intel in the 1970s. John Doerr published an OKR book in 2017 which is called Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. OKRs comprise an objective (a significant, concrete, clearly defined goal) and set of three to five key results (measurable success criteria used to track the achievement of the goal). Studies over time show that team members are

more engaged and productive in their work when they have a clear picture of what they are trying to achieve and its significance to the overall existence of the organization. OKRs create a shift in mindset from focusing on the amount of time spent in the workplace or on a task to focusing on the impact each action adds to the bottom line. The concept of OKR stipulates that organizations meeting their end goal and thriving is hinged on two concepts –Objectives and Key Results.

Objectives arequalitative, short, and aspirational expressions of what is expected to be achieved. Objectives are expected to motivate the entire team to achieve by keeping their eyes on what needs to be achieved and how it fits into the big picture.

Key Results are criteria for measuring the progress of the objectives. For each set of objectives, there should be three to five identified key results that can be used to measure its success, failure, or progress. This is because OKRs are typically ambitious; more so, a 70 percent achievement is often regarded as good enough.

OKR Planning

It is the responsibility of upper management to ensure that the organization has clear OKRs. These organization-wide OKRs then get broken down to different units/teams and individuals that make up the team. While OKRs originate from upper management, they should never be a ‘management only’ decision. To foster

participation, it should be an inclusive project. OKRs are designed to be ambitious and foster out of-the-box thinking and is typically not tied to financial rewards. This is what a typical OKR looks like in everyday terms:

We will _________ as measured by ____________ .

Objec ves Thesekeyresults

Goal Planning

Goal planning is another goal-setting framework that highlights the process of setting specific objectives or expectations that an employee or organization anticipates meeting within a certain period. It involves identifying the actions, steps, and resources required. Goal planning typically involves the following steps:

1. Defining the goal: This involves identifying a desired outcome. These goals need to be SMART as goals that are not SMART are difficult to relate with or track. SMART stands for Specific (welldefined and articulated without ambiguity), Measurable (have specific metrics or parameters that can be used to track and determine progress within specific periods), Attainable (not impossible to achieve), Relevant (relevant to scope of work or responsibility of the employee/team), and Timely (clearly defined timeline of achievement). Goals can be developed from the employee’s Job Description.

Summary:

2. Identify steps: Goals should be broken down into smaller pieces and the resources needed to achieve the goal are identified.

3. Timelines: Realistic timelines should be set for completing each part/overall goal.

4. Progress evaluation: Most organizations do goal planning at the start of the year, where the supervisor sits with individual employees and comes up with a goal. This goal is then tracked periodically (weekly, monthly, quarterly, etc). The reason for tracking is to ensure that appropriate and timely feedback is provided. An employee should not have to wait for the full performance evaluation cycle to hear that they have not lived up to expectations. For new employees, managers are encouraged to sit with them as part of the onboarding process and have their goals planned out, for the purpose of clarify.

SMART goal planning helps the employeremployee relationship and reduces labour related issues such as accusation of unfair dismissal, and other issues based on performance.

Regardless of which framework is used (OKR or goal planning), it is important to mention the need for the organization to have a clear performance evaluation policy that articulates expectations. When it is followed it will reduce risk of legal liability, provide valuable feedback, and increase employee and organizational outputs.

PERFORMANCE APPRAISALS: COLLECTIVE AGREEMENT IMPACTS AND CHALLENGES

Scott Mostoway SARC Senior Labour Relations Consultant

Performance Appraisals – a somewhat daunting and intimidating task that many managers feel they have to “just get through” at least once a year. It’s a time in which managers can properly assess the skills and abilities of their employees while also providing feedback on areas of improvement. Sounds simple, right? Well, in theory it is, but in practice it’s not that simple. Like many others do, managers are not immune to the feeling of awkwardness when being asked to assess the performance of their subordinates. Managers strive to form positive working relationships with their employees and having to administer a performance appraisal (especially one in which performance deficiencies are present) put those relationships at risk. As difficult as this scenario may be, it’s still a necessary function of management. The question then becomes, what obligations does management have with performance appraisals in regard to their collective agreements in a unionized environment?

Collective Agreement Language Impacting Performance Appraisals

In the traditional sense of employer-employee relationships, management has the fundamental right to judge the competency of its employees. Like many other residual/fundamental rights of management, the only time those rights get constrained is when there is language in the collective agreement that is specifically limiting. Each collective agreement has to be carefully reviewed to determine management’s obligations when conducting performance appraisals. Below are some examples of language that is most seen in the disability service sector:

• Mandatory performance appraisals for employees either at the end or midpoint of their probationary period.

• Language permitting the appraised employee to provide a written response to the performance review.

• An employee signature shall not constitute an agreement

with the review.

• Performance appraisals are not disciplinary in nature. When reviewing collective agreement language in regard to performance appraisals, it is imperative that management avoid language that limits their ability to manage. It is strongly encouraged that performance discussions happen on an ongoing basis and are addressed with progressive discipline as opposed to waiting for performance appraisal time once a year.

That said, is a performance appraisal a disciplinary document subject to challenge under the collective agreement?

Can the Union Challenge Performance Appraisals Under the Collective Agreement?

There has been a significant amount of jurisprudence trying to answer this question. I think the most concrete answer to this point is that “it is to be determined on a case-by-case basis”. Arbitrators have generally agreed that not every piece of communication about an employee’s performance is to be construed as disciplinary. However, when addressing whether written communication constitutes discipline, arbitrators generally consider whether the written communication forms part of the employee’s employment “record”. If that answer is no, then it has been established that challenges to these appraisals are not subject to the grievance procedure under the collective agreement. One of the exceptions to this rule is in circumstances where there are express provisions in the collective agreement allowing such review. Examples of this would include language in the collective agreement spelling out that appraisals can and will form the basis for future discipline, promotion, or wage rate considerations.

When everything is said and done, performance appraisals are an effective tool for managers and their subordinates to have frank discussions in the workplace regarding performance.

It is an opportunity for employers to express constructive criticism when needed as well as appropriate praise when things are going well. As effective as performance appraisals can be, they should not be used as a substitute for progressive discipline when issues arise and instead be used as a non-disciplinary motivational opportunity for discussion.

THE IMPORTANT ROLE OF PERFORMANCE REVIEWS IN THE PROGRESSIVE DISCIPLINE PROCESS

Amy Gibson Partner, MLT Aikins LLP

Performance reviews and progressive discipline can play a critical role in establishing grounds for discipline and just cause termination of employment. They provide a well-documented record of employee behavioural issues and ensure employees are notified about unsatisfactory performance. They also provide important documentation of the opportunities the employee was provided to correct undesirable behaviour prior to termination.

Progressive Discipline

Progressive discipline is a tool that is frequently under-utilized or misapplied by employers. Employers will run into problems where they plan to terminate an employee for just cause, but realize that they have not properly engaged in the progressive discipline process. Failing to engage in progressive discipline can also give the employee the false impression that the employer has condoned a particular type of behaviour. Accordingly, progressive discipline is an integral tool that employers should utilize prior to more permanent measures being taken.

In brief, progressive discipline requires that an employer implement increasingly severe disciplinary steps designed to modify an employee’s behaviour before the employer terminates a worker’s employment. The underlying principle is one of preventative and corrective action – the intention is that the employee will learn through experience and will face the threat of increasingly serious discipline if their behaviour is not corrected.

Progressive discipline can be beneficial for employers in two regards. Generally speaking, progressive discipline allows an employer to:

1. Intervene and communicate to an employee that their behaviour or actions are unacceptable and to correct issues early; and

2.Create documentation to demonstrate that an employee was treated fairly and was appropriately warned of the consequences of their actions. Where progressive discipline eventually leads to a termination for just cause, documentation confirming that an employee was made aware of the issues and was clearly warned of the consequences of continued problematic behaviour may provide the employer with a defensible argument for termination for cause.

Progressive discipline is more commonly used where a single incident of misconduct is not so egregious so as to justify termination for just cause.

Managing employees who continuously violate a workplace policy or fail to perform their job duties can be frustrating for employers. When progressing down the path of progressive discipline, employers should be mindful that if an employee repeatedly engages in the same type of misconduct it may be appropriate for the employer to move through the progressive discipline process more quickly than if the employee were to engage in unrelated types of misconduct. Ultimately, each case of progressive discipline should be assessed individually based on the specific circumstances of the case.

The Law of Progressive Discipline

Courts are typically more likely to uphold a just cause termination where an employer has established clear behavioural expectations for employees and where the employer has provided clear and unequivocal warnings to the employee of contraventions, and of the consequences for repeated misconduct, namely, the termination of employment.

Written documentation of the progressive discipline steps is particularly important in this regard. This documentation should also be referenced in the employee’s performance review.

An example of a case where an employee’s termination for just cause for incompetence was upheld is the Saskatchewan case of Schutte v Radio CJVR Ltd., 2009 SKCA 92 (“Radio CJVR”). In that case, the Saskatchewan Court of Appeal overturned what it held to be an overly stringent test imposed by the trial judge, ultimately holding that the applicable standard for just cause termination for incompetence is not one of an employee being “incapable” of performing their job duties, but a question of whether the individual

was “consistently failing to meet a reasonable standard of performance” (Radio CJVR at para 17).

A key takeaway from the Radio CJVR case is that the Court of Appeal noted that, while the standard of deficiency necessary to constitute grounds for summary dismissal is stringent where there is no significant misconduct such as dishonesty or gross insubordination, the standard of incompetence to constitute grounds for summary dismissal for incompetence is less stringent where the employee has been provided repeated notice that their performance is deficient, considerable assistance has been given to help them improve, and clear warning was provided that failure to improve will result in termination of employment.

The Court of Appeal ultimately held that the employer’s expectations regarding job performance were reasonable, the employee failed to meet the reasonable standard of performance, the employer provided clear and unequivocal warnings, and the warnings clearly indicated that the employee would be dismissed if the standard was not met. Given these factors, the test for just cause dismissal was met and the employer was entitled to terminate the employee for just cause.

This case law example arose in a non-unionized setting. The principles of progressive discipline for non-unionized employees are similar in unionized environments, subject to the terms of the collective bargaining agreement between the employer and the union.

Employee Performance Reviews

Performance reviews are an important tool for setting and clarifying employment expectations, for encouraging exemplary workplace practices, and for deterring workplace conduct that is undesirable. A negative performance review, or a series of poor reviews, may be tendered as evidence that an employee was underperforming.

On the other hand, employers can run into problems where they have provided positive performance reviews only to attempt to terminate the worker’s employment for just cause when the worker’s conduct faulters. In these instances, the employee may rely on the positive performance reviews to argue that they were performing well and should not have been terminated for just cause.

The following are some recommended best practices for employers to ensure that performance review documentation aligns with what is actually occurring in the workplace:

• Performance reviews should be conducted regularly.

• A detailed written record should be created for each performance review that clearly and accurately outlines all matters discussed with the employee.

• Performance reviews should include a thorough canvassing of the employee’s performance to date, with specific attention given to areas where an employee is failing to achieve

performance benchmarks.

• In circumstances where deficiencies have been identified, goals should be established and documented that will allow the employee the opportunity to achieve performance benchmarks.

A negative performance review will not, in and of itself, serve as sufficient notice of unsatisfactory performance such that termination for cause can be justified (see Coles v Dentech Products Ltd., [1994] BCJ No. 1680). There must also be a “clear warning that [the employee] had to take steps to avoid dismissal for unsatisfactory performance” (Coles v Dentech at page 8). Progressive discipline fulfills this purpose and performance reviews provide important documentation in support of these actions and decisions.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.