Texas employment law does not require that employers complete performance reviews for their employees. Texas follows the doctrine of at-will employment.
This means that employers may terminate an employee’s employment with or without justification at any time. The only limitation is that an employer cannot fire an employee for a reason that is illegal. And an employee can resign from their employment at any time as well. Generally, an employee gives notice some time before leaving a job of their intent to leave in order to depart on good terms.
This state of the law in Texas allows businesses broad discretion in managing their workforce. Employers are also not legally required to offer a performance improvement plan before firing an employee. Apparently, performance improvement plans are popular with Texas employers, but they are not required by Texas law. A lawyer consultation with a Texas lawyer would be able to explain Texas employment law in more detail.
There are some additional limitations on at-will employment. An employer may adopt policies and practices that give rise to implied contractual obligations. There are also public policy considerations that limit at-will termination of employment in some circumstances.
If an employer’s policies or past practices suggest terminations will only occur after warnings with opportunities to improve. For example, an employer may conduct performance reviews and offer employees performance improvement plans. If this is the case, then terminating employment without going through these steps may constitute wrongful termination.
Of course, if a person has an express contract that contains terms regarding termination of employment, then both the employer and the employee must respect the terms of the employment contract. The employment may only be terminated in the manner the contract provides.
What Is a Forced Ranking System?
Forced or stack ranking is a system used by companies for evaluating the job performance of their employees. In this system, each employee’s performance is measured against that of all other employees rather than against performance standards for particular positions. A company’s evaluator must place a predetermined percentage of employees into performance categories, such as top, middle, and bottom performers.
As originally conceived, an employer would reward the top 20% of its employees, usually with bonuses, and fire the bottom 10%. In forced ranking, an evaluator must place employees into predetermined categories, such as a top 20%, a middle 70%, and a bottom 10%. Managers have no choice but to assign each employee to a group, even if their workforce is performing well overall.
Critics point out that a forced ranking system is rigid. It also guarantees that a certain percentage of employees end up rated as underperformers. The system known as ”stack ranking” is a variation in which employees are ranked from best to worst in a linear fashion.
How Might a Forced Ranking System Affect Me?
An employee is likely to experience positive or negative consequences from a forced or stack ranking system, depending on where they end up, whether in a top category or a bottom one. An employee who ends up in the top 10% might feel very good about the system and its beneficial effects. Those in the middle or the bottom rankings may feel quite differently.
It would be especially unhelpful to end up in a bottom category without having a clear understanding as to what one must do to improve their ranking, assuming they are not fired first.
Many employers have abandoned the system because of its disadvantageous effects, such as the following:
- A forced or stack ranking system can have a significantly negative effect on the enthusiasm and motivation of employees. Hard working people who are told they are in the bottom 10% in their department or division may understandably feel discouraged and lose their motivation to work hard.
- These systems can contribute to a culture of intense competition, which would undermine collaboration and cooperation among colleagues.
- In order to avoid evaluations that are subjective, an employer must communicate clear standards and clear definitions of “high performance” for the company ranking system. Otherwise, evaluators may end up relying on subjective assessments that are open to bias.
- A forced ranking evaluation system may not take into account the factors affecting employee performance that are the responsibility of the employer. It may not reveal that the employer does not offer its employees the training they need to do their jobs well. The evaluation system itself may not motivate employees to do their best for various reasons.
Are There Any Protections Against Performance Evaluation Discrimination?
The federal Equal Employment Opportunity Commission (EEOC) has noted that forced and stacked ranking systems of evaluating employees have the same risk as any other system that might be used in a discriminatory manner. So managers who complete performance reviews using these systems must guard against doing so in a discriminatory manner. The EEOC has recommended doing the following to avoid discrimination.
- An employer should communicate its performance standards to employees when they are hired. This means that an employer needs to communicate its performance expectations for their employees to them clearly and directly.
- An employer should apply its performance standards consistently when it does performance evaluations.
- An employee should explain to employees whether they have met performance standards.
- An evaluation should refer to relevant facts and objective information. To illustrate an example: “Employee X exceeded the minimum production standard (defined) by 30% for 20 of the last 26 weeks.”
- Including facts in evaluations would probably help employees understand the basis for evaluation decisions and may help them understand how they can improve if they need to do that. It may also help ensure that the evaluators apply performance standards consistently and objectively.
- The evaluator should work to ensure that employees are not held to higher standards or reviewed negatively because of race, color, religion, gender, pregnancy status, sexual orientation, or transgender status, national origin, disability, age, or genetic information.
- For instance, an employee who missed several weeks of work for medical reasons should not be given a negative evaluation if they did not meet the production quota during their absence.
- An employer must inform employees if performance standards and/or evaluation policies change. New standards and methods have to be explained to employees.
- Management should respond appropriately and promptly to claims of discrimination.
In addition, Texas’s Labor Code prohibits discrimination in employment based on race, age, gender, disability, sexual orientation, or other protected characteristics.
Texas law also protects employees from negative consequences in their employment, i.e., retaliation, if they engage in such legally protected activities as reporting legal violations. Compliance with the federal Americans with Disabilities Act (ADA) should also be a concern of employers.
Employees can reflect on their own experience of being evaluated and ask whether the manner in which their company is conducting employee evaluations reflects understanding of the risks and works to guard against discrimination.
Of course, the end result may reflect that discrimination might have taken place. For example, if all of the employees who end up in the bottom percentage group share a certain characteristic or characteristics of protected classes, then this might suggest that illegal discrimination has happened.
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What Should I Do if I Have Been Subject to Performance Evaluation Discrimination?
One thing an individual who believes they have experienced discrimination in their performance evaluation is to have a lawyer consultation. They want to meet with a lawyer who is knowledgeable about unfair performance review law. The individual can present the facts and the data about how they and their co-workers have been evaluated by their employer and what the results were. The lawyer can analyze the information to form an opinion about how the evaluation system is working.
It might be necessary to employ the services of an expert to analyze the data to identify evidence of discrimination. The lawyer and the expert would in all likelihood need to access the exact methods that the employer uses in conducting their forced or stacked ranking performance reviews. They may need to have the results for a whole division, department, or even for the company’s entire staff.
Of course, performance evaluation discrimination might not be a product only of forced or stacked ranking systems. Any performance evaluation system can be misused to discriminate against disfavored employees or used subjectively to make judgements about performance that are not valid and do not justify negative employment consequences, e.g., firing.
How Do I Prove Discrimination at Work in Texas?
An individual who believes they have been subjected to discrimination or unfair treatment in their performance evaluation at work needs to gather documents to which they have access. They should include all records of communication they had with their employer about their performance and performance review.
It would be very helpful to have a written copy of their employer’s policies and procedures that provide information about the employee performance evaluation system. Any written material from the employer about employee rights in a performance review would be useful to understanding the employer’s review process.
They should also include records of other documentation that could be relevant to their case, e.g., some work product they created that may have garnered praise from a superior. Generally, an individual needs to document their work performance in any event so they can pitch their performance as needed.
However, in order to prove discrimination at work, an individual needs to consult a Texas employment lawyer for advice and guidance about what evidence would be required to prove discrimination in their employment for legal purposes.
Should I Hire a Lawyer?
If you believe that you have been the victim of discrimination at your place of employment, you want to consult a discrimination lawyer in Texas. LegalMatch.com can connect you to a lawyer who can review the facts of your situation and guide you through the legal system to the remedy you deserve.
