As an HR professional, you likely understand the importance of performance reviews. But are your current review processes actually driving better outcomes for your organization or compliance risks?
While many leaders believe their feedback sessions are effective only 14% of employees say that performance reviews motivate and inspire them to do better. That’s a staggering gap.
As you prepare for mid-year reviews, now is the perfect time to pivot your approach—not just to improve employee engagement, but to ensure you’re meeting legal obligations. From goal setting to feedback delivery, today’s performance reviews must not only be strategic, but fair, consistent, and compliant with federal and state employment laws.
Here’s how to transform your review process and stay on the right side of employment law.
1. Align Goals with Roles and Document Expectations
Disengagement often stems from one issue: employees aren’t clear on what’s expected of them. In 2023, less than half of employees reported knowing what their workplace goals were. That lack of clarity can hurt morale, productivity—and even lead to legal risk if performance-based decisions aren’t well documented.
To improve both performance and protection:
- Set SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound) that align with business objectives.
- Tie goals to defined job descriptions and performance metrics.
- Ensure expectations are clearly documented and acknowledged by the
employee—this creates a paper trail that’s useful in the event of disputes or audits. - Revisit and adjust goals during mid-year reviews to reflect changing business needs or role shifts.
Compliance Tip: Under laws like Title VII of the Civil Rights Act and the Americans with Disabilities Act (ADA), performance evaluations must be based on objective job-related criteria, not subjective judgments or assumptions about protected characteristics. Proper documentation is key to defending against discrimination claims.
2. Deliver Balanced*, Objective Feedback the Legal Way
Providing structured, documented feedback is not only essential for employee development—it’s also a key legal safeguard. The EEOC emphasizes establishing neutral and objective criteria for employment decisions to prevent discrimination based on race, color, or other protected characteristics.
Best practices include:
- Focusing feedback on specific behaviors and performance outcomes—avoid subjective labels or character judgments.
- Consistently applying the same evaluation standards across employees to eliminate bias.
- Documenting feedback sessions thoroughly, including employee responses and action plans.
- Training managers and HR professionals on EEOC principles and objective decision-making as part of your compliance strategy.
Compliance Tip: Following EEOC best practices such as using objective criteria, consistent decision-making processes, and inclusive training helps protect your organization from legal exposure during performance reviews, wrongful termination, or discrimination claims.
3. Create Personalized, Legally Sound Improvement Plans
Generic improvement plans rarely work and may even expose you to legal claims if seen as punitive or discriminatory. To build a plan that drives results and complies with employment law:
- Base the plan on objective performance gaps and previously documented expectations.
- Include clear timelines, checkpoints, and measurable outcomes.
- Offer relevant training or coaching resources tailored to the employee’s role and goals.
- Keep detailed records of every conversation, agreement, and follow-up, especially if the plan may influence promotion, compensation, or termination decisions.
Compliance Tip: Under the ADA, you are required to provide reasonable accommodations for employees with known disabilities. If an employee is underperforming due to a disability, performance standards may need to be modified or supported with accommodations.
4. Standardize the Process—But Customize the Experience
Your performance review process should be consistent across your organization, with clear guidelines for timing, content, and documentation. This protects you from claims of inconsistency or discrimination—particularly under state laws like California’s Fair Employment and Housing Act (FEHA) or New York’s Human Rights Law, which provide even broader employee protections than federal law.
But consistency doesn’t mean cookie-cutter. Personalized plans, conversations, and recognition help employees feel seen and supported. When employees feel invested in, both performance and retention improve.
Compliance Tip: Inconsistent review practices across employees in similar roles can lead to legal exposure, especially if disciplinary or termination decisions are involved. Standardization shows a commitment to fairness and nondiscrimination.
Build a Compliant, Motivating Review Process
Mid-year reviews don’t have to be a checkbox—or a legal risk. With the right strategy, they can become a meaningful opportunity for growth and connection that drive both engagement and compliance.
The key is balancing legal requirements with human-centered approaches that make employees feel valued while protecting your organization from unnecessary risk.
If you want help building performance review policies that are not only effective but also compliant with federal, state, and local labor laws, VirgilHR can help. Our automated platform helps HR teams manage performance reviews, corrective actions, and compliance requirements—all without needing a law degree.
Schedule a demo today and learn how to stay on track both legally and strategically.