3The Importance of the Written Record

EVERY EFFECTIVE LEADER in corporate America must be a master of the written record. While documenting someone’s achievements and accomplishments is an important part of visionary leadership, the importance of documentation is typically found on the defensive side of the leadership equation; simply put, you have to know how to document problematic performance and conduct to protect your company and yourself from unwanted liability. So the discussion in this chapter focuses on how to document critical issues that hinder performance or give rise to lawsuits. Presumably, you already know how to motivate, recognize, and reward your employees by documenting their achievements, so there’s not much need to discuss offensive HR practices in the documentation arena. This chapter’s importance in terms of insulating your organization from legal challenges can’t be overemphasized, so pick up your highlighter and follow along closely!

“Document, Document, Document:” Heightening Awareness of the Record You’re Creating

If you’ve ever heard your organization’s leaders, HR director, or attorneys pontificating on the importance of documenting employee performance—both good and bad—you’re not alone. This one piece of management advice is typically shouted from the rooftops, but it’s actually only half the equation. The documentation itself isn’t really the key to changing behaviors, improving performance, or creating a written record of the challenges that a particular employee may be facing; instead, it’s discussing your documentation with the employee in a timely fashion that’s the most critical part of this exercise. After all, documents in and of themselves mean very little unless they are acted upon and communicated while they are still fresh and relevant.

For example, too many managers have found themselves frustrated with a subpar work product, such as a document, from a team member. The manager corrects the document and returns it to the employee for finalization. The employee returns it, however, with uncorrected edits and new errors! The manager then rolls the document into a ball in frustration, hurls it into the wastebasket, and works late that night fixing the employee’s errors for the next day’s deadline.

Big mistake! The supervisor just threw out an important piece of evidence that exemplifies the nature of the problem: careless work and lack of attention to detail. Rather than throwing that particular work product into the wastebasket, it should be retained and discussed with the employee, for a number of reasons. First, it can be used as a teaching tool so that the employee understands how his carelessness led to additional work and late night hours for the supervisor. Second, if the employee needs to be written up (i.e., issued corrective action documenting the problem), this piece of evidence should be attached to the written warning demonstrating the nature of the ongoing problem. Third, the employee will take the matter much more seriously if a poor work product requiring multiple rounds of rework is brought to his immediate attention when it happens.

Next, understand how your documentation will be viewed in the eyes of the law or in front of a jury. Plaintiffs’ attorneys will typically argue that their client (your ex-employee) was denied workplace due process and subsequently terminated without cause if you terminate without prior corrective action on file. (An exception would be for egregious misconduct issues like theft or embezzlement, for example, which typically warrant termination for a first offense.) The wrongful termination claim, once established, can then support punitive damage claims such as discrimination, harassment, and retaliation, which is where plaintiffs’ attorneys make their most money. Therefore, you’ll want to cut off the avenue for a wrongful termination claim in the first place, and to do so you need to understand how the record will look to a dispassionate, objective third-party observer.

What’s wrong with the following picture?

1. April 2016	First written warning: substandard job performance/productivity
2. June 2016	Second written warning: substandard job performance/poor customer service
3. August 2016	Final written warning: substandard job performance/productivity
4. September 2016	Annual performance review score: “meets expectations”
5. November 2016	Request to terminate for violating terms of final written warning: substandard job performance/productivity

Does the major roadblock in this written record jump out at you on paper? Steps 1 through 3 are very clear and logical: the progressive discipline steps for first and second written warnings in addition to the final written warning outlining ongoing performance problems that the employee continues to experience. All clear up to that point.

But then in step 4 in September, the supervisor throws a monkey wrench into the record by codifying that the individual “met expectations” for the entire year. Ouch! That supervisor just validated the entire year’s performance despite the final written warning issued just one month before. As a result, the organization is clearly not in a position to terminate for cause: the record is now confusing and inconsistent, and the employee’s attorney will likely argue that the company sent mixed messages about the individual’s job being in jeopardy. If you throw a log in the way of your path, you’ll get tripped up or significantly slowed down, either in your ability to terminate now or the negative consequences stemming from your decision later during trial.

Think of it this way: annual performance reviews are like massive battleships. They displace tons of water and cover an entire year’s performance. Written warnings, in comparison, are like tiny PT boats that serve to break the chain of positive reviews on file. In fact, a written warning could result from just one bad day in the office. So expect plaintiffs’ attorneys to place a lot more weight on annual performance reviews than on written warnings. That being said, the written warnings did their job in steps 1 to 3 to demonstrate that the individual’s work was substandard and the consequences were becoming more serious; it’s just that the inflated performance review score damaged the record the employer was trying to create in informing the individual, with notice, that his work wasn’t acceptable (i.e., workplace due process).

The end result? In this case, the employer opted not to terminate the employee at step 5 in November. Instead, the employer issued yet another formal notice informing the employee that the performance review score of “meets expectations” was issued in error and that the final written warning issued at step 3 in August was still active and valid. In addition, the employer added “last chance” language to ensure that the employee understood that his position was now in immediate jeopardy of being lost:

Further, please understand that this is your last chance. Your position is now in serious jeopardy, and failure to demonstrate immediate and sustained improvement will result in immediate dismissal.

The moral of the story: Performance reviews make for very different records than written warnings. Don’t put battleships in your way when creating a written record of according workplace due process. Make sure that your corrective action and annual performance review’s “overall score” are in sync (i.e., demonstrating that the individual is not meeting expectations for the entire review year because of the number and types of correction action notices on record during the review period). And don’t fall prey to the mistaken assumption that saying employees “meet expectations” when they’re really failing will somehow motivate them. It will only make your job that much harder if and when the time comes to recommend termination for violating the terms of a final written warning. It’s true that confrontation is difficult and it’s easier to just assign a passing score, but proceed at your own risk if you opt for that course of action; you’ll severely limit your ability to terminate if the record doesn’t show a consistent theme and story.

Performance Reviews: The 800-Pound Gorilla in the Room

With a better understanding of the consistency you need in your written records of employee communications before recommending a termination and the importance of being able to demonstrate “good cause” through the use of carefully crafted corrective action documentation, it’s important to focus on the employee’s annual performance review—that massive battleship we referred to above. It captures an entire year’s worth of effort, production, productivity, and overall contribution to your department and your company. However, proceed cautiously: most managers misunderstand the key strategies behind using performance reviews as motivational tools for employee self-development, and, worse, they sometimes step on land mines by carelessly completing reviews without giving much thought to the record being created.

Understand that the annual review is meant to be a culmination of prior activities and communications that have occurred throughout the review year. The performance management cycle has three stages:

1. Goal setting and planning

2. Ongoing coaching and feedback

3. Appraisal and reward (i.e., the annual performance review)

Exceptional leaders get to know their staff members’ goals and needs throughout stage 2: Is the individual looking for an upward trajectory within the organization, looking to assume broader responsibilities and higher levels of accountability, a more stable work–life balance, or the acquisition of new skills or educational credentials? As a manager, are you meeting with your staff members formally on a quarterly basis to spend one-on-one time with them and getting to know how they learn best, whether they prefer public or private praise and recognition, or whether they want more formal or more relaxed communication from you? Furthermore, what amendments need to be made to their goals established in stage 1, and what ideas and recommendations can each member of your team share to reinvent the workload in light of the organization’s changing needs?

Simply put, if you don’t know how to answer questions to this level and degree, you’re shooting in the dark in terms of assessing your staff members’ performance and future goals. The result? You’re left filling in the blanks on a performance review form at stage 3 of the cycle using stereotypes, generalizations, and misguided notions in terms of each individual’s true strengths, areas for development, and inclinations to recommend innovative and creative solutions to better the organization. You probably know managers who muddle through the annual performance review as a rote exercise and paper chase because they have very little information or personal insights to draw from. When the review process becomes a mandatory exercise and headache that simply justifies giving someone a merit increase, you’ll know you’re upside down in this process—a process that is meant to be a rewarding and satisfying experience for the employee.

Instead, encourage your employees to draft their own self-evaluations, including their goals, at stage 1. As I pointed out in my book 2600 Phrases for Effective Performance Reviews (AMACOM, 2005), ask them to answer the following three groups of questions with as much or as little detail as they prefer to contribute:

1. Address you overall performance track record for this review period. Specifically highlight your achievements that have resulted in increased revenues, decreased expenses, or saved time. Why is XYZ Corporation a better place for your having worked here this past year? How have you had to reinvent your job in light of our department’s changing needs? How would you grade yourself in terms of work quality, reliability, production, teamwork, and technical skills?

2. In what areas do you need additional support, structure, and direction? Specifically, where can I, as your supervisor, provide you with additional support in terms of acquiring new skills, strengthening your overall performance, or preparing you for your next move in career progression?

3. What are your performance goals for the next year? What are the measurable outcomes so that we’ll know that you’ll have reached those goals?

With these three groups of questions, you’ll have invited your team members to involve themselves in their own career development, make you their coach, and motivate themselves to build “achievement bullets” on their résumés, as well as contemplate next year’s self-evaluation exercise.

Not all employees will participate, of course, and some may only provide cursory information. That’s okay: the real target audience for this exercise is your top performers—the top 5 to 20 percent of your team who look for ways to build their careers and acquire new skills in tandem with you, their supervisor. Don’t be surprised when those superachievers present you with spreadsheets that contain all the bells and whistles: career goals, specific skill acquisition, achievement milestones, and the like. Remember, as a leader you’re not responsible for motivating your team members; motivation is internal, and you can’t motivate them any more than they can motivate you. However, as a leader in your organization, you are responsible for creating an environment in which people can motivate themselves. This self-evaluation exercise achieves that very goal; it gives all your employees, but especially your top performers, a chance to involve themselves in their own career development and point out areas where you can help them.

Next, be sure and review the employee’s prior year’s performance review before attempting to draft this year’s appraisal. Remember that when creating a written record, the consistency and the common themes within the documentation are exceptionally important. There shouldn’t be weaknesses from two years ago that became strengths last year but are now weaknesses again. If that were to be the case, the conflicting record could cause confusion in the employee’s eye, and the inconsistency could be used against your company if the individual were to later claim wrongful termination. Generally speaking, there should be a clear progression or decline in these documents, and they should be able to stand on their own and tell their own story without your having to explain anything. It stands to reason, though, that if the cause of the inconsistency in the individual’s record is due to the employee’s erratic and unsustainable performance, then be sure to document the issue appropriately. Specifically, document the ups and downs and erratic performance inconsistencies that have created a “roller coaster” effect and that are forcing you, the supervisor, to re-address issues that should have been cleared up months, quarters, or even years ago.

As far as assigning scores, don’t give everyone a score of 3 (“meets expectations”) across the board. There’s not enough discernment there, and you should generally have a healthy distribution of superstars (5’s), those who excel on a regular and consistent basis (4’s), and those either partially failing (2’s) or totally failing (1’s) in their roles. That being said, it’s okay to give a 5 (“exceptional”). Don’t be like those college professors who never give A’s. That, in effect, simply reduces your five-point scale down to a four-point scale, and that obviates that need for the flexibility and discretion that the five-point scale allows and encourages.

Next, be wary of following the idea of “forced ranking” too closely. Forced ranking basically posits that there should only be so many 5’s, 4’s, 3’s, and the like in any particular group. The system was made famous by Jack Welch at General Electric when he created the fabled “rank and yank” system, in which 20 percent of the organization should be superstars, 70 percent should be performing at a high level but striving to get into that 20 percent box, and 10 percent need to be fired every year. No matter how well that bottom tenth percentile performed, it was all relative: 10 percent of the organization needed to be let go every round when performance reviews were completed.

Does a system like that make you uncomfortable? Does it make you feel that everyone was in it for themselves and had to get into that first-tier 20 percent box at all costs? Possibly so, and you’re not alone. While no one can argue with GE’s success under Jack Welch, as it became a virtual factory of CEO talent that ultimately manned the largest corporations in the world, it was likely due to factors other than stack ranking. And many companies today have rejected the “rank and yank” concept because of its destructive nature. Still, performance management and performance appraisal were critically important to one’s career success at GE, whether you agree with its Darwinian interpretation under Jack Welch or not.

That being said, codifying people into absolute categories is probably a mistake in most organizations and departments for one simple reason: they’re too small to justify such differentiation. For example, a typical bell-curve distribution of performance review scores might look like this:

	Typical Bell Curve Distribution Across Large Populations
≤5 percent	Distinguished performance (score of 5)
30 percent	Superior performance (score of 4)
50 percent	Fully successful performance/meets expectations (score of 3)
10 percent	Partially successful performance/partially meets expectations (score of 2)
≤5 percent	Unsuccessful performance/fails to meet expectations (score of 1)

The catch to interpreting these types of scores, however, lies in finding such patterns and trends over large populations—in this case, containing thousands or even tens of thousands of data points. A typical department with only ten or one hundred team members is too small to try to fit into this neat box. Therefore, generally speaking, while this score distribution template could be helpful as a guideline, don’t force all your people into a box that requires, for example, that less than 5 percent of the people on your team will qualify as “distinguished.” You may have more people than that this year, so don’t let the forced ranking concept limit your ability to award scores based on individual merit.

But beware of the biggest trap awaiting many unsuspecting managers: grade inflation. The difference between scores of 1 (“does not meet expectations”), 2 (“partially meets expectations”), and 3 (“meets expectations”) is monumental. Award a score of 3 or higher (assuming a five-point scale with 5 as the highest), and you’ll make it exceptionally difficult to terminate a worker in the near future. That’s because your anchor document—the annual performance review—validates an entire year’s work, despite prior warnings and final written warnings. While the path of least resistance may be avoidance, and placating the employee with a higher score than deserved may somehow “motivate” them, don’t be naïve: you’ll have placed a major impediment in your way by inflating a score that clearly wasn’t warranted. As a general rule, if you expect to terminate someone in the upcoming review year, your score in this year’s annual performance review will need to show that the individual failed to meet (or at least partially failed to meet) expectations. Speak with your HR representative or company attorney about how to structure the content of the annual review to minimize legal risk.

Performance Reviews: Dealing Effectively with Incorrectly Assigned Individual Grades

Remember that the annual performance review is a process, not a form. When done correctly, the annual performance review is one step in a continuing cycle of ongoing performance measurement, progress against goals, and shifting priorities. Those twelve months of historical performance culminate in the annual performance review document—much like a balance sheet reflecting a snapshot of an organization’s financial and operational performance at a given point in time.

But what if you mistakenly assigned the grade of 3 (“meets expectations”), communicated it verbally and in writing to the employee, and the individual already received a merit increase in a recent paycheck? Undoing your error is always a sticky wicket, but you’ve basically got three choices:

1. Say nothing, because it’s too late to make any changes and may unnecessarily upset the worker.

2. Reissue the review with a failing score and recoup the additional merit payments already made.

3. Allow the employee to keep the money, but write an amendment letter for the record that documents that the review’s overall score was issued in error.

Under normal circumstances, either the second or third option typically makes the most sense. After all, doing nothing about the problem and not even addressing the matter is short sighted, especially if you’re planning on terminating the employee in the near future. But option 3 may have better results than option 2 because it appears to be fairer and less punitive. After all, trying to recoup the money under option 2 may arguably smack of retaliatory action against the employee and could be considered to be in bad taste from a perception or corporate image standpoint. (It was the company’s error, after all!) But clarifying the record on paper under option 3—while allowing the employee to benefit financially from the company’s mistake—shows the company to be wise, transparent, and constructive, which is always your goal when creating and correcting formal employee records.

If you opt to pursue this third option, then here’s a draft of what your written communication to the employee might look like:

Dear [employee]:

We have determined that your recent annual performance review showing an overall score of “meets performance expectations” was issued in error. The purpose of this letter is to establish a clear understanding of your path forward with our organization.

• 2016 Annual Performance Review: The review you signed on 12/16/15 was completed erroneously by your immediate supervisor and delivered to you in error. Your performance rating for 2015 was entered at the “meets expectations” level, and you received a 2 percent merit increase. However, as indicated by the numerous corrective actions that you received throughout the review year, and particularly in the last six months of 2015, the correct performance rating should have been at the “needs improvement” level. As such, we wanted to take this opportunity to clarify the record.

• Corrective Action Notices: You received three documented warnings in various forms for failure to follow equipment processing guidelines, which occurred in July, August, and November 2015. This notice serves as a reminder that these corrective action items are still active in your employment record. Furthermore, any future incidents of failing to follow equipment maintenance rules or instructions may result in further disciplinary action, up to and including dismissal. You are currently on a Final Written Warning, which remains active for six months from the date of issue on November 1, 2015. This is your final opportunity to improve your performance and policy adherence, or your position may be in immediate jeopardy of being lost.

• 2016 Merit Increase Status: Your 2 percent increase will not be reversed or retracted. However, the purpose of this memo is to clarify that your overall score for the 2015 review year was issued in error and that had it been issued correctly, you would not have been eligible for a merit increase this year.

In addition, as discussed with you during today’s meeting, I will remain available to help you and to discuss areas where you require additional support. Please let me know what I can do to help you succeed in your role from this point forward.

Sincerely,

[supervising manager’s name]

Grade inflation occurs often, and companies have to find smart ways of clarifying the record and ensuring that employees have clear expectations going forward when such errors are identified after the fact. By correcting the record with a memorandum of understanding like the sample drafted above, you’ll not only have clarified the record in terms of the failing score; you’ll also have reset expectations regarding the final written warning remaining active, the individual’s job remaining in jeopardy, and the manager’s willingness and availability to help. That approach will clearly place the company in the best light possible should you later need to terminate the individual’s employment despite the inflated annual review score.

Performance Reviews: Correcting for Grade Inflation Across Your Department, Division, or Company

Unfortunately, there are no set criteria to distinguish a performance review score of a 5 from a 4, or a 3 from a 2. What’s important, however, is that leaders within each division or department and across divisions and departments should discuss what those scores might look like in a performance “calibration” meeting. That’s where they can discuss key employees and decide where they should fall on the performance-rating continuum. To do so, however, they’ll need a tool to help them talk through these very subjective types of considerations.

Imagine this: The president of your company tells you that on a scale of 1 to 5 (5 being outstanding, 3 meeting expectations, and 1 being a failure), he expects all of the managers who directly report to him to be 5’s. “If they’re not 5’s, they should all be fired” is the president’s logic. But the head of finance tells you that she believes that the vast majority of her team is meeting expectations and performing well and that she intends to award “overall scores” of 3 to the majority of her staffers, reflecting that they’re meeting expectations and performing well. (Good answer!) Then she hesitates and says, “Then again, the managers in sales and operations will probably award more 5 scores than anything else, so maybe I’ll need to award 5’s as well; otherwise, my group will receive lower merit increases relative to the other departments.”

Is it okay if a manager expects everyone on the team to be a 5 (“outstanding”)? Does it bother you that the head of finance doesn’t feel comfortable awarding what she feels is the right score for the majority of her team, which is 3 (“meets expectations”), because the managers in other departments will inflate scores for their own teams? How do you get everyone on the same page in terms of distinguishing appropriately between scores and assigning grades that truly reflect the level of performance in that group?

The simple answer lies in communication—discussing perceptions of what the scores actually mean and which scores should be assigned to which employees. The rater definition consistency tool (Figure 3.1) can be used as a point of reference for all involved. It helps open the lines of communication and get all leaders “speaking the same language” about what success looks like relative to individual contributions and performance levels over the past year. The definitions aren’t exaggerated, but they’re spelled out to paint a clearer picture of just what makes someone exceptional.

The percentages next to each scoring category reflect what you’d normally expect to see if your company’s scoring results fell under a typical bell-curve configuration. Also, notice that the 3 category—meets expectations/fully successful performance—has two subsets: “a” for those who really try hard but don’t necessary perform with distinction, and “b” for those who perform satisfactorily but don’t necessarily give their best effort. Distinguishing between a 3(a) and a 3(b) can be particularly helpful when engaging in discussions regarding individual contribution levels.

Figure 3.1. Rater definition consistency tool.

Rater Definition Consistency Tool

5: Distinguished Performance (≤ 5 percent)

Role model status. Potential successor to immediate supervisor/highly promotable now.

Performed above and beyond under exceptional circumstances during the review period.

Generally recognized #1 (top 5 percent) ranking among peer group.

4: Superior Performance (30 percent)

Overall excellent performer and easy to work with—smart, dedicated, ambitious, and cooperative, but may not yet be ready to promote because there’s still a lot to learn in the current role. May not have been exposed to exceptional circumstances or opportunities that would warrant a higher designation. However, definitely an exceptional contributor who exceeds people’s expectations in many ways and is a long-term “keeper”—just needs more time in current role to grow and develop and gain additional exposure.

3: Fully Successful Performance (50 percent)

3(a)	3(b)
Consistently performs well and is reliable, courteous, and dedicated. Always tries hard and looks for ways of acquiring new skills but doesn’t necessarily perform with distinction. Works to live rather than lives to work. May not stand out as a rarity among peers but consistently contributes to the department’s efforts and is a valuable member of the team.	Meets expectations overall but may be challenged in particular performance areas. May perform well because of tenure in role and familiarity with workload but does not appear ambitious about learning new things or expanding beyond comfort zone. While performance may be acceptable, conduct may at times be problematic.

2: Partially Successful Performance (10 percent)

Fails to meet minimum performance or conduct expectations in specific areas of responsibility. Is not able to demonstrate consistent improvement. May appear to be burned out or lack motivation, and fails to go the extra mile for others. Lacks requisite technical skills or knowledge relating to particular aspects of role. May perform well, but conduct is so problematic that the entire year’s performance review score may be invalidated. A partial merit increase or bonus may be awarded.

1: Unsuccessful Performance (≤ 5 percent)

Fails to meet minimum performance or conduct expectations for the role in general. The individual’s position is in immediate jeopardy of being lost. The performance review may be accompanied by corrective action documentation stating that failure to demonstrate immediate and sustained improvement will result in dismissal. No merit increase or bonus should be awarded.

Source: The Performance Appraisal Tool Kit: Redesigning Your Performance Review Template to Drive Individual and Organizational Change (AMACOM, 2013)

How these general parameters fit your organization and what they might look like at any given time should indeed differ from year to year. What makes the most sense is to present Figure 3.1 in PowerPoint or a similar medium and openly discuss it with the management team to determine which employees clearly fall in the various categories. Start with the highest generally recognized performers first and see if you can gain agreement as to why the 5’s are 5’s. Your discussion can then proceed to 4’s and 3’s, although you may not want to address 2’s and 1’s in an open forum like that. The point is to get the conversation going. From senior leaders to frontline supervisors, conversations like these need to happen to raise awareness of your organization’s expectations and to provide leaders with benchmarks and guideposts to align their assessments.

What’s the difference between a 4 and a 5? Is it simply a matter of someone who’s able to be promoted into the boss’s role now as opposed to two years from now? Is the difference attributable to outstanding circumstances that allowed employees to assume responsibilities well beyond their job description? Likewise, what’s the difference between a 3(b) and a 2? Is it acceptable to have employees on the team who are technically capable due to long tenure in their role but who demonstrate little ambition or interest in anything outside of their immediate area? What about occasional inappropriate conduct? How “occasional” does it have to be to fail someone for the entire review year? Should we award partial merit increases to anyone who receives an overall score of 2, or should we take that money and return it to the pool to reward the higher performers?

As you know, there aren’t necessarily right or wrong answers to these questions, and much of this is subject to debate. But it’s healthy debate, and it’s wise to have at least one discussion like this before all the managers start writing the performance reviews. Otherwise, without any guidelines or structure, you’ll end up with all the managers using different criteria for what the organization wants to see in terms of proposed overall performance review scores. These group meetings set the tone for the upcoming performance review discussions and documentation strategies.

In fact, as the general level of performance increases across your company, raising the bar and setting higher expectations should become the norm and should change the interpretation of these definitions over time. For example, what looked like superior performance last year may only appear as fully successful performance this year. And if that’s the case, it means you’re using this tool and your organization’s performance management system correctly to leverage productivity across the enterprise.

So kick off a conversation that’s long overdue, and remember that total agreement isn’t necessary. Discussing performance interpretations openly, however, is. And that’s how successful organizational calibration sessions fine-tune performance over time in a performance-driven company.

Workplace Investigations: Understanding Your Role and Knowing Your Limits

Conducting workplace investigations is as much an art as it is a science, and this exercise should generally be left to HR or some other neutral third party, especially if the claim is against you, the manager. But it’s important that you understand the basics of workplace investigations in case you need to partner with HR, an external consultant, or an attorney who may be looking into allegations that potentially involve members of your team. It’s critical that all members of management who are involved are clearly operating under the same assumptions and conducting their fact-finding missions consistently.

While no book on a topic this broad can replace sound legal advice based on fact-specific situations that may come your way on a case-by-case basis as an employer, it’s critical to understand the basics of workplace investigations because so many companies trip themselves up by not following their own internal rules or basic guidelines for fairness and due process. Your goals in conducting workplace investigations should be threefold:

1. Ensure fairness and consistency on the one hand while protecting your company legally on the other.

2. Know when to recuse yourself from an investigation due to a potential conflict of interest or the possibility of garnering a retaliation claim by simply participating in the process.

3. Communicate appropriately both verbally and in writing when it comes to documenting your findings and reaching a timely and reasonable conclusion.

Regarding goal 1, understand that workplace investigations, by their very nature, create tremendous anxiety and angst among the affected team members. As a result, investigations should be completed as quickly as possible and shouldn’t remain in limbo or be open ended. In other words, strip the bandage off all at once if at all possible.

In terms of your formal legal obligation as an employer, here is what courts expect of employers involved in such activities: The employer is obligated to conduct a timely investigation and to reach a reasonable conclusion.

That’s it! You’re not expected to have a magic wand or to look into the heart and soul of your employees. Courts realize that investigations are limited by their very nature and as a result have deemed that legal standards such as “guilty beyond a reasonable doubt” or “guilty by a preponderance of the evidence” are not thresholds that apply to workplace investigations. You simply have to act reasonably, responsibly, and in a timely manner to reach a reasonable conclusion. That being said, you have to use common sense: Listen to both sides of a story before taking action, investigate any witnesses or review documents that can substantiate someone’s claim, and ensure that the written record in place that justifies a particular course of action (especially termination) is thorough, well documented, and well thought through. Also, take prompt and remedial action to put an end to a problem that you learn about as a result of a good-faith complaint.

Regarding goal 2, there will be times when you’re not allowed to participate in an investigation in any way because of the nature of your role within the organization (for example, as an immediate supervisor, department head, or division head). If someone on your team could accuse you of potential retaliation for participating in an investigation, you have to respectfully decline to be involved. In fact, you might consider suggesting that you work from home on the day the investigation takes place so that no one can accuse you of somehow influencing the outcome of the investigation by being present on the company premises.

If you work in a publicly traded company, your organization very likely has a documented business conduct statement or code of ethics. (Even many privately held organizations publish a code of conduct for practical reasons, even if not required by the Sarbanes-Oxley Act of 2002, which is discussed in Question 39 in Chapter 4.) If so, you’ll likely find language in the code of business conduct that reads something along the lines of, “Employees and supervisors may not conduct your own investigation.” Heed those words carefully: Trying to unduly influence an investigation can have far more damaging results than the original underlying cause of the investigation itself! That’s because any perception of attempting to influence or impact what should be an objective and dispassionate workplace investigation is a significant breach of workplace conduct that could result in immediate dismissal.

Companies can’t mess around with bending ethical rules at the time of an investigation, and propriety may dictate that anyone trying to unduly influence the outcome of an investigation be terminated because of the ethical perception problem created. After all, when it comes to matters of ethics in the workplace, the issue drives the outcome: No matter how much tenure you have, how popular you are, or how successful you might be, a significant ethical breach may leave a company with no choice but to terminate—even for a first offense. In short, you may be messing with fire here, so be very cautious so as not to get burned.

Likewise, don’t ever make statements to your staff members about “not going to HR” or “keeping everything that goes on within our department within the family.” Too many managers try to control their teams by throwing out veiled or even direct threats about employees escalating issues outside the group. This is a career land mine for one simple reason: You’ll have created a public record that all employees on your team can attest to regarding the fact that you somehow threatened them—either directly or by employing some type of veiled threat—that they’d be disciplined, terminated, or otherwise retaliated against for escalating matters beyond your immediate control. Again, that fact alone could warrant significant corrective action or even termination against you—regardless of the severity of the issue at hand.

And remember that angry employees have long memories: If someone on your team suspects that you may be looking to discipline or terminate them six months or a year later, that employee—likely a very sophisticated consumer—may report to HR that they feel intimidated working for you and that you’re creating a hostile work environment. How? “My boss threatened us last spring by telling us if anyone was thinking of going to HR to lodge a complaint, he’d find out who they were and find a way to terminate them.” And HR of course can very easily determine that this threat was true: after all, the manager warned the entire team all at the same time! So fifteen employees are witnesses who can substantiate this aggrieved worker’s complaint to HR. That muddies the waters when you may otherwise have legitimate performance reasons to discipline or terminate this individual.

Instead, encourage the employees on your team to escalate matters to your boss, to the department or division head, to HR, or even to the company’s in-house counsel if they feel that’s warranted. Explain that you would generally appreciate a heads-up of a complaint escalating beyond your department to some other member of the company’s leadership team, but that’s optional. What’s more important is that all your team members understand and feel comfortable with the fact that they may escalate a matter outside of your group at any time if they feel it is warranted. That’s the public record you want to have in place in terms of formally addressing your team regarding workplace complaints or other concerns. It’s open, reasonable, and fair. Likewise, it builds trust and creates a healthy culture of transparency. But at its core, it creates a record—witnessed by others—attesting to your willingness to allow your staff members to escalate matters beyond your immediate group if they feel that’s necessary. Simply put, establishing your expectations publicly this way will indeed protect you one day if a workplace investigation ever materializes where you’re accused of some type of wrongdoing.

Regarding goal 3, remember that you’re not in this alone. When a workplace investigation occurs—whether you’re accused or you’re involved in the fact-finding mission—remember that you cannot overcommunicate to HR, the investigator, or your in-house counsel. Play-by-play action is expected and is the norm: the timeliness of your investigation is one of the expectations that a court will have of you both as the supervisor and as the employer. So the rule is “communicate, communicate, communicate” in terms of your findings, new leads or additional witnesses, or potential changes in course that you learn of. I can’t overemphasize how important timely communication is during an investigation. Besides, you’re not a professional investigator—this is only one of a hundred things you’re asked to do at any given time—so depend on the professionals and keep informed to protect both yourself and the company.

Finally, never rush to judgment at the finish line. If you need additional time to look into particular matters, simply place the accused employee on a paid, investigatory leave. This buys you additional time to confirm your facts, to research the documents, and to interview witnesses. Too many companies rush to the firing stage, only to learn in the litigation arena that they didn’t do their homework, hadn’t interviewed the witnesses or reviewed the documents recommended by the complainant (i.e., the accused ex-employee who’s now bringing suit against your company for wrongful termination), or otherwise acted reasonably and responsibly in reaching a sound conclusion. Slow down at the finish line before you reach a final decision and make sure all involved parties (the Operations, Legal, and HR departments) are in agreement with the final decision. This way, if a lawsuit does eventually arise, there will be no surprises and everyone will be on the same page in terms of defending it.

Workplace Investigations: Harassment, Discrimination, and a Cautionary Tale

We can’t complete our discussion of workplace investigations without addressing some of the “big guns” out there in the workplace: harassment, discrimination, and retaliation complaints that can be so damaging to company morale and so potentially costly to organizations from a liability standpoint. Here’s what the scenario typically looks like: A supervisor fails to disclose to HR or organizational leadership that an employee reported that she was feeling harassed. The employee may have asked the supervisor to keep the matter confidential as a personal favor, but in matters regarding (1) harassment, (2) discrimination, (3) retaliation, or (4) potential violence in the workplace, supervisors have no discretion: they must affirmatively disclose to the employee that they will be escalating the complaint to HR (or some other party that typically handles employee complaints). In the eyes of the law, once the worker puts a supervisor on notice, then the entire company is deemed to have been placed on notice. A supervisor has what’s known as an “affirmative obligation to disclose,” and any failure to do so will leave the company seriously vulnerable.

There’s another, less direct, scenario that’s commonly seen where complaints regarding harassment, discrimination, retaliation, or hostile work environment claims go unchecked: A supervisor or member of management simply assumes that if no one makes a formal complaint, then the company has no obligation to act. The “reasonableness” standard holds that if you (i.e., the supervisor or the company) either knew or should have known (i.e., “actual” versus “constructive” knowledge) about a worker being harassed, retaliated against, or the like, you have an affirmative obligation to intercede. The icon of the monkey covering its eyes, ears, and mouth—that is, not wanting to know what was going around it—won’t hold up in court and will do very little to sustain positive employee relations at work. In court, your organization is treated as a corporate citizen, and questions will be raised as to whether that “citizen” acted responsibly and appropriately by interceding on behalf of its most vulnerable and disadvantaged members.

Further, supervisors, managers, and officers of a company are required to affirmatively disclose any and all complaints regarding potential harassment, discrimination, retaliation, or workplace violence without exception, even if the complaining employee asks that no investigation be conducted. Managers cannot and should not promise confidentiality in matters relating to discrimination, harassment, or potential violence in the workplace.

Next, understand the broader, loosely defined terms that employees may throw your way when airing complaints. Many times, they’re not quite aware of what these terms actually mean in the legal sense, but they drop them like bombs hoping to intimidate management by threatening a lawsuit. Here are the definitions of some terms that drive much employment litigation and that you should understand at a high level:

•Discrimination: Under federal law, employment discrimination is a form of discrimination by employers based on race, sex, religion, national origin, physical or mental disability, and age. In addition, states have their own discrimination protection laws and categories that typically exceed those under federal law. A “disparate treatment” claim arises when employees or applicants allege that they were treated differently in terms and conditions of employment based on their race, sex, color, religion, national origin, age, disability, sexual orientation, or any other factors that are not legitimate business reasons.

•Harassment: Harassment is a subset of employment discrimination and generally is defined as subjecting an employee to unfavorable working conditions without business justification. Workplace harassment complaints are divided into two areas:

•Hostile Work Environment: A form of harassment that is so severe or pervasive that it negatively impacts the conditions of the employee/victim’s work environment. Hostile work environment claims make up 80 to 90 percent of all harassment issues that are litigated. The harassment must be offensive to the recipient and to a reasonable person. A hostile work environment can entail sexual harassment and can also be based on race, religion, national origin, color, disability, sexual orientation, age, and other protected categories.

•Quid Pro Quo: A Latin term meaning “this for that,” quid pro quo harassment typically makes up about 10 to 20 percent of harassment claims and is often depicted by the “casting couch” scenario: For the starlet to get the part in the movie, she must sleep with the casting director. In quid pro quo harassment, a supervisor, or someone who has authority over the employee, conditions the terms of employment upon sexual behavior and where a tangible job detriment (e.g., poor performance review, demotion, or termination) occurs when the employee refuses to cooperate.

•Retaliation: Retaliation may occur when an employee’s terms and conditions of employment are negatively impacted because he or she complained about someone within the company or served as a witness against the company regarding claims of discrimination, harassment, or other violations of law or public policy.

Discrimination, harassment, and retaliation are common problems in corporate America. Whether you’re a passive investigator in a claim, based on your leadership role in your company, or you’re the person being investigated, because the claims are aimed at you, simply remember this: Follow the lead investigator’s instructions as closely as possible. The lead investigator may be your HR representative, the director of employee or labor relations, or an outside consultant or attorney. Whatever the case, such claims have the potential to result in significant liability for the company and could lead to a corporate leader’s “summary discharge”—meaning an immediate termination without prior steps of progressive discipline or corrective action.

Let’s look at an unfortunate but all-too-common example, which will serve as a cautionary tale about how summary discharges often result from cases of supervisors dating subordinates without disclosing the relationship to management: An administrative assistant reports to HR that she’s been sleeping with her boss, the VP of Operations, for nine months. She knows it was wrong because her boss is married. However, she felt compelled to do so for fear of retaliation if she didn’t submit to his advances. The HR person listens carefully to the administrative assistant’s claims. He then wisely sends her home on an investigatory leave with pay so that HR can notify the appropriate parties (e.g., higher levels of HR, in-house legal, and the VP of Operations’ immediate supervisor—the Chief Operations Officer [COO]) and prepare to launch an impartial investigation without the administrative assistant present on company premises.

Once HR has escalated this claim to the appropriate parties and developed an investigational game plan and strategy, HR and the COO call in the VP of Operations to explain the nature of the allegation and learn his side of the story. Lo and behold, he readily admits to the affair but claims it was consensual: “We fell in love with one another, my marriage is on the rocks, and I don’t know why she’s coming forward to disclose this to you because it’s a private matter just between the two of us.”

With this he-said, she-said scenario in place and the female subordinate likely reaching out to an attorney to claim quid pro quo harassment, the company swiftly decides to terminate the VP of Operations. First, the investigation isn’t able to prove much beyond the administrative assistant stating that she felt compelled to engage in sex for fear of retaliation and the VP of Operations stating that their affair was consensual. Second, under most organizations’ codes of conduct or employee handbooks, the supervisor is responsible for disclosing a romantic relationship with a subordinate. Failure to do so typically warrants “summary dismissal” in cases like this because of the tremendous liability that such nondisclosures entail (as this case study demonstrates). Third, the organization must immediately protect itself from further legal liability by showing that it acted as a responsible corporate citizen in terminating the VP of Operations as soon as it learned of the problem, so as to mitigate the damage. Fourth, the organization must uphold the integrity of its mission statement by providing a safe and healthy workplace for its workers at all times.

So the VP of Operations is fired pretty much on the spot, and the company is now on the hook for the administrative assistant’s potential claims of harassment under the legal concepts of “strict liability” and “vicarious liability.” Strict liability posits that a company may be automatically (“strictly”) liable for the acts of its managers in cases of harassment simply by the nature of the role and responsibilities they hold as leaders and regardless of their intentions or any negligence or fault on their part. Similarly, vicarious liability makes the company responsible for the acts of its subordinates (in this case, the VP of Operations), even if the subordinate technically did nothing wrong.

It then gets worse for that VP of Operations: Under federal antidiscrimination law, an employer may be legally responsible for discrimination and harassment that occurs in the workplace or in connection with a person’s employment unless it can be shown that “all reasonable steps” have been taken to reduce this liability. While “reasonable steps” are left to legal interpretation during litigation, the primary way of showing that a company acted responsibly and took the reasonable steps necessary to prevent such occurrences of quid pro quo harassment can be found in its training programs. If the executive attended harassment training and code of conduct training, and signed off on the employee handbook that likely addressed discrimination, harassment, and the obligation to disclose personal, romantic relationships that develop with subordinates, these steps all serve as proof that the company acted responsibly and demonstrated that the executive unilaterally acted “outside the course and scope of his employment.”

As such, the company can then look to shift liability toward the defendant (the former VP of Operations) and away from the company, thereby mitigating the company’s legal exposure. Unfortunately, that means that the former VP of Operations could be sued personally for such “managerial bad acts.” In many states, individual managers can be sued for up to $50,000 of their own money for such transgressions; in other states, such as California, however, there is no monetary cap.

It’s important that you, as an organizational leader, understand the role of training, your organization’s code of conduct (in terms of disclosing romantic relationships that develop with subordinates), and your company’s probable course of action should you ever fail to disclose such a romantic relationship. Be aware that an accusation of “consensual” versus “forced” sexual relations can very easily be made by a subordinate against a supervisor.

This “cautionary tale” is all too real for executives who risk such behaviors. Your organization doesn’t pay you enough to warrant your risking your savings and your financial security for such indiscretions!

Effectively Invoking Attorney–Client Privilege

During the course of a workplace investigation, you may want to protect certain communications or recommendations from being legally discoverable in litigation. Attorney–client privilege, if utilized properly, should accomplish this task, as it may be invoked when a complaint involves serious concerns (including potential criminal claims) that may develop into a lawsuit or may have the potential to impact a large number of employees (e.g., class-action status), among other considerations. It is always best to contact your legal department in advance of launching an investigation when you suspect that the gravity of the situation may give rise to significant liability. So be sure to discuss upfront whether your in-house counsel or outside defense attorney wants any particular emails or document exchanges protected. Further, if you have any question about whether or not you should be invoking attorney–client privilege, always err on the side of caution and protect the documentation trail as much as possible.

Note that there are no guarantees when it comes to invoking attorney–client privilege. Just because you mark a document “Privileged and Confidential” doesn’t mean that a plaintiff’s attorney won’t challenge the privilege and that a court won’t overturn it. Therefore, let caution rule the day when it comes to exchanging emails, documents, or other electronic communications that you mark privileged. After all, it could come as quite a surprise if a judge allows the communication to be shared with the other party and made part of the public record, even though you thought you followed the rules properly. These rules, listed below, will help increase the chances that a particular communication or series of communications can withstand legal scrutiny and remain privileged. However, without a crystal ball, you can’t guarantee that the privilege will be sustained because a court has the discretion to disallow the privilege.

That being said, you’ve got to know how to structure an attorney–client privileged communication to maximize the chances of it not being overturned by a court at some point in the future. To do so, follow these general rules and see the example in Figure 3.2:

1. Address communications to your attorney, such as the in-house counsel or an outside counsel, but for attorney–client privilege to become effective, it must be addressed to an attorney who is providing legal advice and counsel. The privilege does not protect communications between workers when no attorney is present. In other words, you can’t send an email to your non-attorney boss and mark it “privileged and confidential” because without an attorney on the receiving end to provide legal analysis and advice, there’s no mechanism to protect the communication from legal discovery.

2. End the communication by asking your attorney for a legal opinion and analysis. You may be challenged in sustaining the privilege if you simply copy your attorney on your various emails without asking for official legal advice. Instead, to sustain the privilege, a judge will generally want to see that you reached out to your attorney for a legal opinion and recommendation. If successful, your description of the facts and your attorney’s recommended course of action will be protected from the plaintiff’s attorney’s eyes (and from a jury’s considerations) should the case proceed to trial.

3. Label the top of the communication or the subject line of an email as follows: “Privileged and Confidential: Attorney–Client Privileged Communication.” This notice should be prominent and easily viewable as soon as someone receives the communication.

4. Copy only a limited number of people who have a legitimate business need to know the information. Do not copy or share the document with others, or the privilege may be lost. After all, if you copy fifteen people on the communication, a court will likely infer that it wasn’t all that confidential or proprietary to begin with. So including too many people in the communication could jeopardize the privilege. As a rule, try to limit the audience to just the attorney or to the attorney and one other person (for example, your boss).

5. Do not communicate the information discussed with the attorney with others unless instructed to do so. The nature of attorney–client privileged communications is that they are highly confidential, limited in distribution, and created at a particular point in time on a strictly need-to-know basis. Failing to create the document under such criteria could result in the loss of the privilege and the subsequent sharing of the material as part of the plaintiff’s attorney’s case against your company.

Figure 3.2. Example of an attorney–client privileged document structure.

Subject Line of Email:

Privileged and Confidential: Attorney–Client Privileged Communication

Heading of Email Body:

Privileged and Confidential: Attorney–Client Privileged Communication

Email Content:

Dear [attorney’s name]:

I’d like your advice and counsel on the following matter:

[Provide details]

Please provide your legal analysis and opinion at your earliest convenience.

Thanks very much.

Paul

Again, not all attorney–client communications will be deemed privileged once submitted in court, so always proceed with caution and continue to communicate in writing as if your document may be used as evidence in court and presented to a jury. You can’t be too careful when it comes to the possibility of your own communication to your attorney being employed as evidence against your company. When in doubt, call your attorney for advice before hitting the send button.

The “E” in Email Stands for “Evidence”

When we talk about the importance of communication during the investigation process, both verbal and written communications can be subjected to intense legal scrutiny. But what’s written down and documented typically outweighs what may have been communicated verbally because memories can change over the months and sometimes years that litigation consumes.

First, understand that the “E” in email stands for “evidence.” Email has become to civil law what DNA has become to criminal law: a rich source of indisputable evidence that can change the outcome of court cases. Managers arguably write an average of one hundred emails per day, and as a result, email has become an almost casual means of quickly communicating thoughts and ideas. And it’s just this casual informality that makes it so deadly: every email that you write as a manager has the potential of being presented to a jury as evidence of your state of mind at the time you wrote it—a state of mind that may reveal some form of animus that you harbored against a plaintiff or ex-employee based allegedly on that individual’s age, race, disability, or other protected characteristic.

As a result, most defense lawyers will tell you not to commit anything to email that you wouldn’t otherwise post on the front page of the New York Times. The same holds for instant messaging and text messaging: all forms of electronic messaging are fairly easily obtained from forensic IT consultants who are trained to scour systems for written communications about a particular plaintiff. And all it takes is one or several off-color remarks or exchanges about the individual’s background, slowness relating to age, or other protected characteristic to sink your legal defense strategy. In addition, your comment can be taken totally out of context, but all’s fair in the world of employment litigation.

Further, never attempt to destroy email evidence because electronic communications can almost always be traced back to its meta-data source. To repeat: it’s practically impossible to destroy electronic communication records. For example, if a manager were to delete an email, empty the recycling bin, and somehow reach into the bowels of the hard drive to attempt to delete the “deleted” recycling bin contents, she wouldn’t be successful in eradicating the message from the system or from the discerning eyes of a forensic IT specialist. Worse, that manager may inadvertently create an electronic record of attempting to destroy evidence, which could arguably lead to claims of “obstruction of justice” or “spoliation of evidence.” You don’t want to inadvertently add criminal sanctions to a civil case, so do not attempt to destroy electronic evidence under any circumstances.

Furthermore, if another member of management sends you an email with inappropriate information, don’t just delete it! Instead, respond back to the manager stating that you cannot give credibility to it contents or recommendations. Then forward the original email, along with your response, to your supervisor, HR, or in-house counsel. Your response, in essence, “nullifies” the problematic email by confirming that the company will not consider it. As a result, you’ll be able to defend the company should that email later come back to haunt you in litigation. For example, you receive the following email:

Paul, we’re going to have to lay off one of our four staff accountants because of budget constraints, and John is the one who’s got to go. He’s the poorest performer with the worst attitude among the bunch, and his computer skills are from the Dinosaur Age, so please let us know what to do to prepare the appropriate notice that he’s going to be let go. Thanks.

Michelle

You respond to the operations manager as follows:

Dear Michelle,

I’m sorry to hear that you’re going to need to layoff one of your four staff accountants. Just for the record, though, the company can’t consider any of the recommendations that you’ve outlined in this email. As you know, our company practices peer group analysis (PGA), which entails considering all four staff accountants based on their tenure, documented performance, education level, and the like. Once we’ve compared them, we’ll then look to see who is the least qualified individual to assume the remaining job duties after the position elimination has taken place. If John ends up being the least qualified individual once all those objective criteria are established and examined, then he’ll be the individual selected for layoff. If not, then someone else on the team may be selected instead.

In addition, Michelle, your comments about his computer skills coming from the “Dinosaur Age” are inappropriate. His level of technical competence will be considered along with everyone else’s as part of the objective analysis that will be conducted, but please eliminate any reference to the “Dinosaur Age” as part of any future discussions or documentation. I’ll work on developing a PGA now and get back to you with our initial recommendations along with projected severance costs. Please call me with any additional questions. Thanks.

Paul

You can forward the completed email to your supervisor and/or in-house counsel for future reference. In addition, before you send a response like this to Michelle, you might want to call her and explain the problem with the email she sent you. Give her a heads-up that you’re going to write her back a fairly stringent email stating that you can’t and won’t consider any of her inappropriate remarks in the layoff selection process. This way, she’ll learn the proper way to proceed in cases like this and won’t be shocked by the tone of your response, which will probably sound to her like a reprimand.

Progressive Discipline: Appropriate Documentation for Addressing Substandard Job Performance and Attendance Issues

Progressive discipline is a series of increasingly severe steps taken when a worker fails to correct a problem after being given a reasonable opportunity to do so. Each step brings with it some added sense of urgency that the problem issue must be resolved or the worker’s job will be placed in jeopardy and ultimately could be lost. The concept is a matter of fairness (see Question 37). Employees need to:

1. Know what the problem is

2. Know what they need to do to fix the problem

3. Be given a reasonable time period in which to fix the problem

4. Be made aware of the consequences if they fail to meet the standards outlined

In my book 101 Sample Write-Ups for Documenting Employee Performance Problems: A Guide to Progressive Discipline and Termination (AMACOM, 2010), I categorized 101 common problems according to performance, conduct, and attendance—the three broadest categories of worker infractions. What’s important to keep in mind is when dealing with performance and attendance issues, most corrective action measures of the same sort or in similar categories follow similar documentation patterns:

Part 1: Narrative

Part 2: Performance Improvement Plan (PIP) and expectations

Part 3: Outcomes and consequences

While the narrative will differ from case to case based on the specific facts, most types of infractions follow similar formats for parts 2 and 3. So, for example, while the details surrounding a typical write-up documenting substandard job performance or work quality will clearly change and need to be customized, parts 2 and 3—the PIP and Consequences—will generally remain the same for those types of problems as well as for tardiness, lack of customer service, failure to adhere to policies, and the like.

The key to documenting corrective action effectively, however, is creating a consistent record that outlines the company’s attempts at proactively rehabilitating the employee while shifting responsibility for improvement away from the organization and back to the employee where it belongs. Following are certain rules and guidelines that will help you document corrective action that your employees will find fair and your company’s defense lawyers will approve.

Rule 1: “Three strikes you’re out.”

Our current employment environment typically encourages companies to follow a three-step approach to accord employees with workplace due process in the form of progressive discipline as follows:

1. Verbal: first written warning

2. Written: second written warning

3. Final written warning

As a general rule, you, the employer, should follow this three-step approach to dealing with problematic employee performance, poor attendance, or tardiness, unless there are mitigating factors that justify an exception. For example, a new hire in a typical sixty- or ninety-day introductory period may not require any documented corrective action at all or possibly one piece of documentation (rather than three) because of the lack of tenure with your company. That depends on the nature of the issue, of course, but courts and plaintiffs’ attorneys typically don’t expect employers to accord much workplace due process to someone who recently joined a company.

Generally speaking, though, I recommend one documented warning of some sort, even for probationary employees. Why? Because “Did the company ever formally discipline you?” remains one of the first questions that a plaintiff’s attorney will ask when deciding whether to take on a new case. If the answer is yes, that attorney will be far less inclined to pursue the claim against your company. Therefore, you can generally consider the documented warning a cheap insurance policy to protect your organization from unwanted legal intrusion. That being said, a thirty-year employee may warrant additional corrective action beyond three steps. In such cases, an additional step like the decision-making leaves that we’ll soon address in Question 35 may be appropriate.

Rule 2: Write in an objective manner.

When documenting the facts in the narrative section of the warning, be sure to write objectively. Remember that you’re not only writing for the employee; you’re also writing potentially for a jury some six to twelve months from now, so your documentation must be clear enough to stand on its own in the litigation arena. For example, turn the subjective statement: “You were disrespectful toward a customer” into something more objective and descriptive: “You were rude and abrupt with the customer when you told him you didn’t care which loan program he picked. The customer complained that you rolled your eyes, placed your hands on your hips, and got up out of your chair in the customer’s home to relay your frustration with his indecisiveness.”

Likewise, “You appeared at the client’s office under the influence of alcohol” is too subjective. Instead, write: “The client reported that he heard you slurring your words, saw you walking with an unsteady gate, and smelled alcohol on your breath from approximately two feet away.” Documenting the objective nature of your findings is critical to creating corrective action documentation that will withstand legal scrutiny.

Rule 3: Document the negative organizational impact.

Document the negative organizational impact that resulted from the employee’s substandard job performance or inappropriate workplace conduct. For example, you might write: “Your failure to meet yesterday’s deadline will require that other members of the team work unplanned overtime, and we will need to hire a temp.” A similar negative organizational consequence might show the impact of the individual’s actions on you as his supervisor: “In addition, I had to work late for the remainder of the week to ensure that we closed our books on time by the month-end deadline.”

Rule 4: Document your expectations.

Regarding step 2 of the written warning’s content, the Performance Improvement Plan (PIP), always document your expectations in terms of what the individual needs to do to fix the problem at hand. For example, “I expect that no further incidents of misplaced or mis-delivered packages or orders will occur in your area. In addition, I expect that you will proactively communicate any concerns you have about not being able to meet a particular deadline or not completing your assignments in a timely manner so that we have an opportunity to dedicate additional resources before the deadline is upon us.” After all, one of the fundamental elements of workplace due process is that the employee needs to know what to do in order to fix the problem.

Rule 5: Document training and supervisory direction.

Include any training and supervisory direction to be provided that will help the employee meet expectations. That’s important because juries expect companies to do more than simply point out problems; they expect organizations to proactively rehabilitate their workers. Otherwise, a “failure to train” charge may be levied against the company in court, arguing that the organization failed to act responsibly because it refused to or failed to train the individual when management knew that the worker would fail without the training.

Therefore, always document the positive and proactive steps that you take to help your employees succeed. This could include in-house or outside workshops, one-on-one follow-up training, or providing the employee with a copy of a policy so that the individual knows what the company’s expectations are (for example, when it comes to attendance and tardiness problems). Likewise, you could recommend that the individual enroll in an accounting class at a local junior college to refine his skills. This shifts the responsibility for improvement away from the company and back to the employee where it belongs. For example, a judge may ask:

Mr. Smith, I see the company gave you a copy of the attendance policy, but the problems continued. Did you take the time to read the policy and, if so, did you speak with your supervisor about any questions you had?

[Yes, I read it but I didn’t have any questions, so I never spoke to my supervisor about it.]

Ms. Jones, your supervisor recommended in this corrective action notice of January 16, 2015, that you enroll in a basic accounting course at a local junior college to familiarize yourself with the basics. Did you have an opportunity to enroll or do anything else to strengthen your core accounting skills?

[No, your honor, I didn’t.]

From these examples you can see how overall responsibility for fixing a problem shifts away from the company and back to the employee. That’s one of the goals of effective corrective action documentation and how it can be used to protect your organization from unwanted legal challenges. More importantly, it’s fair! These are adults, and no matter how much courts want employers to spoon-feed workers, it’s your job in the corrective action process to raise expectations and hold employees accountable for their end of the bargain when it comes to fixing the problems at hand.

Rule 6: Include a closing statement.

When documenting part 3 of the written warning, the consequences, include a closing statement, such as:

Failure to demonstrate immediate and sustained improvement may result in further disciplinary action, up to and including dismissal.

This tagline is essential in according the individual workplace due process. Again, remember that the fourth rule of workplace due process is that the individual must understand the consequences of inaction. If your consequence language is vague, a shrewd attorney for a plaintiff can argue that his client, your ex-employee, had no reason to fear that his job was in jeopardy of being lost. Therefore, generic consequence language, such as “Serious discipline will result if this continues” will make it very difficult for your organization to defend a wrongful termination claim because the plaintiff’s attorney will do his best to convince a jury that “serious discipline” or some other type of generic or vague phrase didn’t communicate the message that the individual’s job was in serious jeopardy. Hence, he was denied workplace due process, and the termination was consequently illegal.

Rule 7: Include an acknowledgment statement.

Draft the acknowledgment statement of the corrective action document in a way that encourages the worker to assume responsibility for the problem at hand. Most companies use this line: “I have received a copy of this document.” The employee signs (or fails to sign) but doesn’t necessary assume responsibility for the problem. Instead, reinvent your acknowledgment statement to look like this:

I have received a copy of this notification. It has been discussed with me, and I have been advised to take time to consider it before I sign it. I have freely chosen to agree to it, and I accept full responsibility for my actions. By signing this, I commit to following the company’s standards of performance and conduct.

See the difference? Being written up shouldn’t ever be taken lightly. Your expectation as a supervisor is that if it happens once, it’s a big deal and shouldn’t ever happen again. That’s a cultural imperative that you’ll want to enforce from day one with all of your team members. Unfortunately, many managers issue corrective action warnings without much forethought about the seriousness of being written up. So treat workers like adults, help them assume partial responsibility for the situation at hand, and use the corrective action engagement as a first step in correcting behavior, resetting expectations, and allowing the healing process to begin.

Further, in final written warnings, you might want to include language like this:

In addition, I understand that this is my last chance and that my position is now in immediate jeopardy of being lost. If I fail to achieve the goals agreed to in this document, I will resign or be terminated for cause.

Can you see why treating employees like adults in your documentation—without a lot of drama or histrionics—can make a tremendous difference in their attitude toward work? This is the kind of language that will arguably keep people up at night, but they have to make a decision as to their commitment level. No one wants to be terminated, and a resignation on their own terms may be preferable to risking a termination for cause. What’s important is that you’re giving them a choice either to resign or to recommit to the job, with no judgment on your part one way or the other. That’s fair and objective and will help employees make adult decisions about their future career with your organization by leaving the drama, apathy, or hostility and anger behind.

For more on the practical answers and approaches to tricky employee relations issues, in addition to disciplining and terminating probationary employees, union workers, and long-term workers who may require more than the standard “three-strikes-and-you’re-out” steps of corrective action, refer to my book, 101 Sample Write-Ups for Documenting Employee Performance Problems.

Progressive Discipline: Appropriate Documentation for Addressing Inappropriate Behavior and Misconduct Issues

Despite the “three strikes you’re out” assumption, the rules of progressive discipline may not be applicable in addressing certain inappropriate behaviors or egregious misconduct issues, and instead the company may issue a final written warning, even for a first offense, or immediately terminate the employee. Many managers mistakenly assume that all problematic issues—performance, conduct, and attendance/tardiness—must start at the first level of corrective action. In actuality, managers have the discretion to skip steps or even progress to immediate termination when it comes to conduct-related infractions.

For example, certain types of grievous infractions are known as “summary offenses” that require no previous documentation to justify an immediate termination for cause, even for a first offense and even from a long-tenured worker with no history of prior corrective action. Theft, embezzlement, fraud, and certain cases of severe harassment may warrant immediate dismissal. Before moving to the summary offense decision, however, it’s usually best to consult with qualified legal counsel to ensure that you’ve thought everything through correctly and filed all the documentation required in case this termination results in litigation.

Not all cases are as egregious as theft, embezzlement, and fraud, of course. Yet depending on the nature of the conduct-related infraction, your organization has the discretion of skipping steps in the traditional progressive discipline paradigm to accurately reflect the severity of the issue. How do you know when to skip steps? Well, if your company would somehow look irresponsible or remiss in not escalating the level of corrective action to match a particular offense, then it stands to reason that your organization’s response to the problem should escalate to meet the severity of the infraction.

For example, if you’ve attempted to extend an olive branch in order to appease an aggressive manager who continues to mistreat employees or abuse the privileges of his leadership role, and your actions were rebuffed, then you have every right to document the issue formally. How you document the individual’s attitude, however, becomes very important. Remember that this kind of document may be blown up on banner paper and presented to a jury months from now as evidence of your management style, so proceed with caution. Consequently, an objective writing style that paints a picture with words in the form of a written or final written warning will fare best:

This morning you engaged in insubordinate conduct when you responded to my request to complete the Jones file by the end of business. Your initial response was to roll your eyes, sigh, and turn to me with your hands on your hips. You stated loudly in front of other members of the staff, “If you want that file completed by the end of the day, you can’t ask me any other questions between now and then. I need to be left alone!” Such sarcastic and unreasonable comments are unacceptable because they are disrespectful and violate company standards of performance and conduct.

First, you were aware of today’s deadline for the Jones file over a week ago. Second, your concerns were shared loudly in front of three of your coworkers, and I received feedback that they were uncomfortable and embarrassed to have witnessed your actions. Third, you do not have the discretion to insist that all other job responsibilities be removed while you work on a particular assignment.

In the future, I expect that you will never again voice your frustration in a rude and unprofessional manner. I expect that any future concerns that you have regarding the assignments on your desk will be shared with me privately in my office and not voiced publicly in front of others. Finally, I expect you to inform me any time that you are falling behind on any of your work assignments so that I have an opportunity to provide you with additional support or resources to meet any deadlines.

Failure to demonstrate immediate and sustained improvement may result in further disciplinary action up to and including dismissal. Further, if you ever again demonstrate conduct or behavior that appears to be disrespectful, insubordinate, overtly challenging, or confrontational, you will be immediately discharged for cause.

Employees can be terminated for inappropriate workplace conduct and for attitudinal problems that appear to be difficult to measure; these fall under the category of insubordination. Documentation clearly describes the employee’s actions in objective terms and spells out your expectations regarding the employee’s behavior should another disagreement occur. In addition, it outlines the consequences of inaction should the employee violate the terms of this warning in the future.

The key to well-written, conduct-related documentation lies in describing the employee’s actions accurately so that your documentation remains clear enough to convince a jury that you had cause to discipline or terminate. Whenever possible, quote the employee’s exact words in the narrative portion of the warning:

When I asked you where your equipment was, you walked up to me, stood approximately two inches away from my face, and stated loudly that you were “annoyed that I was asking you about the location of your equipment.” You raised your voice using an inappropriate and disrespectful tone, and I perceived that you were trying to intimidate me.

When I requested the file in question, you slid it across the table, and all of its contents fell out of the folder and onto the floor. Although you apologized for throwing the folder by saying, “Oh sorry” as it fell off the desk and onto the floor, you rolled your eyes and sighed as if you were annoyed with my request. Your actions were clearly insubordinate.

When John asked you why you appeared to be so upset over a simple request, you pointed your finger at him and waved it back and forth shouting, “Don’t tell me how upset I am! You don’t know me, and you have no right to judge me!” Such actions were clearly inappropriate and unprofessional and violated company standards of performance and conduct.

Likewise, incorporate the employee’s responses to your questions in the document whenever possible. For example,

When I asked you after the incident whether you felt your behavior was inappropriate or disrespectful, you immediately placed blame on your coworkers. I then asked you to focus on the tenor and tone of your response—regardless of who was at fault for the missing equipment. You again placed blame on your coworkers without assuming partial responsibility for the problem at hand. As such, David, you do not appear to be holding yourself sufficiently responsible for the conflict that arose as a result of your challenging your coworkers and me regarding the simple question that I asked you.

To be able to incorporate an employee’s response into the disciplinary narrative that you draft, however, you have to meet with him first to learn his side of the story. And this begs the age-old question: Do I need to meet with employees before issuing corrective action, or can I simply issue the document first and allow them to rebut it afterward if they disagree with the findings?

In almost all cases, meeting with employees first to learn their side of the story—while also letting them know upfront that disciplinary action may be warranted—makes the most sense. First, it speaks to fairness: Everyone wants to be heard before they’re judged, and as we’ve seen elsewhere in this book, mitigating circumstances can make a world of difference in terms of determining the appropriate corrective action to be applied. Second, and equally important, by incorporating an employee’s feedback into the written warning itself, you show yourself to be a fair, patient, and wise employer. Juries look for companies that don’t jump to conclusions and that delay disciplinary action to hear the worker’s side of the story. Can there be times when you issue corrective action without getting the employee’s side of the story first? Of course, but that should generally be the exception, not the rule.

Finally, when you speak with an employee about corrective action—whether for conduct, performance, or attendance—you gain a chance to reconnect. We all make mistakes, and sometimes the company has no choice but to document problematic behavior or performance. But you can ask what you can do to help, if there are any other resources that the employee needs, or if there’s anything the individual wants to share that he’s kept from you for some reason. Extending an olive branch at the time of discipline is an exceptionally wise way of leading others and will generally be appreciated. Sure, no one likes being written up, but if employees feel that their boss handled it fairly, then they can get on with their work lives.

Reconnecting with the employee also gives you a chance to reemphasize that disciplinary action isn’t what you expect to be doing with your employees and that you’re looking for a commitment to avoid it in the future, which you’ll typically get if this is handled appropriately. Also, you’ll typically avoid the drama that occurs when employees refuse to sign or acknowledge that they received the document or, worse, submit a lengthy rebuttal to the CEO. Again, communication at the time of discipline goes a long way in ensuring that the behavior won’t be repeated, which is the goal of this documented intervention.

This is a huge topic, subject to opinion and recent case law interpretations. For additional information and examples, see my book 101 Sample Write-Ups for Documenting Employee Performance Problems.

Writer Beware: “Codifying the Damage” or Documenting “Mental Element Qualifiers” Can Sink Your Ship in Court

There are two common errors that leaders make when documenting investigations. In fact, these same errors are often committed when drafting performance reviews and progressive discipline. They’re easy to avoid, however, if you’re aware of them and understand the logic behind the damage they can cause.

First, be especially careful not to “codify the damage” when documenting your investigatory findings. Many a well-meaning supervisor has unintentionally placed the organization at risk by not thinking through the significance of their notes. For example, documenting that an employee has “sexually harassed” or “retaliated against” a coworker could later be used against your company as a documented fact. As a term of the trade, “sexual harassment” is a legal conclusion. If you confirm in writing that sexual harassment has indeed occurred, then your own investigational documentation may become prime fodder for a plaintiff’s attorney looking to find proof of a supervisor’s inappropriate actions. Similarly, if a loan administrator mishandles a pool of loans by failing to follow appropriate mortgage banking guidelines, then such documented information could become evidence of neglect and mismanagement on your firm’s part if that pool of loans never gets sold on the secondary mortgage market or otherwise becomes discoverable to stock investors.

Therefore, instead of codifying the damage to the organization or to the recipient of a supervisor’s inappropriate workplace behavior, adopt the practice of documenting such matters using language that is less concrete and more fluid in nature. For example, in the case of a harassment issue where it appears that a worker has violated company policy, write, “This individual’s actions appear to violate company policy 5.30.” You might also write, “The supervisor’s actions suggest that he may have inadvertently created an offensive environment” and that, as part of your follow-up action plan, you would expect the supervisor to “never again engage in conduct that could appear to diminish a person’s self-worth or sense of well-being.” Similarly, in the case of the loan administrator’s performance, you might write, “The loan administrator’s failure to follow standard operating procedure could have potentially jeopardized an entire pool of loans.”

Again, while certain documents may be protected by attorney–client privilege because you have need for legal counsel’s analysis and guidance, all of your investigation notes will probably not be protected by the privilege (i.e., barred from consideration by the plaintiff’s attorney). Since you most likely won’t be able to protect all of your investigatory notes in a legal action—in fact, your notes will basically become the company’s foundational defense mechanism to justify its actions—be sure to avoid codifying any damage done by being specifically vague in your documentation, which will prevent your own documentation from inadvertently benefiting a plaintiff’s attorney’s case against your organization.

Likewise, be careful to avoid documenting “state-of-mind offenses.” In particularly egregious cases of inappropriate workplace conduct, investigators and supervisors sometimes mistakenly attempt to paint a picture of the severity of a particular offense by describing behaviors and attitudes using words like deliberately, purposely, intentionally, willfully, and maliciously. Such mental element qualifiers may indeed strengthen your message to the individual about having acted in a highly inappropriate way, but it isn’t necessary to write this way. Instead, let the facts speak for themselves. It doesn’t matter whether “John deliberately tried to offend Sally publicly in front of her whole team.” All that matters is that “John offended Sally publicly in front of her whole team.” The latter is an objective observation, while the former is a subjective judgment.

In the litigation arena, this becomes all the more relevant. Plaintiffs’ attorneys will be quick to cast doubt on the validity of your “objective” investigatory findings if you pepper your notes with adverbs that speak to someone’s alleged state of mind. In essence, you may end up making yourself vulnerable to a slew of legal challenges as plaintiffs’ attorneys challenge your fact-finding skills and attack your credibility with questions about how you could have possibly known what was going on in their client’s (your ex-employee’s) mind at the time of the incident.

Simple solution: avoid words like deliberately, intentionally, purposely, willfully, and maliciously when documenting your findings during an investigation and, as a general rule, stay away from adverbs. To do otherwise would be a rookie mistake that could land your company in hot water.

A Creative Alternative to Formal Corrective Action: Letters of Clarification

Have you ever wondered if there was some sort of interim step between counseling an employee verbally and formally disciplining an employee in writing? You’ve no doubt been frustrated at times by employees whose problematic job performance or behavior falls just below the threshold of a violation of a specific company policy. And because you can’t pin the problem to an existing policy violation, you tend to let it go or tolerate it for far longer than you should. That may no longer be necessary; you can write a letter of clarification as an alternative to formal progressive discipline.

Still, it’s important to remember that a formal company policy doesn’t have to be broken for you to address problems effectively with a member of your team. You’ve got a lot more discretion and flexibility here than you think, especially when dealing with an employee who is apathetic about his work, condescending toward others, taking advantage of a particular situation or personal relationship at work, or who speaks negatively about others on the team.

Addressing your concerns verbally is always the first step. Sharing your concerns in a constructive manner, alerting the employee to the issues at hand, and creating the beginning of a record that could later help the company justify the necessity for taking adverse employment actions like progressive discipline or termination are logical outcomes of verbal interventions. But what happens when your conversations don’t work and you find yourself on a roller coaster, readdressing the same issue every few weeks or months? While you may have the discretion to issue a formal written warning, you may also be concerned that it’s too heavy a punishment relative to the specific facts in the situation. In cases like these, write a letter of clarification as an interim step that confirms your concerns but is milder than formal progressive discipline (i.e., “being written up”).

First, because it’s in writing, it steps up the perceived level of severity and makes the employee realize that you’re serious about the issue and want to escalate beyond verbal discussions. Second, letters of clarification are not part of your company’s formal corrective action program. As such, they lack the “shaming” element that’s so often associated with being “written up.” In essence, you’re escalating the matter without any of the negative trappings of progressive discipline.

What might a letter of clarification look like? While the technique can be used to address all sorts of job performance and workplace misconduct issues, here’s a common example illustrating negligence and carelessness that might appear minor on its face but that, bundled together, paints a picture of an employee who’s demonstrating a lack of interest in her role or who cares little about her coworkers:

Mary,

Over the past three weeks, I’ve shared with you my concerns regarding your overall job performance. Specifically, I’ve notified you that you are not handling patients’ files correctly: Items are being misfiled, and files are being left around the office without being returned to the central filing area. In addition, a patient complained that you delivered a wheelchair to the patient pickup area that was still wet from the rain. Further, on multiple occasions, you have failed to use the magnetic location board to show that you were on break or lunch. As a result, the schedulers were not able to locate you in a timely manner.

This isn’t a disciplinary document, Mary. It will not be placed in your formal personnel file and will not be shared with other members of management at this time. However, I have put my concerns in writing to impress upon you the seriousness of these multiple, smaller errors. My greatest concern lies in the fact that you appear to be less focused on your work or concerned about others’ needs. You also appear to be apathetic about the outcome of your assignments, and several of your coworkers have noticed a change in your work as well and shared their concerns with me.

I want you to know that I’m here to support you in any way I can. However, I am also holding you fully accountable for meeting all hospital expectations regarding your performance and conduct. I recognize that you may have your own ideas for improving the situation at hand. Therefore, I encourage you to provide your own suggestions to turn around these specific performance areas as well as the overall perception of your lower commitment level.

Please sign this document to show not only that you received it but also that you agree to accept full responsibility for addressing these concerns and changing the perception problems that exist. Understand that if these issues are not resolved on an immediate and sustained basis, this document may be attached to a formal disciplinary notice in the future confirming our discussion today. Thank you.

Note the language in the sample above: While this isn’t a formal disciplinary document and will not be placed in the individual’s personnel file at this time, it “may be attached to a formal disciplinary notice in the future” as evidence that the conversation took place and that expectations were reset. Further, in cases of litigation, the letter of clarification is a formal part of the employer’s record to show that the individual was aware of the problem and informed of the company’s expectations. Therefore, the letter of clarification codifies the problem for the record and is typically used as an evidentiary element to demonstrate that the company acted responsibly in according the employee due process.

One note of caution about the use of letters of clarification, however: As practical as this tool may be, you won’t want to issue letters of clarification every time someone does something wrong. If these letters become part of your active disciplinary practice and you issue them all the time, then you may end up inadvertently creating a new practice by turning your three-step corrective action process into a four-step process (i.e., by insisting that letters of clarification be issued prior to corrective action under all circumstances for all employees)—or so might argue a plaintiff’s attorney in the wrongful termination litigation arena. But a letter of clarification, viewed by many employees as a precursor to formal discipline, typically has the same corrective effect as formal discipline without the negative trappings. Added to your performance management toolbox, this alternative could achieve the desired results without any of the drama or angst that comes from issuing formal corrective action.

Decision-Making Leaves: Dramatic Turnarounds Without a Lot of Drama

One of the greatest workplace challenges for supervisors and managers lies in turning workers around when their conduct or behavior consistently disappoints you. Maybe they’re young and don’t value the opportunity your company is offering them, or maybe they’ve been working for your organization for twenty years and suddenly have developed an attitude problem or entitlement mentality that makes them difficult to deal with. A “decision-making leave,” otherwise known as a “day of contemplation,” could be just what the doctor ordered to snap these people back to reality and make them realize how negatively they’re coming across—without you, the employer, having to play the bad guy.

Decision-making leaves typically come into play in scenarios like these:

1. An early career worker demonstrates an entitlement mentality and consistently irritates others but hasn’t been formally disciplined yet.

2. A long-tenured employee is due a greater amount of workplace due process because of her tenure, and you want to add a decision-making leave to the individual’s final written warning as a way of impressing upon her that her position is now in immediate jeopardy of being lost.

3. A problematic employee with family ties to someone in senior management consistently comes close to breaching a formal company policy but never quite violates it, thereby avoiding formal progressive discipline but upsetting everyone around her in the process.

4. A top sales producer who performs his job well believes he can do whatever he wants because he “can’t be touched” as long as he’s the best performer in the group.

In the first case, you may not want to formally discipline the junior worker because he may not realize how he’s coming across, or you may feel that formal corrective action might come across as too heavy-handed under the circumstances. In the second case, your goal in providing this once-in-a-career benefit to a long-term employee will be to help the individual understand the severity of the situation and also to protect your organization legally. (After all, the “three strikes you’re out” method of workplace due process doesn’t necessarily work as well for long-term employees because courts may reasonably rule that you owe the individual more notice than a few simple documented warnings.)

In the third case, you’ll want to break the persistent track record that a problematic employee continues to demonstrate by getting him to assume responsibility for the problem at hand and stop the roller-coaster effect of his behavior—without upsetting the senior executive family member. In the fourth case, the employee only has it half right: he’s responsible for both his performance and his conduct, and he needs to understand that performing well but failing to create an inclusive work environment or fostering a sense of teamwork leaves him failing overall; if he’s meeting only the performance standards but not the conduct expectations, he’s coming in at 50 percent—a failing score in most organizations.

To understand how a decision-making leave works, let’s start with a definition: A “decision-making leave” or “day of contemplation” is a paid day off where an employee causing lots of grief is granted the opportunity to rethink his commitment to working at your company. Unlike a formal suspension, it isn’t necessarily a step in your company’s documented progressive disciplinary process. Also unlike a traditional suspension, the employee’s pay is not docked for the time away from work. The worker actually gets paid to stay home for a day with pay and mull over whether working for your company is the right long-term career move for him.

If this sounds like too lenient a strategy that lets the worker “benefit from being bad,” so to speak, don’t be too quick to judge how effective this tool can actually work in the workplace. Here’s why: Adult learning theory will tell you that when you treat people like adults, they will typically respond in kind. Unlike formal discipline, which tends to punish workers for substandard job performance or inappropriate workplace conduct, decision-making leaves are much more subtle. More important, they don’t negatively impact a (nonexempt) worker’s take-home pay, so there’s no element of resentment toward the employer or embarrassment for having to explain to a spouse or family member why the paycheck is less that particular week.

This element of holding people accountable without issuing corrective action or negatively impacting their pay tends to trigger a guilt response rather than an anger response. Anger is external, and if you, the big bad employer, discipline workers and deduct their wages for any reason, they’ll become angry and self-justify that you’re the cause the problem, the Goliath to their David, the unilateral, punitive decision-maker hurting their career. On the other hand, guilt is internal—as a human emotion, it forces people to look inward and see themselves more honestly and objectively by assuming partial responsibility for the problem at hand. And that’s the ultimate way to resolve conduct and attitude problems in the workplace: by helping workers look internally and introspectively at whether they want to recommit to the organization or resign.

More often than not, the events that will typically trigger the need for a decision-making leave revolve around employee conduct (as opposed to performance or attendance). In most cases, you, the supervisor, will want the individual’s behavior to change, not only for your sake and for your staff’s sake, but also for the good of the employee as well. In the case listed above with the long-tenured worker, you could add decision-making leave language to a final written warning by describing it like this:

Mark, we’ve had a number of conversations regarding inappropriate behavior that you’ve displayed over the past four months, and you received a written warning for inappropriate workplace conduct on April 10, 2016. We initially addressed your over-mentioning your frustration with our organization being “cheap” and not paying fairly, which made some of your coworkers feel uncomfortable and prompted them to come and speak with me. Then we discussed your tardiness and, following that, your demonstrations of frustration that were evidenced by remarks like, “Who’s running this asylum?” and “They’ve got to be kidding. Someone needs a Management 101 class around here.”

Yesterday you engaged in public altercation with a coworker that resulted in your screaming and using profanity in the lobby in front of visitors and vendors. At this point, you’re being issued a final written warning because you don’t appear to be taking this seriously, and your conduct is highly inappropriate and disrespectful. I’m also going to place you on what we call a decision-making leave for a day because this is your first job out of grad school, and I’m truly hoping to help you turn around this predicament that you’re facing. This is how it works: I want you to stay home tomorrow. You will be paid. I want you to know that this is a once-in-a-career benefit that you should use to your advantage.

While you’re at home tomorrow, I want you to give some serious thought as to whether you really want to work here or not. If you come back to work the next morning and tell me that you’d rather resign and look for work elsewhere, I’ll be totally supportive of your decision. You can tender your formal resignation, and there won’t be any hard feelings. But if you come back to work and tell me that you really want to keep your job with us, then you’ll have one additional assignment to complete while you’re away from work tomorrow.

Remember that I’m paying you for the day, so here’s your homework: If you choose to keep your job, you’ll need to prepare a letter for me convincing me that you assume full and total responsibility for the perception problem that exists in terms of your conduct and behavior. You’ll need to convince me in writing that you recognize why there may be a perception problem and again convince me in writing that the problem will be fixed from this point forward and that we’ll never have to have this type of discussion again.

That commitment letter will be attached to your final written warning, and I’ll be holding you to it. I’m considering this a very serious exercise and something that could be an incredibly important turnaround point in your career development. However, if you violate the terms of your commitment letter, you’ll in essence be firing yourself. Do you have any questions or concerns about this decision-making leave that you’ll be taking tomorrow? Do you understand why I am taking this step with you now as part of your final written warning?

The value of this paid leave is that it forces the individual to be introspective and to engage in self-critical insight without the traditional trappings of formal progressive discipline. The worker won’t walk away thinking, I can’t believe my boss gave me a final written warning and is docking my pay; she’s a terrible supervisor, but rather, Wow, I can’t believe I’m getting a day off to consider whether I want to continue working here or to resign. I’m shocked that she’d accept my resignation and that she’d be supportive of my leaving the company. I guess I’d better be good, and although I don’t like any of this, I respect how she’s handling it and realize that I need to turn things around.

See the immediate paradigm shift in the employee’s thought process? The value proposition of decision-making leaves is that they elevate employees in the process by empowering them to take control of the situation. And the hands-off nature of the exercise removes any semblance of judgment, replacing it with an objective, no-nonsense standard that the employee completely manages. In short, it’s not about the company or the supervisor at all; it’s strictly about the employee’s willingness to reinvent himself in light of these issues being formally brought to his attention.

Even if this intervention doesn’t work and the employee must be terminated nevertheless, you and your company still win. You’ll demonstrate your reasonableness as a responsible organizational leader, and your company gains the advantage of creating a record that will minimize legal scrutiny should this ever turn into a wrongful termination or constructive discharge claim. (In a “constructive discharge” claim, the employee isn’t fired but quits. The legal argument is that conditions at work were so bad that any reasonable person would have quit under similar circumstances. As a result, the damages sought for constructive discharge are basically the same as in a wrongful discharge case.) In essence, you’ll have shifted the paradigm away from “irresponsible company did little to proactively rehabilitate a good worker with temporary performance problems” to “responsible corporate citizen went out of its way to help proactively rehabilitate a worker and communicate the severity of the problem as well as future expectations but employee refused to respond responsibly.” Either way—as a thoughtful and caring frontline leader or as a legally sensitive organization trying to minimize potential liability—the company wins.

This decision-making leave strategy is a low-profile, low-drama type of employee intervention strategy that speaks volumes in its subtlety. As a tool in your management toolbox, it may be just the fix necessary to help others see things your way, keep them out of harm’s way, and protect your company all at the same time.

One caveat about decision-making leaves: If your employees are covered by a collective bargaining agreement, then an unpaid disciplinary “suspension” may be part of your company’s formal corrective action process, so adding a paid leave to an unpaid leave may not be necessary or make much sense. In any case, don’t expect the union or an arbitrator to recognize this day of contemplation as a replacement for any formal step(s) in the disciplinary process outlined in the union contract.

Further, decision-making leaves are generally rare and should only be used in situations where warranted (as in our four examples listed above). And decision-making leaves shouldn’t ever be used in cases where excessive absenteeism is the problem: the last thing the worker needs is more time off! Further, the goal is not to make a decision-making leave part of your regular corrective action process where, for example, no one gets terminated without a decision-making leave first. Used on a situation-specific, case-by-case basis, however, this tool can do wonders for turning around employees with attitude problems or otherwise protecting your company from the legal liability associated with terminating long-term workers.

Structuring Terminations That Will Withstand Legal Scrutiny: Making Your Defense Lawyer Proud

In the various courses that I’ve taught at UCLA Extension over the years and in the many workshops I’ve led at conferences, I’ve repeated one mantra: “Don’t manage by fear of a lawsuit. Lawsuits are the cost of business from time to time in corporate America. Instead, simply make sure that if a lawsuit comes your way, you’re getting sued on your terms and not theirs.” Sage advice no doubt, but you may be wondering what that actually looks like.

First, let’s look at its opposite so that we know where we don’t want to go: When managers storm into HR and demand that an employee be terminated immediately, it’s typically because some proverbial straw has broken the camel’s back. The final incident usually isn’t that grievous or egregious; the manager simply can’t take it any more and wants the person gone. The HR representative pulls the personnel file and finds the following:

Number of disciplinary documents on record:	0
Number of performance reviews on record:	5
Actual performance review scores (on a scale of 1 to 5):	3 (“meets expectations”)

And that’s where the situation breaks down. After all, reasons the HR person, the manager hasn’t done her job of holding the individual accountable for his performance, setting and enforcing expectations, and demanding higher quality products or services. Rather, the manager allowed the employee to drift, year in and year out, ignoring the multiple problems that she saw, avoiding the situation and simply hoping it would get better on its own. As a result, there’s no documentation on file to justify and support a termination.

The HR representative reasons with the manager:

You’re asking me to approve terminating this person because he failed to make himself available for your call last night at 8 PM? I understand you’re frustrated because he said he would be available and because you emphasized how important this was, but there’s no record to go into litigation with. In the eyes of the law, he’s performed at a perfectly acceptable level for the past five years, hasn’t once been censured by the company for any performance or conduct-related issues, and is now being terminated because he wasn’t available for an 8 PM phone call on one particular night—probably because he’ll say he had family emergency of some sort. Can you see how we’d look if this case went to court?” A plaintiff’s attorney would argue that we are reactive hot heads and would likely prevail in court under a wrongful discharge claim because we failed to accord the employee due process in the form of progressive discipline.

No manager, no matter how angry or frustrated, could overcome the HR representative’s argument here. So the manager is angry at HR, angry with herself, and irate that the system doesn’t allow companies to fire employees who refuse to work hard and hold themselves accountable.

But if you’ve ever found yourself in this particular predicament, realize that you’re not alone. Understand that the nature of the final incident is crucial to any termination decision because it justifies the company’s decision to separate the employee. If the final incident is minor, however, and sounds like it might be difficult to sell to a jury of the worker’s peers, then you might need to check your frustration and understand that your organization is not quite ready to pull the plug yet. More importantly, though, it doesn’t have to be this way.

Instead, picture this: You’ve had ongoing communication with this employee as well as all the workers on your staff. You hold one-on-one quarterly meetings allowing them to check in with you and report on their progress and correct and adjust their goals as changes in plan dictate. You’ve had the opportunity to reset expectations so that employees can feel respected and able to make their own unique contributions to the projects at hand.

However, one employee doesn’t work well with others. She may be burned out or bitter, may have an anger management problem, may present herself like a bully, and may make everyone feel like they have to walk on eggshells around her. Despite all your efforts, this person stands apart from the rest and refuses to put others’ needs first, accommodate your needs as her boss, or otherwise make a positive contribution in the office every day.

Rather than avoiding these somewhat below-the-radar problems, you address them objectively and dispassionately when they arise. You provide the necessary verbal coaching and encourage this individual to reinvent her working relationship with her peers. You recommend that she assume partial responsibility for some of the problems she’s having in getting along with others, and you hold her accountable for her own perception management in terms of raising her awareness of how she’s coming across to others.

Still no success; she won’t play nicely. You confer with HR or with your boss and create a united front so that she can’t later “split the baby.” You issue the first step of corrective action in your organization’s progressive discipline program—a documented verbal warning. Unfortunately, there’s little sustained improvement. A second incident occurs in which she is witnessed badgering someone from a different department who makes a formal complaint to her department head about this individual’s overly aggressive behavior. That leads to the second step of progressive discipline—a written warning. You include the appropriate language that documents that the employee’s failure to demonstrate an immediate and sustained improvement may result in further disciplinary action, up to and including dismissal.

Still no dice. Three weeks later, she’s at it again, this time losing her temper with you and engaging in clearly insubordinate and highly disrespectful conduct. The final written warning is issued. Likewise, you offer the individual training, access to your company’s Employee Assistance Program, and any other resources that may help her strengthen her interpersonal relationships and take better control of her temper. She refuses your offer. Lo and behold, it’s time to issue your annual performance reviews, and you assign her an overall score of 2, “partially meets expectations.” You praise her technical job performance but clarify that her conduct remains unacceptable and that her final written warning remains actively in place. She receives no merit increase or bonus.

With the final written warning and annual performance review in place, a final incident occurs one month later in which the employee demonstrates clearly unprofessional behavior that violates the terms of her final written warning. The company moves forward with the termination, and her coworkers feel relieved that the angst and tension will finally dissipate. They also respect your leadership in handling the matter in a straightforward and direct way because they could figure out on their own that the individual was being actively counseled and advised about her behavior. Now the group healing can begin.

But wait! The employee has filed a lawsuit for wrongful termination and discrimination. It alleges that you harbor some sort of animus against this woman because of her age and sexual orientation, and the law firm is making outrageous demands for a settlement. Understandably, you feel nervous about your decision to have terminated her months earlier. Well, fear not. You can’t manage by fear of a lawsuit, and you can’t be lured into analysis paralysis when dealing with substandard job performers or misconduct issues simply because the individual has threatened to sue in the past or may sue in the future. Instead, you think back to the standards you’ve set for your whole team. You reflect on how you’ve held everyone accountable on a consistent basis. And you realize that you could not have allowed this individual to wreak havoc on the rest of your team by making work a miserable experience for everyone else in the department.

Finally, you reason, bring it on! The progressive disciplinary documents are fair and cite concrete examples of inappropriate workplace behavior. The failed annual performance review invalidates an entire year’s work because the individual was a net negative in terms of her overall contribution to the team. And the clean final incident that triggered the termination was incontestable in terms of the egregious nature of her behavior despite the organization’s prior attempts at proactively rehabilitating this individual and resetting clear and consistent expectations.

Overall, you can be very proud of your performance, your team’s support, and your management’s agreement to terminate the employee for cause. After all, this individual may feel that she was terminated due to some prejudice on your part, but you realize she was never willing to assume any responsibility for the problems at hand. She intimidated and continually bullied others, and you had to stop such behavior using the tools and policies available to you as a corporate leader. You partnered with your boss and HR (or your in-house or outside counsel) appropriately, and you have nothing to feel bad about. In essence, it isn’t that you terminated the employee; it’s that she terminated herself. And you’ve got a clean record and clear conscience that will help withstand legal or ethical scrutiny.

As for the lawsuit, it’s up to the attorneys to deal with it at this point. One thing’s for sure, though: It’s simple to file a lawsuit. All it takes is a one-time processing fee of around $100 or so, depending on where the lawsuit is filed, and a completed form or two, and an ex-employee is off to the races. But you’ve done an excellent job of treating the individual fairly and consistently. You’ve abided by your company’s policies and procedures and issued corrective action and a failed annual review appropriately. And there were no surprises—this lawsuit was accounted for and defended against before it was ever filed. All because you, the immediate manager, took a responsible leadership position in managing the situation.

Whether the lawsuit will proceed is out of your hands at this point, but know deep down that you’ll have mitigated much of the damage because of your documentation trail. You’ll have protected your company legally and restored balance and harmony within your department. You won’t judge this individual personally by any means, but you’ll simply realize that the timing wasn’t right for her to contribute to your organization in a healthy and meaningful way at this point in her career.

And you’ll sleep well at night knowing that you mastered this process: you know how to manage subpar performance, both in terms of verbal coaching and formal corrective action, and you know you can do it again if need be. In short, you can be proud of yourself, despite the unfortunate circumstances involved. And you’ll have made your defense lawyers’ lives so much easier because it’s rare that they have a case like this that’s so well executed and easy to defend. Well done and congratulations—you’re now a master in the game of leadership defense.