HOMEAre There Legal Reasons To Do Performance Management Correctly?
The answer is yes. There are some legal reasons for companies and managers to undertake performance management AND do it properly. However, the reasoning is sometimes misunderstood.
The major legal rationale for doing performance management properly is that it a) helps protect companies from frivolous law suits from employee who allege that they may have been discriminated against by virtue of being a "protected class" -- a visible minority, or suffering from a disability and b) having proper documentation produced by an effective performance management system helps a company defend against such charges if they go to court.
The key legal issue in legal cases is that the company will be expected to show that any adverse decisions made about an employee (e.g. termination, denial of promotion, etc), were made legally (i.e. not based on illegal discrimination). Proper documentation (part of the performance management process), AND, notification of employee of performance problems, working with the employee to address them, etc. protects the company.
In countries or states where the company can fire or promote without additional constraints, performance management does not make a difference, except in relation to anti-discrimination laws.