Court Upholds Management's Right to Change Performance Ratings 12-15-2003
- By Ann F. Kiernan

Employees have been complaining about their performance appraisals for a long time. The Chinese philosopher Sin Yu remarked about 1,700 years ago, "The Imperial Rater of Nine Grades seldom rates men according to their merits, but always according to his likes and dislikes." A recent federal case upheld senior management's right to change a front-line supervisor's performance ranking, even when that change resulted in the employee being placed in the lowest ten per cent and fired.

Richard Landers was a service manager for Amtrak. Amtrak's manager performance ranking system had seven categories, with grades from 1 to 7. Mr. Landers' immediate supervisor gave him four 7s and three 3s. The general manager reviewed the group's ratings and lowered every manager's ratings, reducing Mr. Landers' score to five 3s, with two 2s in safety and financial resources. These final ratings put Mr. Landers in the bottom ten per cent of all managers, and he was fired as a result.

Mr. Landers sued, claiming that the 2s and 3s were false and defamatory. The court held that because a 3 was defined as "met expectations; partially achieved goals" it could not reasonably be construed as defamatory and threw out those claims: "Declaring that an employee has performed satisfactorily cannot harm his reputation".

While there was no doubt that the 2s, defined as "rarely met expectations" could harm Mr. Landers' reputation, the court found that the general manager had described in detail the data she had considered and the analysis she made before giving Mr. Landers those ratings. Since she had reasonable or probable cause for the ratings-even if in hindsight they proved to be false-Amtrak was legally protected.

Landers v. National Railroad Passenger Corp., ____ F.3d ___, 2003 U.S. App. LEXIS 20001, (8th Cir. 2003)

What this case means to you:
To make sure you are a fair and legal Imperial Rater, you should:

• Clearly communicate your objective, measurable goals and expectations to employees;
• Provide frequent feedback-every week or even every day, if possible;
• Keep appropriate timely documentation of employee performance. You should note both good and bad behavior, with lots of concrete examples; and
• Review our Layoff System, and the Wrongful Termination Guide.

Information here is correct at the time it is posted. Case decisions cited here may be reversed. Please do not rely on this information without consulting an attorney first.