Like every other field, HR features elements of conventional wisdom, which are often right. But it’s wise to leave room for creative thinking, especially if it can help reduce legal exposure or other risks. For example:
- Casting a wider net in recruiting may not always be the way to go if there’s a strong internal candidate. An external posting can create unnecessary legal risk.
- Written warnings for performance aren’t always the best choice because they can lead to discrimination claims that then become the basis for retaliation claims. Sometimes bypassing progressive discipline makes more sense.
- Doing away with managerial discretion in bonuses, however well-intentioned, may give rise to class-action challenges over the basis for the bonuses, such as performance appraisals.
- Avoiding discussions about suspected alcohol abuse might not be risk-free, even if it does limit Americans with Disabilities Act exposure. Disability-related inquiries are prohibited, yes. But employers aren’t barred from asking an employee if everything is OK, expressing concern and perhaps referring someone to an employee assistance program, using their best judgment about when and how far they should reach out.
Departing from conventional wisdom shouldn’t always be the way to go, either. But consider the following scenarios.
Casting a Narrow Net
Renee is vice president of marketing. The marketing director position becomes available, and Renee wants to promote Alexa into the job.
Following the conventional wisdom relative to increasing diversity, HR strongly encourages Renee to post internally and to recruit externally. Renee reluctantly agrees to HR’s persistent encouragement.
There are three strong final candidates. Ultimately, Renee goes with her first choice, Alexa, and promotes her.
Alexa is a white woman. One of the unsuccessful external candidates, Max, is black.
When Max looks at Alexa’s credentials as she has described them on a social media profile, he concludes that he is more qualified than she and files a charge of discrimination with the Equal Employment Opportunity Commission alleging race and gender bias and ultimately sues in court.
What would have happened if the position had not been posted internally and externally? Alexa would have gotten the job, but there probably would not have been a charge, let alone a lawsuit.
HR usually should encourage leaders to expand the pool of potential candidates. But when external posting is simply going through the motions, an employer ordinarily is better off not doing it. When the deal is effectively sealed, the posting will have a fraudulent feel and does nothing more than create a pool of potential litigants.
Bypassing Progressive Discipline
David has been employed for seven months. His performance is mediocre at best. Sandra, his manager, wants to terminate David’s employment, even though David has received no warning.
Following the conventional wisdom that an employee should receive some warning and be given an opportunity to improve before he or she is let go for performance, HR encourages Sandra to give David a warning. Sandra reluctantly agrees, and a written warning is issued.
After David receives the warning, he claims age discrimination. Following an investigation, the company concludes that the internal claim is without merit.
Unfortunately, David’s performance does not improve. To the contrary, he makes some major mistakes and ultimately is discharged.
David files a charge alleging age discrimination and retaliation, and his claims end up in federal court. While the court dismisses the age claim, the retaliation claim is sent to a jury and the case ultimately settles.
What would have happened if the company had terminated David without a warning as Sandra initially had requested? It probably would have ended up with an age claim but not a retaliation claim. And a retaliation claim often creates the biggest risk.
A warning about warnings: Sometimes they increase an employer’s legal risk by creating an opening for an employee to manufacture a retaliation claim by asserting a protected complaint or taking a protected leave.
Particularly early in a worker’s employment, it may sometimes be safer to terminate without a formal warning. Therefore, don’t assume that a warning is always the safest move legally.
Untying Managers’ Hands
A company has conducted a pay-equity audit of discretionary bonuses received by its salespeople. Substantial discretion is exercised by sales managers in determining the amounts of such bonuses, and the results of the audit are cause for concern. The bottom line: The discretion results in men receiving significantly larger bonuses than women in cases when their jobs are substantially similar or comparable.
In response, the company decides to change its bonus plan. Following the conventional wisdom that managerial discretion increases the potential for bias, the plan is modified so that managers now have no discretion. The precise amount of the bonus is specifically tied to an employee’s salary grade and performance evaluation.
The elimination of discretion relative to bonuses removes the ability of an employee to argue that managerial discretion resulted in discrimination against him or her. But the absence of discretion in determining bonuses exposes the employer to a potentially greater risk: a class-action claim that bonuses are directly linked to performance appraisals and that there is gender—or other—bias in the performance appraisal process on a classwide basis. In other words, the absence of any managerial discretion in determining bonuses creates the commonality that’s necessary for class actions.
Employers must walk the razor’s edge to avoid individual bias without making it easy for an employee to obtain class-action certification. Retaining some managerial discretion is not necessarily a bad thing; indeed, it may be desirable. Of course, employers need to focus on preventing and correcting bias in appraisals, too.
Discussing a Taboo Topic
Historically, Kate has been a superb salesperson. But there has been a steady decline in her performance. Further, there are objective reasons to believe that alcohol may be the cause of this decline.
Keisha, the vice president of sales, wants to talk with Kate about her concerns—specifically, that Kate may be drinking too much. Following the conventional wisdom, HR recommends that Keisha focus solely on performance. After all, to address perceptions regarding alcohol is to invite a perceived disability claim.
Keisha follows HR’s advice. Over the next two months, Kate makes some major errors, causing her employer to lose more than $200,000. What’s more, Kate becomes increasingly abusive toward her colleagues, and two of her subordinates file harassment claims.
Sometimes, employers need to address the perceived cause of the performance problem, because avoiding that risk is not risk-free. It may well expose the employer to other risks, as this example illustrates.
The bottom line: Ignoring the elephant in the room may cause more risks than it avoids. HR today is about managing, rather than avoiding, risks. Absolutes—such as always focusing only on performance—are sometimes absolutely wrong.
Jonathan A. Segal is a partner at Duane Morris in Philadelphia and a SHRM columnist.
Illustration by Adam Niklewicz.