Just to set the record straight right at the beginning, there are no laws, either federal or state, that directly address performance appraisals. (It goes without saying that you cannot violate Title VII or any related laws.) When and whether to do a performance appraisal, who does it, who has access to it, whether or not a raise goes along with it, and all the affiliated questions are all completely a matter of company policy.
That being said, while no one likes performance appraisals, they're a good tool. They're a good way of managing expectations. They can keep both you and the employee on track. But we all put off doing them as long as we possibly can.
Most of us have policies under which an annual review is the point at which employees receive their annual raise. Because of this, most employees are eager to have their review, even though they don't like them any better than we do. And if their review is late, as defined by the policy, they're going to want their raise made retroactive to the "due" date.
They have a point. If the company policy is to have a review at a particular point, it should be done within a couple of weeks either way of that point. It's not fair to the employees to keep them hanging. And if they are due a raise, they shouldn't have to wait for that either. If they have to wait more than a pay period for the review/raise, it's only fair to make the raise retroactive.
But what if they aren't doing a good job and aren't really entitled to a raise? Then it's even less fair to keep them waiting for a raise that isn't going to come.
Of course, nothing should ever be a surprise. I've emphasized in previous columns the importance of communication, and this is no different. There should be sufficient communication between you and your employees so that they know whether or not they're doing a good job and what, if any, problems you have with their work, long before it's time to have their review. The review should be a formality, putting into formal terms what you and the employee have been discussing all along. The raise, now that might be a surprise, but the results of the appraisal shouldn't be. If the employee is doing a good job, they deserve to know that. If the employee is not doing a good job, you deserve to have them improve, and the only way for that to happen is for you to tell them what's wrong.
What I'm getting at is that if the company has a policy to do appraisals at a certain time, we, or the managers we counsel, need to be making every effort to complete them in that time. We can hardly expect the employees to honor company policies when we do not, particularly the policies that directly affect their compensation!
Watch those calendars!
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