• Companies should follow some performance appraisal procedures to protect themselves from employee lawsuits.Stockbyte/Stockbyte/Getty Images
  
  Employee performance appraisals are an important aspect of corporate America. In the litigious society we live in, it is important for supervisors to be aware of how to provide these appraisals. Frank & Breslow, a law firm that specializes in employment and labor law, advises that supervisors should base their evaluation on the employee's typical performance over the appraisal period.
  
  

Communication

• Before writing a performance appraisal, you should make it clear to your employees what the basis of the appraisal will be. You should also give the employee ongoing feedback about his performance. Whenever possible, identify the employee's shortcomings and give her a chance to correct them. Document in writing any instances of the employee's performance not being up to par.
  
  

Fair and Honest Evaluation

• You should conduct a formal annual written employee performance evaluation. It is important to provide a fair and honest evaluation. This will reduce the chances that an employee will file a lawsuit against your firm if he is unexpectedly fired. And you will have proof of fairness if the employee invokes the Equal Employment Opportunity Act, or other state and federal laws.
  
  

Employee Acknowledgement

• Have the employee read and sign off the written evaluation. This sort of acknowledgement will help if you need any evidence that you asked him to improve his performance. The employee could comment in writing, before signing off, if he disagrees with any aspect of the evaluation.
  
  If the employee does not want to sign off on the appraisal, document the refusal with a note on the evaluation. Your company's human resources department will follow up with the employee to find out the reasons why. Human resources will document the employee's explanation. This sort of approach emphasizes the company's fair treatment of employees, considering that the employees have a chance to present their side of the matter.