Performance Management: Moving Past the Annual Review

With the workplace more than upended in this pandemic era, one traditional HR practice, the annual performance review, may begin to fall further to the wayside.

One reason, according to a recent Gallup survey, is that only 20% of employees say their performance is “managed in a way that motivates them to do outstanding work.” Plus, Gallup notes only 14% of employees strongly agree their performance reviews “inspire them to improve.”

A number of recent research studies, in fact, show that traditional annual employee reviews often lead more to employee de-motivation and dissatisfaction with their roles in their companies and organizations.

In what is a growing trend, many companies and organizations across industries are moving away from formal annual reviews to a new process of performance management in which employees receive what they’ve been asking for: more regular coaching and meaningful, two-way conversations about setting measurable goals for the future (with less emphasis on the past).
Especially in this era of social media, employees want to get and give this kind of performance feedback on a regular (ideally weekly) basis, and not just once a year.

A primary definition of performance management is about the ongoing process of communication. For employee performance management, it’s now about clarifying expectations, goals, exchanging feedback and reviewing results on a regular basis throughout the year.

As it stands, companies adopting this new performance management process report having dramatically improved employee communications and morale.

Employees today expect continuous learning. With this new performance management practice, managers are called upon to be more agile in their roles and serve as coaches who can facilitate frequent discussions with employees about capabilities and skills in relation to their assignments.

The bottom line is employees want a great deal more of this coaching relationship with their managers. That is, they’re expecting their managers to help them stay focused on building their professional futures to help drive company and organization growth.

impactAction: If you have questions or want to learn more about implementing a performance management program, contact us at or 443-741-3900.

MD Minimum Wage Rises in 2021; PA Enacts New Overtime Measure

Maryland’s minimum wage will undergo its next incremental increase beginning January 1, 2021.
For Maryland employers with 15+ employees, the minimum wage rate increases to $11.75/hour (from its current rate of $11/hour).

For Maryland employers with fewer than 15 employees, the minimum wage rate increases to $11.60/hour (from its current rate of $11/hour).

Click here to view Maryland’s incremental minimum wage rate schedule.

As a reminder, Virginia’s state minimum wage will increase to $9.50/hour (from its current rate of $7.25/hour) on May 1, 2021.

Pennsylvania’s statewide minimum wage remains at $7.25/hour in line with the current federal level. In a related development, Pennsylvania this month enacted a new overtime pay measure, increasing the maximum salary an employee can earn and still be eligible for overtime. Learn more.

Planning for 2021: Building an Employee Handbook for Your Company

With the new year just ahead, consider updating your current employee handbook – or if your company doesn’t have one yet, develop one from scratch.

With employment laws and regulations becoming more complex and in flux over the course of the pandemic, employee handbooks can be a valuable tool for companies to have in place to ensure regulatory compliance and optimize employee well-being and performance.

Indeed, as state, federal and local laws evolve, companies are required to comply with these changes and ensure their employees know their rights and obligations.

Employee handbooks should be updated to cover the changes in all applicable laws and regulatory guidance affecting companies and organizations, such as the new “Families First Coronavirus Response Act” and/or with EEOC regulations.

Stay current on changes in employment laws (especially for companies with multi-state operations) and include these changes in your handbook.

Handbooks also provide a framework for effectively managing people. They deal with everything from performance management to codes of conduct (e.g., what kind of behavior is expected in the workplace, whether remote or onsite).

In essence, employee handbooks:

  • Help new employees learn and understand the procedures and policies of the company
  • Serve as communication guides to share information about expectations, benefits eligibility and procedures related to employment
  • Help business owners and organization leadership avoid compliance trouble
  • Well-designed, updated employee handbooks ultimately provide a clear, concise direction for employers and employees on how to proceed within their organizations.

impactAction: If you’re interested in learning more about about developing or updating an employee handbook for your team, contact us at or 443-741-3900.

Montgomery County (MD) Government Enacts New Harassment Standard

Montgomery County (MD) Government this month enacted a major revision to its Human Rights Law, putting in place more relaxed standards for proving workplace sexual and discriminatory harassment.

The new measure, Bill 14-201, which goes into effect on Jan. 15, 2021, replaces the current federal standard for harassment claims (i.e., harassment must be “severe and pervasive”) for “[whether] a reasonable victim of discrimination would consider the conduct to be more than a petty slight, trivial inconvenience, or minor annoyance.”

In addition, the new law requires victims’ harassment claims to prove at least one of the following conditions:

  • “[s]ubmission to the conduct is made either explicitly or implicitly a term or condition of an individual’s employment”
  • “[s]ubmission to or rejection of the conduct is used as a basis for employment decisions affecting the individual”
  • “[t]he conduct has the purpose or effect of unreasonably interfering with an individual’s work performance or creating a working environment that is perceived by the victim to be abusive or hostile”

impactAction: Montgomery County (MD) employers should prepare for this new policy by including it as an update in their employee handbooks and as part of any relevant employee training programs.

Getting on Track with Wage and Hour Compliance

Every employer, regardless of company size, needs to comply with basic employment laws that regulate wage and hour practices. Yet, according to U.S. Department of Labor (DoL) data, roughly 70% of employers often violate wage and hour regulations without realizing it.

DoL expects that employers know and adhere to wage and hour regulations. Take a look at the following six tips to understand the fundamentals of wage and hour regulatory compliance:

  • Ensure your employees are properly classified as exempt or non-exempt to be in compliance with federal and state regulations
  • Familiarize yourself with the overtime exemption criteria and remember that simply because an employee is paid on a salaried basis does not automatically disqualify the employee from entitlement to overtime compensation
  • Secure and maintain signed time-sheets from all non-exempt employees verifying their hours worked (and retain such time-sheets for at least three years)
  • Avoid prorating/reducing an exempt employee’s salary based on the quantity or quality of work performed (e.g., less than a full day), unless such a deduction is specifically permitted under federal law
  • Familiarize yourself with the wage and hour laws that pertain to the states in which you employ personnel
  • Ensure that employees are properly classified as either W-2 employees or 1099 independent contractors in accordance with IRS guidelines

With these steps, you can mitigate your company’s risk of liability through proactive review of your wage and hour practices.

impactAction: If you need assistance with setting your company or organization’s wage and hour practices, contact us at or 443-741-3900.

In Case You Missed These impactnews Articles . . .

A Managers’ Toolkit: Helping Employees Through Today’s Crises
The Importance of Documenting Employee Performance Issues
Balancing Act: Employer-Employee Rights and Responsibilities