NAR's Employer/Employee Policy Guidelines
NAR'S EMPLOYER/EMPLOYEE POLICY GUIDELINES
The National Association’s Blanket Professional Liability Insurance Policy provides defense costs coverage of up to $1,000,000 (defense cost only) per claim per REALTOR® association for suits against the association and its directors or officers arising from hiring, firing, compensation, employer privileges, or other terms of employment, provided the local and state associations follow the employer/employee guidelines promulgated by the National Association.
The guidelines must be followed. If they have been formally adopted but not followed in the termination process, coverage will not be available.
Note: If the law in your state requires action that differs from these guidelines, you should comply with state law.
Performance Review
In a performance review, discuss both the employee’s outstanding accomplishments and those behaviors that need improvement. You and the employee should set goals to be met by the next performance review.
Review all new, transferred, or promoted employees six months after the start-ing date in the new position. You should schedule the employee’s second perfor-mance review six to twelve months after the first, and the third and subsequent reviews on an annual basis thereafter. You may conduct additional performance reviews if the employee’s performance or behavior warrants it. All performance appraisals must be documented in writing and signed by the employee. Keep in mind that performance reviews do not necessarily require wage and salary adjustments.
Disciplinary Action
You should follow set steps when disciplining for poor performance and violation of any standards of conduct that you have developed. The following disciplinary steps are arranged in ascending order of severity:
- Verbal warning*
- Written warning*
- Termination
Your decision on how far to progress should depend on the nature of the viola-tion or performance problem, its seriousness, its frequency, and the employee’s record.
*Verbal and written warnings may be given more than once.
Verbal Warning
For many minor performance problems, you need only to give the employee a verbal warning. Meet with the employee as soon as possible after the problem has occurred and clearly explain the violation or performance problem. Next, tell the employee why it is a violation or problem and discuss the future behavior you expect.
Note in writing the day, time, and content of your conversation for future ref-erence. If the employee repeats the behavior, or if the situation doesn’t improve within a reasonable time (this depends on the seriousness of the infraction), you may repeat the verbal warning or proceed to the next step in the process.
Written Warning
The next step in progressive discipline is to issue a written warning. Use written warnings if the following items pertain to the employee:
- Continually repeats minor violations
- Has performance problems unresolved by verbal warnings
- Violates more serious standards of conduct
- Has major performance problems
Write a memorandum describing in detail the facts involved in the infraction or performance problem. Also outline the correct behavior that you expect of the employee by a specified time in the future. Finally, detail the consequences the employee will experience if he/she fails to improve.
Have the employee sign the memorandum to show that it has been received, acknowledged, and understood. This does not mean, however, that the employee has necessarily agreed with its contents. Allow the employee to make a written response.
Next, send a signed copy of the written warning (with the employee’s response, if any) to the employee’s personnel file. If the situation does not improve within the specified time, repeat the written warning or take the steps required for probation, suspension, or termination.
Termination
Because state and federal laws have a great impact on terminations, handle termina-tions carefully. If an incident occurs that you believe could be cause for immediate termination, contact the association’s attorney. If the behavior is a repeated offense, the employee’s file must be sufficiently documented to support the termination. Before you discharge an employee, review all documentation with the association’s attorney.
Important Reminders
All incidents of misbehavior, conversations with employees regarding those inci-dents, memorandums, employee responses, and other information pertinent to the misbehavior or performance problems must be documented in the personnel file.
When you document violations or performance problems, be objective and give only the facts. Do not include your personal feelings or opinions about the employee or the incident in either the memorandum or your verbal warnings to the employee.
