It’s among the things managers dread most: terminating an employee when things are not working out. While you may have thought you clearly articulated the reasons for the termination, you could still be setting up your company for a lawsuit.

According to CNA Insurance, employment disputes are at the core of nearly 75 percent of all litigation filed against companies — moreso than general liability or property loss. And, of those lawsuits, 40 percent are filed against employers with 100 or less employees.

While there’s no guarantee that you can avoid facing a lawsuit by a disgruntled employee, you can take steps to ensure that your employee evaluations are designed to motivate improved performance, as well as clearly outline when standards are not being met.

Performance evaluations, when documented in writing, can serve as “ the association’s best ally or its worst enemy, depending on how effective and accurate those evaluations are,” the Center for Association Leadership said in a white paper.

Here are a few tips to keep in mind to help your company conduct effective evaluations:

Clearly set expectations. Long before the evaluation process begins, each employee should have a clear idea of what is expected of her — whether in the form of a written job description or a summary of expectations. This enables the employee to have a fair chance of meeting expectations.

Critique using examples. Work schedules can be extremely demanding on a day-to-day basis. Adding evaluations that are thoughtful and insightful to the mix can be challenging for even the best managers. As a result, you run the risk of managers providing feedback without concrete examples. Without specific instances, an employee could be tempted to assume that his manager is making stuff up. Not only could this lead to an employee not having the tools to improve, but feeling resentment in the event of a termination.

Train the evaluators. Using a HR professional to assist in training, discuss what type of topics and feedback can land your company in hot water. For instance, while it may seem obvious, a manager should never bring personality traits or clothing preferences into question during an employee evaluation. Nor should an employee’s personal life be questioned to evaluate performance. Stick to discussing the requirements of the job when conducting evaluations.

Have employees to sign off on evaluations. According to the Center for Association Leadership, each employee should be required to sign off on their evaluations after they have been given the opportunity to respond to the evaluator’s assessment. They should be given the opportunity to write out why he or she agrees or disagree. By signing and dating the document, this ensures the beginning of a statute of limitations for filing complaints. It also protects the company in the event that the employee later challenges an evaluation that he previously signed.

Employee evaluations, when done right, can give your employees the tools they need to succeed — or protecting the company in the event of a lawsuit.