Here are some helpful tips to make it easy to protect yourself and the organization through documentation.
Create an email folder for each of your direct reports. Label each with the employee's name.
To document an observation (good or bad), or an event such as an absence or a missed performance expectation, simply write an email describing it. Then send it to yourself. When received, file it in the email folder you made for that employee.
Copy HR or your supervisor if the observation or event is serious.
Write the note and send it as soon after the observation or event as possible. Don't procrastinate!
If you decide that discipline or termination is in order, document your decision when it's made, not after the action takes place. Remember the "Fred" example below?