You KNOW you have to document. But if you don't keep your documentation long enough, you could lose in court. In several recent cases, managers destroyed their documentation before the legal time limit for keeping records. When they were sued for discrimination, the managers testified they had legitimate business reasons for destroying the records early. The court held that the jury should be told to assume that the destroyed records contained information that was favorable to the employee's side of the case.
Different laws require different lengths of time for record keeping.
Applications only have to be kept two years, while medical records must be kept 20 years. If an employee lawsuit is filed, it conceivably could relate to records kept on any employee, no matter how remote. All relevant records must be kept until litigation is complete. Or you can take a more general approach. Of course, laws change, your state's law may differ, and check with your HR Department or legal counsel for definitive advice.