Evaluate Employee Performance | 5 mins read

How to Evaluate Employee Performance

how to evaluate employee performance
Lauren Christiansen

By Lauren Christiansen

Constructive feedback lets an employee know how he/she is performing and whether there is room for improvement. It serves as a good motivator for those who want to receive a pay raise, promotion, or just feel secure in their job.

Many organizations incorporate a combination of regular feedback and annual performance evaluations to inform employees if expectations were met, where improvement can be made, and discuss what was executed well. This can be utilized to help the employee improve his/her performance in the future.

Though there is no one right way to do an evaluation, there are some key guidelines that can help. Read ahead to learn what to include in a performance evaluation, along with some best practices for conducting one.

What is a Performance Evaluation?

A performance evaluation is an assessment of an employee's performance, typically given on an annual basis. Throughout the year, constructive feedback is usually given to make sure he/she is prepared for the final review.

Evaluations utilize different metrics to measure performance that vary based on the industry and job description. The results of the evaluation can help determine pay raises, bonuses, promotions, layoffs, or firings.

Sometimes the evaluation process includes a self-evaluation section where the employee assesses his/her conduct, accomplishments, and shortcomings. Performance evaluations should be measured by how effectively the employee meets his/her specific goals. These objectives should have been discussed with the employee when he/she first started working there.

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What is the Purpose of an Annual Employee Performance Evaluation?

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Employees can recognize their successes and shortcomings and use that information to continue to meet key objectives. They can also utilize satisfactory reviews to justify asking for a raise.

Employers can learn more about how various work processes affect an employee and utilize that information to improve the organization's culture or operational efficiency. To summarize, the main purposes include-

  • Helps the employee know what is expected of him/her
  • Informs employers of the employee's strengths and weaknesses
  • Helps improve an employee's performance in the future
  • Gives an objective review based on pre-determined standards and metrics, which can be used as justification for promotions, layoffs, or bonuses
  • Regular feedback in between annual reviews convey the quality of an employee's work performance and prevents blind sighting the employee with an unsatisfactory annual review.

How to Evaluate Your Employee's Performance

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Some of the most important guidelines to follow when evaluating an employee's performance are-

1. Set Standards
It's important to set clear standards to evaluate an individual's performance and maintain those same standards for every other employee who holds the same position.
All standards should be achievable and they should all relate to the job description that was given to the employee when he/she first started.

An example of a review may include the following elements. A rating scale of 1-10 may be included to demonstrate how effectively the worker has met each objective.

  • Quality of Work Is work complete, accurate, and in an acceptable format?
  • Quantity of Work How much work is completed? Is the employee usually ahead or behind schedule?
  • Individual Effectiveness Can the employee easily cooperate with others to achieve key objectives?
  • Communication Does the employee express ideas clearly and consistently to others?
  • Service Focus How well does the employee interact with customers?
  • Decision-Making Does the employee utilize all materials at his/her disposal to make sound judgment calls and decisions?
  • Job Knowledge Does the employee have a clear grasp on what his/her job description is? Does he/she comprehend the techniques, skills, and methodologies required as part of the position?
  • Initiative Does the employee take initiative to solve problems and follow through with a task? Is he/she a self-starter?
2. Set Goals & Encourage Employee Development
Performance metrics should be the same for all employees within their respective departments, but each individual should have a unique set of goals.

Every worker has different strengths, weaknesses, and capabilities which determine the types of goals that should be set for him/her. Let company employees know which goals they can strive to meet. These should be realistic and relevant to the position.

3. Take Both Positive & Negative Notes
Monitor performance throughout the year and jot down any positive feedback or constructive criticism.

Try to utilize that information to give regular feedback that can help prepare the employee for their annual evaluation.

4. Be Honest & Specific with Criticism
If a manager likes an employee on a personal level, it may be difficult to offer them constructive criticism. This is not helpful for the employee because it creates confusion about how well they are performing.

Give clear examples of situations that went wrong or were handled poorly. Then, give helpful, clear direction on how to improve in the future.

5. Evaluate Performance, Not Personality
Remember that this is not a personality contest or review based on how much they are liked in the office. Don't focus on elements of their personality that are disruptive, such as obnoxious joking or excessive talking. Instead, use the review to focus on specific actions that they took which disrupted the workday. For example-

Wrong Way- Your personality comes off as immature and annoying to others in the workplace.

Right Way- I know you didn't mean to upset anyone, but the joke you told was offensive to a client. A sales team member had to call and apologize to mitigate the situation. Please refrain from using crude language around clients in the future.

6. Ask Employees Specific Questions
Include some questions to receive feedback that can help better understand the employee's perspective on the company's culture. It can also help employers know any lacking elements or inefficiencies that prevent the employee from completing tasks. Some sample questions may be-
  • What do you hope to achieve this next year?
  • What resources do you need to achieve your goals?
  • What are some challenges to meet these goals?
  • Is there anything that the organization can change to help you do your job more effectively
  • What are your long-term career goals?
  • What skills are you hoping to develop this year?
7. Reward Employees Appropriately
If an employee has done an exceptional job and has met key objectives, they should be rewarded. A financial reward or promotion is beneficial towards keeping up morale and motivating employees to continue meeting their goals.

Make sure that the employee is aware of incentives, promotions, and raises and what they have to do to receive them.

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