What is an employee performance evaluation?

An employee performance evaluation is an assessment process that tracks an employee’s work progress throughout the employment period. 

Like performance reviews, employee performance evaluations document the employee’s journey– their accomplishments, setbacks, strengths, and weaknesses– to provide a big picture of the overall work performance. 

Depending on the company, its structure, and the industry, organizations may use different criteria and metrics for their evaluation system. Some organizations may prefer to incorporate the 360-degree review or staff review, while others may rely heavily on self-assessment and manager observation.  

Why should HR leaders care about employee performance evaluation?

Tracking an employee’s journey can be beneficial both to the employer and employee. Employee performance evaluations enable employers to:

• Display transparency in their treatment of employees  
• Assess recruitment practices
• Identify employees’ leadership potential or areas for improvement

Through consistent, two-way feedback, performance evaluations can preserve a healthy employee-employer relationship. For example, these evaluations offer the opportunity for mutual goal-setting, pinpointing issues swept under the rug, and discussing salary or benefit adjustments. In turn, nurturing the employee-employer relationship through frequent communication can support increased retention, engagement, and productivity. 

What can HR leaders do to implement effective employee performance evaluations?

HR professionals can guide managers and employees in participating in employee performance evaluation through these practices:

• Create a plan. HR leaders can outline an implementation checklist that aligns with the company culture and highlights essential aspects of the evaluation system. This plan serves as a roadmap for HR professionals, keeping them goal-oriented through the evaluation process.
• Communicate the purpose. Explaining why the company runs performance evaluations can motivate employees to participate. Knowing that the company carefully designs the evaluation system to garner feedback and improve the employee experience can boost employee engagement. 
• Prepare for the meeting in advance. Managers and employees should ready documents, data, goals, questions, and previous evaluations to ensure they take advantage of the evaluation meeting. HR leaders can provide separate checklist templates for managers and employees to help them prepare and accomplish objectives during the session. 
• Encourage employees to voice their needs. There should be a two-way discussion that involves active listening between the manager and employee. Yes, the employee’s performance is under scrutiny. Yet evaluations also offer a valuable opportunity for employees to express their questions and concerns and set goals.
• Meet Frequently. To avoid surprising the employee with negative feedback, HR leaders can schedule routine employee performance evaluations. Meeting bi-monthly or quarterly rather than annually, for example, can keep employees and managers up to date on critical issues.

How can employee performance evaluations improve company culture?

Employee performance evaluations can contribute to increased job satisfaction and better employer-employee relationships. Offering routine opportunities for staff to communicate effectively can nourish fertile ground for building a positive and healthy company culture.