How to Give an Effective Performance Evaluation

Performance evaluations can be tough to give. But, they provide a powerful opportunity to boost productivity, improve teamwork, and guide employees toward personal and professional growth. 

You’ve landed on the right article if you want to turn this often-dreaded event into a meaningful exercise. Stick around as we unpack proven strategies, pitfalls to avoid, and methods that will help you maximize the benefits of your next performance evaluation.

What is a Performance Evaluation?

A performance evaluation is a comprehensive, structured process, often led by a manager or human resources, to assess an employee’s work, behavior, and outcomes based on specific criteria.

Typically conducted annually, this is the “big picture” look at an employee’s contributions. However, some progressive companies are moving toward semi-annual or quarterly evaluations to keep the feedback loop tight.

It’s essentially a long conversation involving multiple people assessing how an employee is doing quantifiably. A typical performance evaluation uses this format:

• Review of goals
• Review of challenges
• Plans for future goals
• Questions

How to Prepare for a Performance Evaluation as a Manager

You only have so much time in each performance evaluation, so you can only discuss some things. Let’s talk about how you can handpick the meeting agenda items that offer a balanced and meaningful picture of an employee’s contributions.

Start with measurable metrics

Start with the tasks that can be quantified. Whether it’s the number of projects completed on time, customer satisfaction scores, or leads converted, these hard numbers offer an objective basis for your assessment.

You should still dip into the “performance review” space of talking about how things feel and how the employee contributes non-quantifiably (how they help with team morale or show leadership potential, for example). However, the numbers will help clarify if the employee’s output meets their baseline performance standards.

Action Step: Clarify beforehand all of the measurable metrics related to the employee’s role that you want to discuss. Get clear on what the threshold of “success” for each metric is.

Evaluate skills, not just numbers

Don’t lose sight of the skills and attributes that make an employee great. Pro-activity, resourcefulness, and communication are also vital to team success, so find ways to evaluate these softer skills.

Action Step: One way to gauge these harder-to-measure skills is to have your employees list several qualities they aspire to display at work. Some examples might be: 

• Dependability
• Taking initiative
• Team morale booster

Then, at your performance evaluation, have them self-assess how they’ve done on these qualities. You can also give feedback on how you feel they’ve exhibited these qualities. And you can even elicit peer feedback before the meeting,

Make sure to update their aspirational qualities every quarter or year so that they still feel inspired by their list.

Sync with company goals

Another place to focus your evaluation is where their role meets company goals. 

If this quarter focuses on customer retention, then customer engagement and satisfaction tasks should carry more weight in your evaluation.

Action Step: Consider how the current OKRs align with this employee’s role and duties. How much of their role is geared toward the OKRs, and how are they doing in those areas?

Remember to address both periodic tasks and milestone accomplishments

Regular, recurring tasks show how reliable and consistent an employee is. 

But don’t ignore those big milestones—the successful product launches or completed campaigns. These demonstrate an employee’s aptitude for managing larger responsibilities.

Action Step: Address how the employee is doing with their day-to-day and bigger projects.

How to Prepare for a Performance Evaluation as an Employee

Going into a performance review as an employee can feel scary. But if you prepare beforehand, you can make the conversation smoother and come off as more prepared.

Get your metrics ready

Before stepping into your performance evaluation, arm yourself with data. 

These metrics are not just numbers; they’re the story of your hard work, dedication, and progress. They provide a clear, objective backdrop to your performance, making your achievements quantifiable and your contributions tangible. 

Action Step: Gather all relevant data and statistics that reflect your performance. This could include sales numbers, project completion rates, customer satisfaction scores, or other relevant metrics. Organize them concisely in a chart or a brief report to make them easy to discuss during your evaluation.

Think of what skills you’re bringing to the table.

Reflect on the unique blend of skills you bring to your role. Whether it’s your knack for problem-solving, exceptional communication skills, or ability to lead a team under pressure, acknowledging these skills helps you articulate your unique value in the performance evaluation.

Action Step: List your key skills and how they have positively impacted your work. Think of specific instances where your skills made a difference – a problem you solved, a project you led successfully, or a challenging situation you navigated easily. Be ready to share these examples during your evaluation.

Sit with the company goals

When you can align your efforts with the company goals, you come off as a team player, and it shows that you’re not just working in the company, but you’re working for the company’s vision. 

Action Step: Review the company’s goals and objectives for the quarter. Identify how your work directly contributes to these goals. Prepare to discuss specific examples of how your performance aligns with the company’s direction, and be ready to suggest ways you can further support these objectives in the future.

List out accomplishments (big and little)

Every accomplishment counts, whether a game-changing project or your daily task. Think of this as your professional highlight reel. This comprehensive view often provides a more accurate picture of your value to the team.

Action Step: Create a comprehensive list of accomplishments over the evaluation period. Include both major projects and smaller tasks or improvements. Be specific about how each accomplishment contributed to the team or company, and be prepared to discuss them during your evaluation.

Tips to Conduct an Excellent Performance Evaluation

Your employee’s relationship with you has a profound impact on both their job satisfaction and even their life satisfaction, as seen by the data below: 

Source

How you show up as a manager impacts your employees’ well-being, so you have a responsibility to hold! With this in mind, you can look at this performance evaluation as an opportunity to accurately assess how your team is doing and encourage them to do their best work.

Here are a few tips to keep in mind to make sure your evaluations are clarifying, valuable, and encouraging.

Consider your employee’s career ambitions

If you work as a manager or in HR, part of your role is to make sure all the gears are turning smoothly. But you also have a leadership opportunity to empower your team into the best versions of themselves.

If you open a dialogue about what they want for their careers and how you can support them, you’ll inspire their work because they’ll see how today’s grind sets them up for tomorrow’s glory. Plus, you’re creating a climate where ambition is recognized and nurtured.

This is also a good time to discuss possible bonuses or any relevant promotion paths and what it will take to get to the next level.

Action Step:

During your evaluation, make sure to ask questions like:

• What’s your dream role here in the next couple of years?
• What skills do you want to level up?
• What would you make it look like if you had a magic wand, you could wave at your career?

You’re not just clocking in as a manager; you’re showing up as a mentor.

Help them set goals

By bringing goal-setting into the picture, you map a successful road ahead for your employees. This can empower your team members and keep them on track.

Plus, when measurable goals are in place, you are setting up an honest, straightforward way to gauge how things are going later.

When helping set goals, consider making them:

• Specific
• Measurable
• Achievable
• Relevant, and 
• Time-bound

Action Step:

Allocate a segment of your review meeting to collaborate on SMART goals for the upcoming quarter or year. Pose questions like:

• Which projects get you excited?
• What skills are you looking to master?

Once you agree, scribble them down and lock in some check-in dates. These periodic reviews keep the energy high and make room for course corrections, helping you switch from just evaluating to genuinely empowering your team.

If you’d like extra insight on how to set goals using science, you might enjoy this freebie:

Be transparent about evaluation criteria

Share how the evaluation will be conducted and the criteria used from the get-go. It can be beneficial to share this information before the meeting so employees can brace themselves.

Transparency minimizes anxiety and leaves less room for surprises, making the evaluation process more straightforward for everyone involved.

Make the conversation a two-way street

A performance evaluation shouldn’t just be a manager monologuing at an employee; it should be a back-and-forth. 

This can offer you additional insights and allow employees to voice their opinions, concerns, or aspirations.

Action Step: Before the evaluation meeting, let the employee know that you’d like to hear their thoughts on their performance and any goals or obstacles they see. Create a designated time in the evaluation agenda for this open dialogue.

Zoom in on core duties

It’s always good to circle back to the employee’s job description. These are the bread-and-butter tasks, the ones they were hired to do. 

Action Step: Before the performance evaluation meeting, print out a list of all the employee’s official core duties and be prepared to go through each point with them.

Highlight the positive

A group of researchers^{1https://trace.tennessee.edu/utk_gradthes/5046/} compared groups of athletes with unconditionally positive coaches to a group of athletes with coaches who were critical. The study found that athletes with positive coaches reported more confidence and enjoyment in their sport. On the other hand, necessary attitudes from coaches led to lower confidence and even burnout in athletes.

The same is true of work. The more encouraging and empowering you are to your employees, the more they’ll feel energized, confident, and excited about work. 37% of employees^{2https://www.greatplacetowork.com/resources/blog/creating-a-culture-of-recognition} said receiving more personal recognition would inspire them to do better work more often.

When giving a performance evaluation, it’s easy to fall into the trap of only focusing on what needs improvement. But, acknowledging what an employee is doing right is crucial for morale and motivation.

Action Step: Start your evaluation with a “wins” section. Celebrate the specific things the employee has done exceptionally well before diving into areas for improvement.

Seek extra evaluators if needed

If the employee’s role involves specialized skills, consider including a subject-matter expert as an evaluator. This person can offer nuanced insights that a generalist manager might overlook.

Also, consider involving other team members, departments, or clients with a stake in the employee’s performance when relevant. Their input can be invaluable, and it ensures that multiple perspectives validate your expectations. 

Keep a record

Documenting the process and the performance evaluation results is essential for future evaluations and tracking progress over time.

This way, you can look at progress across quarters and years.

Action Step: After the evaluation, summarize the key points discussed, the goals set, and the action items identified. Share this document with the employee and file it appropriately for future reference.

Try 360-Degree Feedback

In the 360-degree feedback approach, evaluations come from all directions, not just top-down, from the manager. 

Team members, subordinates, and sometimes even clients weigh in. 

And, perhaps most importantly, the employee assesses themself. Providing clear questions for them to take an honest look at their output can prevent an employee’s self-evaluation from looking like this:

If you take a 360 approach, you can set up meetings with the relevant people a few weeks before the evaluation. Or you can send out anonymous feedback forms to help others quantify the impact of the employee.

The one drawback to remember, especially in a competitive workplace, is that peer ratings may skew negative for a performance evaluation (over a development meeting).

Action Step: Set up an anonymous performance evaluation form to send to your employees’ colleagues, subordinates, and clients to gather numerical ratings and qualitative reflections on their performance.

The Most Common Challenges of Performance Evaluations and How to Overcome Them

Navigating the intricacies of performance evaluations can take time and effort. However, once you understand the most common challenges, you can quickly overcome them, leading to the best possible evaluation meetings.

Navigating your biases

We’re all human, which means we all have biases. When we aren’t aware of our biases, they can cloud the best of judgments. 

To overcome your biases, the first thing you can do is become familiar with them.

Here are some common biases to watch out for:

• Confirmation bias^{3https://www.britannica.com/science/confirmation-bias} happens when a manager only notices the traits or actions confirming their opinions about an employee. So, if you go into the evaluation already thinking an employee is lazy, you’ll tend to seek out and interpret information that reinforces your view.
• Recency bias^{4https://www.oxfordreference.com/display/10.1093/oi/authority.20110803100407676} tends to focus more on the employee’s most recent actions rather than considering their performance over an extended period. This can lead to evaluations that need to reflect the overall scope of an employee’s contributions or improvements.
• The halo effect^{5https://www.britannica.com/science/halo-effect} is when a manager is so impressed by one aspect of an employee that they let it disproportionately influence the overall evaluation. If you have a charismatic employee whose jokes you love, you might unwittingly view them as more organized, efficient, and effective than they are.
• On the other hand, the horn effect is when a manager fixates on a single negative trait or action and lets it cloud their overall judgment of an employee. For example, an employee cut you in the bathroom line once, which left a sour taste in your mouth. This feeling could easily cloud your view of their strengths and contributions if you’re careless.
• Similarity or affinity bias^{6https://www.masterclass.com/articles/affinity-bias} happens when a manager gives a higher evaluation to an employee because they see aspects of themselves in the person. This could lead you to overlook areas where the employee needs to improve because you share the same alma mater, and both used to paint your face purple and gold every Saturday.

Solutions:

• Before your evaluation meeting, study the list above and reflect on how each bias might be at play.
• Bring in feedback from others or other evaluators to balance out your view.
• Stick to quantifiable metrics as much as possible to minimize subjective judgments.

Avoiding the temptation to inflate ratings

It’s tempting to slip into the “everyone gets an A!” approach. While it feels good to be everyone’s favorite boss in the short term, it doesn’t help identify areas for real improvement, making it a disservice to everyone in the long run.

To resist the urge to give everyone high marks, create a standardized scoring system that objectively assesses each key performance indicator. 

Solution: While feelings can be part of your review, make sure there is a quantifiable scoring system. For soft skills, you could consider questions like, “On a scale of 1-10, how dependable is this employee?”

Addressing underperforming employees

Managing underperforming employees is one of the tougher parts of your job. It can be hard to say something that might bruise someone’s ego or shake their confidence. And when that happens, you have to be prepared for some resistance. 

But it’s important for you to be as honest as possible and to avoid sugar coating. And there are ways to state your employee feedback that are more likely to uplift rather than deflate.

Solutions: 

• Frame your feedback in an empowering way. This study suggests^{7https://www.apa.org/pubs/journals/releases/xge-a0033906.pdf} that the most effective constructive feedback will be something like: “I see what you’re capable of and want to help you get there” or “I’m giving you this feedback because I have high standards for you that I know you can reach.”
• Create a follow-up plan. Don’t just point out the issues—chart a course for improvement with deadlines and regular check-ins.
• Consider role alignment. Sometimes, underperformance stems from a misalignment of skills and tasks. It may be worth exploring if the employee is better suited for a different role.

Different Evaluation Frequencies

For many companies, an employee performance evaluation is annual. But there are other approaches to ensure employees aren’t shooting in the dark for most of the year.

Consider more regular employee evaluations. 

Employees in companies who have a continuous performance feedback process tend to outperform their competition at a 24% higher rate^{8https://www.betterworks.com/magazine/performance-management-survey/#:~:text=Overwhelmingly%2C%20respondents%20in%20organizations%20who,at%20a%2024%25%20higher%20rate.}. 

On top of that, HR teams of such companies are nearly 50% more satisfied^{8https://www.betterworks.com/magazine/performance-management-survey/#:~:text=Overwhelmingly%2C%20respondents%20in%20organizations%20who,at%20a%2024%25%20higher%20rate.} with their performance management process. They are 24% more likely to recommend their evaluation process to others than annual review companies.

Here are a few options to consider.

Continual, on-the-fly feedback

This approach sidesteps the formal structure of scheduled employee performance reviews, opting for ongoing, informal feedback. This is often seen in smaller operations or startups with more dynamic environments.

The plus side of this approach is that it allows for real-time adjustments and improvements. Plus, it removes the anxiety and formality associated with traditional performance reviews.

On the flip side, the absence of formal reviews could lead to a lack of clarity around performance expectations. Important feedback could be missed or forgotten without scheduled checkpoints.

Employee pulse evaluations

Think of pulse reviews as a Goldilocks solution—somewhere between annual reviews’ formality and continual feedback informality. These are quicker, less intensive reviews that occur more frequently on a monthly or quarterly schedule.

This frequency allows for timely course corrections and is more manageable than the comprehensive annual review. 

But beware, because monthly reviews could become routine and lose impact if they aren’t executed thoughtfully.

How Is a Performance Evaluation Different from a Performance Review or a Performance Improvement Plan?

The world of performance management can sometimes feel like a bowl of alphabet soup. Different terms often get used interchangeably, but they have unique flavors.

A performance review is often considered a subset of a performance evaluation. A performance review is typically more about dialogue and less formal than a full-blown evaluation. An appraisal is more of a “let’s talk about how it’s been going,” and an assessment is “let’s look at your output to see if it’s matching expectations.”

Performance reviews often coincide with formal evaluations but can also happen more frequently. 

A performance improvement plan (PIP) is a formal document that outlines specific areas where employees need to improve their performance. They are usually only used when an employee is on the cusp of termination. PIPs set out clear objectives and timelines for improvement.

Frequently Asked Questions About Performance Evaluations

Takeaways on Conducting a Performance Evaluation

Conducting performance evaluations can feel daunting. Where to start, and what to cover? Just remember to bring these topics into the conversation, and you’ll be in good shape:

• Core duties. What is on their job description?
• Measurable metrics. How are they doing on quantifiable metrics?
• Skills, not just numbers. Address their soft skills as well. Even if you do numerically rate them.
• Company goals. Put focus on the parts of their performance that relate to OKRs.
• Periodic tasks and milestones. Remember to address both their daily responsibilities as well as their big projects.

Best of luck with these performance evaluations! 

Also, if you’d like to boost your overall leadership skills, you might enjoy this article.