HR Know-How: Evaluating Performance

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Even though evaluating performance on a regular basis can improve productivity and employee morale, many employers do not make this a high priority because it can be time-consuming and is sometimes viewed by managers as having little practical value. Is your business overlooking or outright avoiding this important facet of quality assurance?

Why Should You Conduct a Performance Evaluation?

  • Promote professional and personal growth to increase employee productivity

  • Facilitate better employer-employee communication and develop relationships

  • Hold all employees to the same standard of performance (helps to identify high and low performers)

  • Let your employees know how they are doing and evaluate need for their future success

  • Document incidents of poor performance for future reference

  • Establish valid defenses for employment litigation and legitimate reasons for termination

  • Determine the level of salary increases

Did some of that sound a bit scary? It should! The increasing number of discrimination and wrongful termination lawsuits shows the importance of proper performance documentation as a means of justifying the legitimate business reasons underlying your personnel decisions.

A series of well-documented evaluations that clearly describe an employee’s poor performance provides you with objective evidence of legitimate and nondiscriminatory reasons to support a job transfer, demotion, layoff or termination. Failure to conduct formal evaluations may leave you vulnerable in a discrimination of wrongful discharge lawsuit. Still think evaluations aren’t worth the time investment?

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What to Keep in Mind When Implementing or Improving Your Performance Evaluations


  1. Perform formal evaluations at the same time for everyone each year. While this increases the workload of managers and supervisors during review time, it forces direct comparisons of employees and establishes a nonbiased system.
  2. Have regular meetings with supervisory staff. Supervisors will learn from each other’s experiences. Provide adequate training and insist on candid observations.
  3. Don’t wait until the annual evaluation to provide feedback; offer it throughout the year. Give both positive and negative feedback. A formal evaluation should not be the first time you are discussing an area of concern, in most cases.
  4. Encourage supervisors and managers to offer informal feedback consistently and provide training/mentorship to help them do so in a positive and effective way.


  1. Clearly communicate to employees what their duties are and what is satisfactory performance. Accomplish this through periodic reviews of job descriptions, training, and both formal and informal appraisal.
  2. Tell employees the criteria upon which their performance will be reviewed. Develop standards and establish clear and reasonable goals for employees. Make sure that employees understand the consequences should they fail to improve.


  1. Document poor performance in writing. This can be done in the form of coaching, training, discipline or assessment. Work on improvement with them by creating a written performance improvement plan.
  2. Ask employees to complete a self-assessment in addition to the review completed by the manager. This can identify areas where the employee and manager disagree on performance or expectations.
  3. Give employees the opportunity to review, challenge, and comment on the evaluation.
  4. Meet with employees to discuss all evaluations and expectations. Keep a record of the meeting.
  5. Have employees sign the evaluation. While the employee may not agree with it, it provides evidence that the employee has seen it and has been given a copy. If the employee refuses to sign, the individual giving the evaluation should sign it along with a witness noting that the employee was given a copy.
  6. Set and record goals together (at least on an annually). The goals should reflect the overall corporative objectives.


  1. Establish a review process for evaluations. This will keep supervisors honest and ensure that supervisory staff is performing reviews consistently. It is also a good practice to include completion of performance reviews as a part of a supervisor’s annual review.
  2. Follow established procedures strictly. Apply all procedures and standards equally to all employees.
  3. Use other supervisory personnel in the process, if possible, to mitigate claims of personality conflict. This will enhance credibility if all evaluations point to the same conclusion.
  4. Managers should be held responsible for helping subordinates develop and improve.
  5. Identify any common areas of poor performance, and update your recruiting strategy, onboarding process or ongoing training where necessary.


  1. Make sure employees understand the consequences for failure to perform at an acceptable level. There should be no surprises in employee supervision and evaluation.
  2. Give employees time to improve and offer resources and assistance if appropriate.
  3. Maintain confidentiality in employee performance evaluations.

Make sure that your Employee Handbook effectively describes your company’s vision and procedure for conducting evaluations both formally and informally. We’ve provided a sample policy below that can serve as a good baseline.

Sample Performance Evaluation Policy

“Our company is committed to providing you with feedback, both formal and informal, about your performance on the job. Managers and supervisors are responsible for providing ongoing, regular performance feedback to each employee. In addition, your manager or supervisor may formally discuss and document your performance on a regular basis (generally annually). In some business units, an initial performance review may be conducted within three to six months after an employee is hired or transfers to a new position.

Your performance evaluation discussion will review your strengths and identify any areas needing improvement, and goals and objectives that need to be achieved. Specific performance problems may be addressed outside the performance appraisal cycle through either informal discussions or formal disciplinary action. Formal performance feedback becomes a permanent part of your personnel file.

Please contact Human Resources if you feel that an evaluation is due to you or would be helpful to you.”

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Souce: Jason Clarke

Too stiff? Get detailed about how different types of performance evaluations are handled. Do you utilize surveys, peer review, group discussions, self-evaluation? Explain a bit more how these process work, when to expect them, who will execute, and what benefits both the company and the employee can gain.

A good example is Valve’s Handbook for New Employees, which discuss their specific processes: peer review and stack ranking, used for determining compensation. This handbook sounds more like a conversation than legalese, winning! The details and visual story-telling also help employees feel more comfortable and positive about a generally stress-inducing situation.

We hope this overview will help you get in the habit or improve your performance evaluations. The investment in a consistent and effective evaluation can have a great influence on productivity and your company culture.

Ready to have better performance evaluations? Download our free list of Topics for Successful & Meaningful Performance Evaluations. These 17 topics and corresponding questions are a great way to ensure you are reviewing employees thoroughly and equally. For more help with Simplifying HR, contact us today!

Valve Handbook for New Employees
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Amanda Coe
Marketing Specialist