How to Conduct Performance Evaluations (With Definition)

By Indeed Editorial Team

Published 14 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Performance evaluations are important for measuring an employee's progress and for providing feedback. They usually include setting objectives and measuring progress towards those objectives. Knowing how to conduct a performance evaluation can help you provide useful and constructive feedback to employees. In this article, we define what a performance evaluation is and explain how to conduct such an evaluation in eight steps.

What are performance evaluations?

Performance evaluations are a way to provide employees with feedback on their job performance. They also help identify areas where employees need improvement. During a performance evaluation, an employer usually discusses the employee's strengths and weaknesses to help set goals or expectations for the future and to help improve the employee's job performance.

You can conduct these evaluations in a number of ways, but they frequently happen through one-on-one meetings between the employer and employee. They can occur annually, semi-annually or quarterly, depending on the company's preference. These meetings give the employer an opportunity to provide feedback and the employee an opportunity to ask questions and get clarity on areas of improvement. These evaluations therefore encourage open communication between employer and employee.

Related: Top 47 Performance Review Phrases By Skills (With Examples)

How to conduct a performance evaluation

If you want to know how to conduct performance evaluations, you can review these steps:

1. Create a standard evaluation framework

It's crucial that the evaluations you conduct are objective, fair and consistent. This means having a set structure or framework in place that you follow for every employee. Doing this can ensure that you're covering all the key areas you want to address and that you're treating every employee the same. This is important because it shows that you're committed to providing employees with feedback that's based on their actual performance rather than on personal biases.

To create a standard evaluation form, you can start by listing the key areas you want to address. These can include items such as job knowledge, quality of work, attendance, customer service and teamwork. Once you have a list of topics, you can create a rating scale for each one. This can help ensure that you're providing employees with specific and actionable feedback.

Related: What Is an Evaluation Form? (With Explanation and Examples)

2. Schedule regular evaluations

It's important to schedule performance evaluations on a regular basis so that employees know when to expect them. This can help ensure that they prepare for the meeting and that they have the opportunity to address any areas of concern before the evaluation takes place. It's also important to give employees enough notice before the evaluation so that they have time to reflect on their performance.

Having regular evaluations is beneficial because it means employees consistently receive feedback on their work. This can help them identify areas of improvement and work towards their goals and expectations. It also allows employers to keep track of an employee's progress over time. This can be helpful when making decisions about promotions or salary increases. If an employee's performance deteriorates, regular evaluations can help identify this early on.

Related: How to Assess Yourself (With Self-Evaluation Examples)

3. Create set guidelines for feedback

The main aspect of a performance evaluation centres around the feedback, so it's important that set guidelines exist for giving and receiving feedback. This involves knowing what kind of feedback you want to give, how you want to communicate it and how to receive feedback from the employee. Some things to consider when giving feedback include:

  • Giving specific and actionable feedback: Give feedback that's specific and focuses on behaviours or actions that the employee can change. This kind of feedback is more useful because it allows the employee to know exactly what they need to work on.

  • Preventing personal biases: Offer feedback on the basis of an objective assessment of the employee's performance, such as their attendance record or the quality of their work. This can help ensure that the feedback is fair and free from personal biases, thereby encouraging the employee's motivation.

  • Giving balanced feedback: When offering feedback, focus on both the employee's strengths and weaknesses to provide a well-rounded assessment. This can help ensure that the employee feels supported and encouraged to improve in areas of development and take on new challenges.

  • Encouraging feedback: Besides giving feedback, encourage the employee to provide feedback on your performance as well. This can help create a more open and collaborative environment where both parties feel comfortable exchanging ideas and suggestions.

Related: 8 Positive Feedback Examples for Employee Performance

4. Prepare for the meeting

Once you schedule the performance evaluation, it's time to prepare for it. This means gathering all the relevant information and documentation. This can include things like the employee's job description, performance goals, attendance records and any feedback you collected from others. It's important to have this information ready so that you can refer to it during the meeting.

This is also a good time to think about the areas you want to address and the specific examples you want to use. This can help you have a productive and constructive conversation with the other person. It's also important to give them time to prepare for the meeting by letting them know what you want to discuss. This gives them the opportunity to think about it and gather information.

Related: 8 Performance Review Questions (Plus Sample Answers)

5. Be clear about your expectations

It's important that you outline clear, concise expectations regarding where the person can improve. This can help ensure that the discussion is constructive and productive. When communicating your expectations, use specific examples rather than general statements.

For example, rather than telling the person you want them to be more punctual, state that you noticed they were late for work five times last month and that you want them to be on time every day. By doing this, you can help them understand what they can work on and exactly how they can improve.

6. Create positive incentives

An important part of a performance evaluation is setting goals for the future. This can help ensure that the person remains motivated and focused on improving their performance. When setting goals, make sure they're specific, attainable and realistic. You can also create positive incentives for meeting these goals. For example, you can offer a cash gift or additional vacation days. This can help show them your commitment to supporting their development. This is especially a viable option if the company bases its pay increases on merit.

If you plan to review salaries during these evaluations, it's important that you remember to inform the employees of this both verbally and in writing when they first join the company. This keeps their expectations realistic and prevents disappointment. You may also want to consider creating development plans for those who have difficulty meeting performance standards. These can help identify the specific areas where someone needs improvement and outline a plan for how they can achieve these goals.

7. Follow up after the meeting

Once the performance evaluation is over, it's important to follow up with the individual. This can help ensure that they understand your feedback and know what actions they need to take. You can follow up with the employee through a variety of methods, such as sending them an email or having a meeting.

Try to provide feedback regularly outside the official evaluations. This can help ensure that employees receive timely feedback that can help them improve their performance. If you have concerns about someone's performance, it's important to address them as soon as possible. By doing so, you can help prevent the problem from getting worse and work with the employee to find a solution.

8. Enforce disciplinary procedures

It's crucial to have disciplinary and termination procedures that you enforce consistently. This can help ensure that employees are accountable for their performance and that they understand the consequences of not meeting your expectations.

If you want to discipline an employee, make sure you document the issue and follow the steps outlined in your disciplinary procedures. Before doing so, it's important that everyone in the company knows what the procedure is. For example, the disciplinary procedure can involve:

  • Verbal warning: Privately speak to the employee about their poor performance and explain what you expect of them, giving specific reasons for why their performance is unacceptable. Give the employee a chance to respond, but make it clear that the discussion isn't up for debate.

  • Written warning: If the employee doesn't change their behaviour after the verbal warning, you can then issue a written warning that includes the specific issues with the employee's performance, details what you expect of them and lists the consequences of not meeting your expectations. Ask the employee to sign the warning to acknowledge that they received it and give a copy to the human resources department.

  • Final warning: If the employee fails to improve after receiving the written warning, you can issue a final written warning as the last step before termination. Include the specific issues with their performance and your expectations of them, perhaps also inviting them to a meeting with you and a human resources representative to discuss the severity of the situation.

  • Termination: If the employee doesn't improve their performance after the final warning, you can then terminate their employment. Make sure you follow the steps outlined in the company's termination procedure and document the reasons for the termination.

Related: How To Write an Employee Warning Letter (With Examples)

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