Conducting an employee performance evaluation may seem daunting for managers. But successfully completing these assessments is important because they are crucial tools that can lead to increased work productivity, higher employee morale, and better company outcomes. The following guide is meant to help managers improve both specific skills and general aptitude for conducting formal employee assessments.

The U.S. Office of Personnel Management refers to “performance management” as the practice of involving employees in improving organizational effectiveness and accomplishing the organization’s mission and goals. This process encompasses aspects such as:

• Planning work and setting expectations
• Monitoring performance
• Developing the capacity for workers to perform
• Rating performance periodically
• Rewarding good performance

The first federal legislation relating to performance management came in the 1800s with the passing of the Pendleton Act, a bill created to end the practice of favoritism during the hiring process within the federal government. Many other acts of legislation regarding performance management have passed since then, including ones establishing appraisal systems, one preparing employees for future advancement and those recognizing the connection between superior employee performance and increased compensation.

Two significant performance management milestones came to the business world in the latter half of the 20th century. In 1954, Peter Drucker introduced the theory of “management by objectives,” which emphasized the need for managers to lead their teams to accomplish long-term goals instead of simply handling day-to-day activities, The Economist reports. In 1970, clinical psychologist Aubrey Daniels described the idea of “performance management” as the process of getting employees to do the things they have to do while enjoying doing them. These two theories have proved to be deeply influential in the realm of modern business management.

Benefits of Performance Evaluations

There are numerous benefits to performance evaluations. Some include:

• Providing a formal structure for managers and employees to meet and discuss the employee’s effectiveness.
• Allowing documentation of employee performance over a certain period of time.
• Offering motivation for employees when supported by good merit increases and compensation systems.
• Providing a format for employees to ask questions and give feedback about their own performance and goals.
• Providing a space for both employees and managers to structure their upcoming year.

By offering a useful tool for both parties to assess progress, performance evaluations can help move the company forward.

Tips to Improve the Performance Evaluations You Give

Performance evaluations can often seem intimidating. Managers seeking to improve their skills in this area can do so by practicing some of the following tips.

1. Provide regular feedback, not just scheduled interviews. To be effective, performance evaluations must be consistent. “Consistency” may include behaviors such as giving praise to employees when they perform well, checking how employees are meeting work goals and making changes to problematic performance standards. Regular feedback also allows managers to address issues (such as poor performance) far earlier than formal evaluation periods might allow.
2. Invite the employee to conduct a self-evaluation prior to the meeting. By making the performance evaluation a two-way conversation, managers can involve employees in a more meaningful and fulfilling way. Self-evaluations allow employees to think critically about their own performance. “This is especially important when you want to encourage your employees to set stretch goals,” says human resources expert Susan Heathfield. “Self-reflection on the possibilities can enhance their capability to aim further, higher, and smarter.”
3. Set realistic performance goals. The more reasonable a goal, the more likely an employee is to reach it. When identifying objectives for their staff, managers should adhere to reasonable time frames and keep the capabilities of their workers in mind. This can result in increased work proficiency and morale.
4. Keep a diary. Performance evaluations can be difficult for managers to write because of the six- to a 12-month period between each one, explains Forbes. Keeping a diary about direct reports can help by creating a cumulative account of specific behaviors and accomplishments or other relevant details. If managers have a set of observations from which to pull material, their reviews will likely be more detailed and thus more beneficial.
5. Gather feedback from all parties. Employees rarely work in complete isolation. Checking in with other managers and direct reports about an employee’s work performance before the review can prove beneficial when trying to understand the full picture of how that employee is performing within the company. “This not only ensures that more than one point of view is considered,” says Entrepreneur, “but will also help foster an environment of teamwork and trust.”

Useful Performance Evaluation Phrases

Managers often struggle with written feedback. To encourage employee growth and effective goal-setting, one school district in Minnesota offers the following useful phrases.

To describe:

Positive Attributes

• Works well under pressure
• Is an active listener
• Is highly professional
• Seeks out responsibility and follows through
• Manages time well
• Accepts responsibility willingly
• Is highly conscientious about the quality of work
• Takes criticism well and learns from mistakes
• Goes beyond the call of duty

Performance Improvement

• Has strengthened his/her skills in (area of improvement)
• I am encouraged at (employee’s) level of commitment toward professional growth
• Needs more training in (area)
• Doesn’t listen to directions
• Is demonstrating a higher degree of independence
• Has difficulty prioritizing workload
• Shows a lack of energy and/or interest in the work

Potential

• Has great potential for a leadership role in the future
• Is strong in (skill)
• Has a background in (the skill of expertise) that is being underutilized
• Is considered to be a star talent in this department

These phrases are useful because of their simplicity, tact, and emphasis on both positivity and directness.

Performance Management in the Business Sector

Conducting effective performance evaluations is a key skill for any business manager. The online bachelor’s degree in business management from the University of Findlay enables students to train in all areas of leadership. The program offers four distinct tracks, allowing students to tailor their education to fit their career goals and personal interests.​