Employee Evaluation Definition

What Is Employee Evaluation

Also referred to as performance review, employee evaluation refers to the periodic assessment of employees by their managers in an attempt to evaluate their progress, performance, measure their growth, praise and reward their achievements and discuss current and future expectations, among many other things.

Employee evaluations typically occur on an annual basis, but some organizations might also conduct them twice a year in order to stay updated on employee performance and progress.

Understanding Employee Evaluation

The main goal or purpose behind employee evaluation is to review every individual’s work duties, their performance over time and how well they have done over the course of time.

Not just that, but these annual evaluations are also often the foundation or basis of bonuses, increments and promotions. Regular and consistent employee evaluations help managers and supervisors understand their employees better, thereby improving communication between both of them.

There are many reasons why employee evaluations are conducted in an organization and why they are important such as:

  • They help measure job performance.
  • They provide employers with tools to assess the quality of an employee’s work.
  • They help determine if a particular employee’s skill set is suitable and appropriate to their job.
  • They highlight employees’ strengths and weaknesses.
  • They help determine if an employee needs training and development.
  • They identify areas of an employee’s work that deserves recognition and appreciation.
  • They provide an opportunity for both employees and employers to plan and discuss future goals and prospects.
  • They let employees know how they can better and improve their performance in the future.
  • They help employees understand what is expected of them so that they can be warier about their future work performance.

Many companies and organizations have a standard evaluation system or framework in place according to which they evaluate their employees. This framework also provides standard metrics that employees can use to review each individual employee.

In order to conduct successful evaluations, employers need to have a proper system in place. There are many things and factors that go into a solid employee evaluation that include the following:

  • developing an employee evaluation form
  • identifying performance measures
  • taking notes on employee performance throughout the given year
  • setting performance standards
  • creating SMART goals
  • setting useful guidelines for feedback
  • outlining expectations in order to pave the way towards improvement
  • encouraging feedback from employees
  • being honest and direct
  • avoiding drawing comparisons between different employees
  • developing appropriate metrics to help measure performance in the following year
  • evaluating employee performance and not their personality
  • having employees fill out a self-evaluation form before the evaluation meeting so that the managers or supervisors can use it for the meeting
  • ensuring a two-way communication where employees can trust their employers and give feedback without hesitation

There are several benefits of employee evaluations, and when done right, they can really make a world of difference in terms of overall employee performance, company culture, goal-setting, goal-accomplishment and overall success of the organization.

Some of the biggest and key benefits of employee evaluations include:

  • It greatly helps improve communication between employees and managers.
  • It enhances job retention and job satisfaction.
  • It improves company culture.
  • It identifies candidates for bonus, promotion and salary increment.
  • It boosts overall profitability and performance.
  • It helps managers identify areas about their business that can be improved and made better.
  • It improves planning for employee development.
  • It establishes trust, loyalty and proper communication between managers and employees.

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