Understanding Performance Evaluations

Last Updated April 18, 2022

Performance evaluations can be viewed as one of the more uncomfortable and contentious interactions between supervisors and employees. But when managed professionally, openly, and honestly, evaluations can help enhance working relationships and performance, with both parties benefiting.

What is a Performance Evaluation?

The performance evaluation is a review based upon an individual’s job performance and assigned duties. A supervisor typically looks at an employee’s skills and accomplishments during a specific time period and tracks whether the employee has lived up to expectations, exceeded them, or failed to meet desired results.

Ideally, performance evaluations provide a stepping-stone for the employee and supervisor to identify and discuss areas where performance can be improved. It can also be an important opportunity for employee and manager expectations to be reinforced or clarified.

Performance Evaluation Benefits

Evaluations are often seen as documentation of past performance. Some businesses are even using them as a vehicle for reviewing employee development. Completed properly, they can lead to an improved understanding of personal and professional goals. This approach can also help ensure employees are recognized for their work and are being provided the right training opportunities to acquire further skills, which can be beneficial for both the employee and the business.

Review processes can come in all varieties, with direct supervisors or upper-level managers involved. Sometimes, other co-workers can be added to the process, and they can give management a peer-review of the employee. Overall, the review process can be broken down into four different methods.

• Top-down Review: This approach puts the direct supervisor in charge of the process, although business unit managers or executives can also be involved. The direct supervisor’s involvement is important given their working relationship with employees, often making him or her more knowledgeable on assessments and feedback.
• Peer Review: In this case, employees are evaluated by other co-workers. The benefit of this type of review is that co-workers at the same level as the employee may understand the job, its challenges, and how it’s being performed on a day-to-day basis better than higher-level management. However, there may be a risk with this type of method, as work rivalries and jealousy can cause some co-workers to review others more critically, particularly if they are in competition for a raise or promotion.
• The 360-Degree Review: This process solicits reviews from all perspectives – superiors, peers, subordinates, and sometimes even customers. Typically overseen by the HR department, these reviews are often done anonymously. The risk with the 360-degree review is that anonymous input can lead to excessive negative criticism and be counterproductive for the employee.
• Self-Assessment: Allowing employees to assess their own performance can also be a beneficial review method. Not only can this provide a clue to managers as to some areas where employees feel they can improve and expand, but it may make it easier for employees to accept constructive criticism from managers. However, if employees and managers diverge substantially in their performance reviews and perspectives, this process can present challenges.

In general, a formal, annual review process is effective if it’s part of a culture of open communication and regular positive feedback with employees. In fact, some companies conduct them monthly to help establish and communicate employee and manager expectations on a monthly cycle. Monthly reviews may help drive the importance of performance and send a clear message for meeting and exceeding expectations.