8 Steps to An Effective Employee Evaluation

8 Steps to An Effective Employee Evaluation

Ask any business owner or manager—or any employee—at a company, and they’ll likely all agree that annual evaluations are rarely something they look forward to. The good news is, however, that by taking 8 simple steps, reviews can go from something everyone dreads to a regular (and positive) part of the workplace. (More good news is that we also offer a free Quarterly Employee Evaluation Template for download here.)


Step One: Give frequent, constructive, and actionable feedback year-round.

Did you know that a 2018 EY study showed that 63% of today’s Millennial workforce prefer to receive feedback sooner rather than later? And let’s be honest: you probably would too. One of the big complaints about annual reviews is that they’re too often based on old information or what just happened in the days leading up to the evaluation.
Instead, make it a habit to give feedback regularly. Look for opportunities to sincerely praise an employee’s actions and address poor performance immediately. This removes any confusion that the passage of time can cause, encourage continued growth, and ensure that any potentially negative issues are dealt with quickly (before they worsen.)


Step Two: Prepare beforehand.

If you choose to do a formal employee evaluation, we recommend that you do it quarterly as opposed to annually. Regardless of the schedule you follow, however, be sure to absolutely maintain it. It’s always a good idea to prepare for it ahead of time.
Use an evaluation form for consistency among employees; nothing positive comes from randomizing reviews. A quick online search will give you plenty of examples to use in creating a form for you and your team, or you can download our free employee evaluation template.
But having an evaluation form isn’t enough; we recommend sharing it with your employees before their review. That way, they understand the areas on which you’ll be evaluating them and be able to take notes and otherwise prepare for their meeting with you.


Step Three: Set expectations about the evaluation

Before and at the beginning of any employee evaluation, we recommend setting expectations with that team member. For example, is this review a performance review only or will changes in wages or title be discussed? Will you be using this meeting to set goals that they need to research or think about beforehand?
Sharing these kinds of details will ultimately reduce stress on you and your employees and frequently leads to far better conversations and outcomes.

Step Four: Be courteous, but clear

Let’s be honest: we live in an age where saying the wrong thing can lead to some unpleasant consequences legally and otherwise. That’s why you must exercise tact in giving feedback during an evaluation.
Being tactful, however, doesn’t mean being unclear. Quite the opposite. Be straightforward in sharing your feedback, including specific ratings or reasonings. If a particular behavior is impacting performance and results, be precise in stating how and why. This is true whether that employee’s actions are positive or negative.


Step Five: Give Concrete Examples

Any feedback you give during an employee evaluation should include specific examples of behaviors, actions, or outcomes. For example, rather than saying, “You’re great with customers,” say, “The follow-up processes you’ve put in place have raised customer satisfaction rates by 23%.” Or “Your colleagues report that you’re hard to work with,” say “You missed your deadlines three times in the past week, which negatively impacts the ability of your colleagues to meet the next process deadline. That raises a concern about future projects.”
In both of these examples, the feedback is directed at an action or behavior, not at the person.  Everybody in your company—including you—has one or two personality quirks that aren’t easily changeable. But actions and behaviors can be changed or reinforced to lead to better results.


Step Six: Set Specific Goals Together

As a business owner or manager, you have the absolute authority (and responsibility) to set goals for an employee. This is particularly true when it involves a performance improvement plan designed to address behaviors that ultimately may lead to employee termination.
For employees who are doing well, however, including them in goal setting will serve to increase their on-the-job performance. It’s also a chance for you to see an employee’s interests and where they want to take their careers. Consider sharing an objective you have for them (for example, increasing knowledge in one area of your business or doing more community outreach) and then listen to how they suggest achieving that objective. You might be surprised…and even inspired.
Clarity, by the way, is as crucial in goal setting as it is in feedback. We’re advocates of SMART goals: those that are Specific, Measurable, Achievable, Realistic, and Timely. This technique provides a clear focus and objective for your employees.


Step Seven: Follow Up and Re-Evaluate Regularly

In Step One, we recommended frequent, actionable feedback when it comes to employee behaviors. We also encourage you to have ongoing follow up about action items that were part of the review.
Ideally, that would be every week, but if that’s not possible, sit down with each employee at least monthly. Letting too much time go by lessens the impact of the review, meaning that six months or a year from now, you could find yourself and your employee in precisely the same places you were during that evaluation.

Step Eight: Document, Document, Document

Trying to rely on your memory when it comes to employee feedback or evaluations is never a good idea. Instead, when you give feedback, touch base, or conduct a full review, notations should be made in the employee’s file. This is true whether that feedback highlights excellent behavior or if the employee’s actions aren’t in line with your company’s processes or core values. It makes it easier when you need to have critical conversations and implement a performance plan, as well as to demonstrate why an employee deserves a promotion, raise, or bonus.

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