Our mission

Indeed’s Employer Resource Library helps businesses grow and manage their workforce. With over 15,000 articles in 6 languages, we offer tactical advice, how-tos and best practices to help businesses hire and retain great employees.

Read our editorial guidelines

8 min read

Employee evaluations are a challenging yet essential practice that can help employers and their employees align on shared goals, review past challenges, celebrate accomplishments and set forth a plan for future improvements. Traditionally, organizations relied on annual performance reviews, but there is also a shift towards more continuous feedback to better support employee growth and engagement. A well-conducted employee review can help employees thrive in their careers and enable employers to obtain better quality work from their team members.

For this guide, we outline a comprehensive guide for conducting effective employee performance reviews, offering key strategies to foster constructive feedback, align goals and promote employee development while enhancing organizational success through fair and data-driven evaluations.

Introduction to employee evaluations

Employee evaluations, often referred to as performance reviews, are a cornerstone of effective performance management. These structured conversations between managers and team members provide a valuable opportunity to assess an employee’s performance, clarify job expectations and align individual contributions with the organization’s broader objectives.

Regular performance evaluations not only help ensure that employees are meeting their responsibilities but also foster a culture of continuous improvement and accountability.

By incorporating performance reviews into your performance management strategy as a routine part of your process, you can help drive organizational success, support the professional growth of your team members and foster a more engaged and motivated workforce.

Prepare all constructive feedback ahead of time

Prepare your employee evaluation form before you meet with the employee. Take the time to compile your thoughts and feedback in advance, preparing specific and helpful feedback to guide employee development. Use your evaluation document as a framework for the meeting. By having all comments formulated beforehand, you can ensure the meeting stays on track and avoid missing any critical points. Using performance review phrases can also help ensure your comments are clear and compelling.

Ready to get started?

Post a Job

Ready to get started?

Post a Job

Use performance data to inform your evaluation

A fair and effective employee evaluation relies on objective performance data. By incorporating measurable results, such as sales figures, customer satisfaction scores or project completion rates, you can provide a balanced and evidence-based assessment of an employee’s work.

Performance data can also help eliminate bias and ensure that feedback is grounded in actual performance rather than perception. For example, if an employee’s time management skills require improvement, referencing specific data points, such as missed deadlines or delayed projects, can help clarify expectations and guide the conversation. Analyzing performance data can also identify areas where additional training or support is needed, enabling you to create targeted development plans that address specific challenges and help employees reach their full potential.

Keep your remarks clear and concise

Maintain a direct and transparent approach when delivering employee evaluations to ensure employees leave the meeting with a complete understanding of your expectations. Setting clear performance expectations helps employees understand what is required of them and how their performance will be evaluated. The best way to ensure clarity is to use specific details whenever possible.

For instance, if you’ve given an employee a low score for time management, share examples of missed deadlines or times when other teammates had to pick up their slack.

The same applies to goal setting. Ensure each goal includes a time frame and a method of measurement, so employees know precisely how success will be determined. Evaluating communication skills as part of the review process helps identify strengths and areas for improvement. Providing positive feedback during evaluations reinforces achievements and motivates employees to continue developing.

Provide employees with a copy of the completed performance review form

While employees often enter performance reviews hoping to hear about a potential raise or promotion, having the opportunity to receive honest feedback about their professional performance is something most workers value as well. Collecting employee feedback as part of the evaluation process is equally important, as it ensures a more comprehensive and balanced review by incorporating employees’ perspectives. By issuing employees a copy of their completed evaluation form, or at least a portion of the form, you will provide your team members with a reference point and help them stay on track to make the improvements you’ve outlined.

Keep employee performance review meetings a two-way conversation

Rather than lecturing an employee on the many areas they need to improve, strive for a meeting that is an open conversation. Allow employees to share their self-assessment, including their greatest strengths, most significant challenges, and areas where they believe they need to improve over the next month, quarter, or year. This process of self-evaluation may encourage employees to independently assess their performance, helping them reflect on their skills, contributions and areas for improvement. If an employee is quiet or doesn’t appear comfortable sharing their thoughts, engage them by asking questions such as:

What’s the one accomplishment from the review period that makes you most proud?
Where do you think you’ve made the most progress since your last review?
In what areas would you say you need the most improvement?
How can I support you in meeting your goals?

Open conversations help managers and employees stay aligned regarding goals and expectations.

End with a focus on the future

While discussing areas where employees need improvement may feel uncomfortable for both managers and employees, these issues are important to address. After discussing these issues, shift your focus towards the future and outline new goals, sharing your plans for improvement.

Performance reviews also provide an opportunity to support career and professional development by helping employees create personalized development plans that foster skill enhancement and leadership potential. Be sure employees understand that you’re on their side, you want them to succeed, and you’re always available to discuss their challenges and concerns. By ending on a forward-focused and positive note, the employee is more likely to leave the meeting feeling motivated and hopeful, which can boost job satisfaction and encourage the acquisition of new skills.

Create an employee development plan

An employee development plan is an essential outcome of the performance review process. This plan ideally outlines clear, actionable goals tailored to the employee’s unique strengths, areas for growth, and career aspirations. By collaborating with your team member to identify opportunities for skill development, such as enhancing leadership skills or taking on new responsibilities, you can help them progress in their role and contribute more effectively to the organization.

The development plan specifies the resources, support, and feedback the employee will receive throughout the review process. By making professional growth a central focus of your performance reviews, you not only boost employee engagement but also strengthen your team’s overall capabilities.

Hold multiple performance evaluations throughout the year

While many employers conduct employee performance evaluations on an annual basis, often to assess whether an employee’s achievements merit a promotion or raise, this annual review is now being complemented by quarterly performance evaluations that companies use to monitor progress more frequently. Holding weekly, monthly or quarterly informal review sessions can be beneficial for employees and employers. More frequent reviews help alleviate some of the pressure from the annual employee evaluation, get employees accustomed to discussing their achievements and challenges and make receiving feedback less intimidating.

Regular performance feedback and ongoing performance evaluation help assess performance and track progress beyond past performance. Bringing up areas of improvement as soon as you witness a mistake provides employees the opportunity to change their behaviour immediately, rather than repeating the same misstep. Using performance review templates and performance review comments can help document feedback effectively.

Conducting a successful employee evaluation requires striking a balance between direct criticism and praise and recognition, and setting challenging yet attainable goals to help employees grow. Using performance ratings, performance appraisals and performance reviews as examples can provide clear benchmarks for both employees and managers.

While maintaining this equilibrium can be challenging, providing straightforward and honest feedback (both positive and constructive) will stimulate action and inspire team members to improve, especially when recognizing when an employee consistently exceeds expectations.

By following these tips, you can open the lines of communication with employees, help employees excel in their careers and boost performance across your team or business.

Related Article: How To Hire Employees: A Step-by-Step Guide

Best practices for effective employee evaluations

To maximize the impact of your employee evaluations, it can be helpful to follow some best practices. Start by providing regular, constructive feedback throughout the year, rather than waiting for annual reviews. Use a fair and transparent evaluation process that incorporates both qualitative and quantitative measures, ensuring that each team member is assessed consistently and objectively.

Tailor development plans to the individual needs and goals of your employees, and foster a positive work environment where everyone feels valued and supported. Leading companies have demonstrated the benefits of ongoing feedback and coaching, which help employees grow and adapt in their roles. By implementing a robust performance management system and prioritizing open communication, you can drive organizational success and empower your team members to reach their full potential.

Employee evaluations are a vital part of any performance management system. By leveraging performance data, creating personalized development plans, and adhering to best practices, you can establish a fair and effective evaluation process that supports both individual and organizational success. Strive to provide regular feedback, cultivate a positive work environment, and invest in the growth of your team members. By prioritizing employee evaluations, you can build a high-performing team that is well-equipped to meet your company’s goals and achieve lasting success.