Performance evaluation and management - A complete guide

Anagha Vallikat
min read
Performance evaluation and management - A complete guide

One of the most stressful times in the lives of leaders is judging and getting performance management right. Performance evaluation is an integral part of performance management. However, it is inherently subjective and ridden with inaccuracies and biases. Moreover, the concept of continuous evaluation sounds exciting but it’s challenging to implement. Here is a performance evaluation guide that will help you understand more about the performance management system

Here are some performance management stats for you:

  • Only 8% of companies believe that their performance management process is highly effective in driving business value.
  • On the other hand, a mere 58% say it’s not an effective use of time.
  • 45% of HR leaders do not think annual performance reviews are an accurate appraisal for employee’s work.
  • 69% of employees say they would work harder if they felt their efforts were better recognized.
  • Companies that implement regular employee feedback have turnover rates that are 14.9% lower than for employees who receive no feedback.
  • 92% of respondents agreed with the assertion, “Negative (redirecting) feedback, if delivered appropriately, is effective at improving performance.”
  • Managers who received feedback on their strengths showed 8.9% greater profitability.
  • 1 in 5 employees are not confident that their manager will provide regular, constructive feedback.
  • 43% of highly engaged employees receive feedback at least once a week.

Now that we understand the consequence of having a broken performance evaluation process let’s look at this performance evaluation guide to know how we can make it stress-free and easy to implement. 

Performance evaluation and management - A complete guide | peopleHum

Define Goals

When you know what you want, it gets easier to achieve it. Defining the goals and expectations will help boost motivation and productivity. When you set prior goals for your team, then it becomes easier for everyone to align together. Otherwise, it becomes nothing less than chaotic and a heated discussion. 

Thanks to the advancement in technology, there are countless tools available in the market which makes goal setting easier than ever before.

Certain human capital management platforms help in 

  • Identifying and assigning goals, 
  • Linking them to the performance evaluation process, 
  • Measuring the impact. 
  • Get a heat-map on which teams and individuals are achieving their goals and hitting the mark.

However, it is our responsibility to ensure that while defining goals, utmost care and precision is taken. There are a few things to keep in mind while defining goals. Merely deciding on what you want is not going to help you. The formula for effective goal setting is quite simple, you have to live by it and breathe by it.


You know what they say, “ Failing to plan is planning to fail”. You have to design a course of action that will help you reach the goal. Define what to do and what not to do, put a time on things. A schedule will help you stay focused. It will be beneficial for you if you review what you have achieved at the end of every day. This is a great motivation factor. However, one thing that you have to keep in mind is that “If the plan doesn’t work, change the plan and not the goal.”


You would have heard this countless times before but let me repeat it again. Be SMART

S- Specific

Be specific. For instance, ‘increase employee engagement’ is not specific. Have a clear idea. Increase employee engagement by 10%, hire 20 employees next month and the like are specific goals. Streamlined goals are always easier to achieve.


The second point takes continuation from the first one which is to set measurable goals. Increase productivity or increase performance are vague concepts and cannot be measured. Rather set goals which are measurable.


If your goal is to make a Zebra drive a Ferrari, I have bad news for you! The goals must be attainable. Understand what is attainable, it is great to take on challenges but you should also be proactive and foresee what might come along and go wrong.


While defining goals, set both long term and short term goals. Your short term goals must resonate with your organizational goals. If there is a large gap between your short and long term goals, understand that there is something fundamentally wrong.

T-Time Bound

How would you measure your goals if you have not put a time frame on it? It is important to tag time to your goals. “I want to increase the revenue of my company” is definitely a goal. But what meaning does it make if your revenue increases by 10% in twenty years? Goals have to be time-bound!

3. Implement

Say that you have the perfect recipe to make an apple crumble pie. You have all the ingredients and tools at your disposal. But you just don't make it. What's the point right? Exactly the case with plans and strategies! what's the whole point of coming with a great plan and an exemplary strategy if you are not going to implement it? Make sure that your recipe is in place and cooking the right way.

Performance Evaluation

By definition, performance evaluation process is the process by which managers and supervisors examine and evaluate their employees based on set parameters which can vary from punctuality to quality. The result of which is used in various aspects during the employee lifecycle. If you would like to know more about employee lifecycle, read our blog on employee lifecycle. It's always good to research and hence, it will be great if you brush through some performance evaluation examples and provide your employees with the same to ensure that your performance evaluation gives the desired results. Now, however, let’s move on to some of the methods of performance evaluation.

1. 360-Degree Feedback

Imagine making a pizza with nothing but flour. How would it be? Bland? Plain? That's exactly what happens when you evaluate an employee with just one feedback. A 360-degree feedback is also called a multi-rater feedback for reasons easily comprehendible. It is a type of feedback where feedback is collected from everyone the employee is associated with; his colleagues, manager, stakeholders and the employee himself. This helps in getting a holistic view of the employee and will help them in understanding where they stand.

2. Self-assessment

 'Who better to judge you than yourself?' You can give your employees a self-assessment scorecard to understand where they put themselves in the chart. This will help you to understand their behavioral standpoint. Whether they are egoistic, modest, mindful and the like. This way, you can tackle them the right way and can also correct them and guide them if necessary.

3. One-on-One

This is one o the most powerful and effective methods of performance evaluation. Interacting with your team on a regular basis will improve productivity as there would be more clarity over the goals and target. The evolution of technology has drastically altered the way businesses function and operates. Scheduling one on ones has become really easy with HR software, human capital management platforms and the like.

4. Rating Scale

Rating scale is a commonly used method for performance evaluation. Numeric or text values corresponding to various parameters would be detailed in the scale. It is usually close-ended questions which aim to understand a specific attribute of an employee or his performance in general.

5. Developmental Checklist

This is quite self-explanatory. It is usually divided into areas and stages of development. The milestones, tasks achieved and likewise are checked and observed here. The development and growth of an employee or a team pertaining to a specific task or the goal assigned are also analyzed through the developmental checklist. It is a good method for evaluating your employees.

6. Management by Objectives

MBO just furthers the point of goal setting. It takes its trail from goal setting where the employees and the managers set a specific, attainable goal and the same can be measured based on various parameters and attributes.

Performance evaluation is quite a hefty task and there are countless methods to do it. But you ace it when you put your heart and brain into it. Genuineness, honesty and unbiased are characteristics of the heart and choosing the right tool to deliver these is where your mind and brain comes to play. Talent management is definitely not easy. But it can be made simple and effortless with the right human capital management platform.


It goes without a doubt that performance evaluation and performance management are not easy tasks. It is said that it takes a village to raise a child and it is only fair to think that it would take a whole nation to get performance management right. But that's not the case with the evolution of technology and human capital platforms.

Deloitte measured the impact of its performance across 90,000 people with 2 million person-hours spent across each cycle and found it to be inactive. Are you doing the same? However, the advancement in technology has come out as a boon by saving time, cost and effort. Therefore, it’s time to use new-age Human resources approaches with the best that technology has to offer to simplify your performance evaluation process. However, no matter what technology you have in place, it all boils down to how you make use of the technology to make people decisions.

What is your take on this performance evaluation guide and performance management? Share your thoughts in the comments section below.

We hope you got some great insights from this blog. Its now time to apply it. Get started with peopleHum for free today. No credit card needed.

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