Performance Evaluation: Definition, What to Expect and Common Types

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Systematic evaluations of employees play a direct role in improving a company from within. Employee performance can be enhanced when individuals understand their duties, what goals they should aim to achieve and what behaviors are expected of them. This article will discuss performance evaluations, including what to expect and what types of assessments an employer may use.

What is a performance evaluation?

A performance evaluation is a formal assessment and review of an employee’s job performance. Evaluations take into account an employee’s behavior and results based on their job responsibilities. Performance evaluations are normally the culmination of year-long overview and assessment. 

Why is a performance evaluation important?

The purpose of a performance evaluation is to acknowledge an employee’s performance and provide feedback on their strengths and areas they can improve. Evaluations lead to better job performance by helping employees identify and improve upon areas that challenge them. Evaluations can also motivate employees by rewarding them for a job well done.

What to expect during a performance evaluation

Evaluations differ for every business, but you can expect a performance evaluation to follow this general timeline:

Set goals and expectations at the beginning of the year

Normally at the beginning of January or the fiscal year, managers will meet with their teams to share annual goals and expectations. They may also meet with each individual employee to set personal performance goals. Communicating expectations helps everyone stay focused and motivated to achieve company milestones.

Monthly or quarterly meetings to discuss progress

These check-in meetings normally occur monthly or quarterly to prepare for the final review. Check-in meetings should discuss expectations, and address any questions or concerns about job duties and performance.

Employee and manager prepare separate notes one month before the final review

Some jobs may require more extensive preparations prior to the yearly review. Employees and managers may begin compiling notes from previous meetings, sales reports and other quantitative results for review. Data is normally used to prepare evaluation forms, written letters and talking points for the final review.

Final review in-person at the end of the year

The actual yearly review may take many forms based on the job. However, it will generally include a discussion of the goals and expectations set at the beginning of the year and how well the employee met them. Yearly reviews should provide employees with constructive feedback and remain honest and open. Employees should feel comfortable discussing their performance, and they should relay any concerns they have about their position.

Common types of performance evaluations

Here are some of the common types of performance evaluations:


Self-assessments are usually done with questionnaires. Employees reflect on their performance and identify their strengths and weaknesses. This allows individuals to analyze their own behaviors and areas they can improve, which makes it easier for employers to encourage their growth.

Team assessment

Group performance is one of the main driving factors behind great results. By evaluating team performance and making adjustments, employers can improve communication, workflow and enhance team relationships to maximize achievements.

Graphic rating scale

This scale provides general feedback and is usually used in conjunction with other models. The scale consists of six or seven columns. The first column on the left lists variables such as ‘teamwork,’ ‘creativity,’ ‘punctuality’ and so on. The subsequent columns next to each variable have a value the employee is rated on. Values may be words such as ‘below average,’ ‘average,’ ‘above average’ or numerical scores of 0 to 5.

360-degree rating

This style of performance evaluation is considered one of the most complete. It takes into account the employee’s own review, manager and team member reviews, and sometimes even customer and supplier evaluations, generating valuable feedback from everyone the employee interacts with.

Forced choice

Forced choice contains a list of clearly-written statements that define an employee’s behavior. Statements might say something such as: ‘finishes projects on time and meets expectations’ or ‘gets along well with coworkers.’ Managers will place a plus sign if the statement reflects the employee’s behaviors and work ethic, or a minus sign if the statement does not.

Skill evaluation

This style assesses competency, and factors in cognitive skills, physical skills and behavioral skills. This evaluation normally begins with a self-assessment identifying what skills the employee believes they have, which need development and which they do not yet possess. The employee shares their assessment with their manager and together they create a plan of action to make improvements.

Goals and results

This evaluation style quantifies performance. The assessment largely takes into account numbered results such as customer satisfaction data, sales conversions and customer retention over a specified time period.

Performance evaluation example

Here is an example of a performance evaluation:

Overall Performance (92%). Sarah shows great discipline and reliability. She is available to her team members and makes an effort to enhance her critical thinking skills. She is well organized and manages her time well. Some issues with tardiness throughout the year have been previously discussed and she has since taken personal steps to ensure she gets to work on time.

Goals Achieved (75%). Of the yearly acquisition and traffic target goals set for Sarah, she has achieved 75%. This is a significant amount and has contributed greatly to the growth of the company this fiscal year. Sarah and I will discuss Q1 goals at our next meeting.

Improvement (70%). Sarah has shown great improvement in her marketing, communication and teamwork skills. While Sarah has room to grow into her position, she has demonstrated the willingness to learn, a dedication to her role and the ability to proactively problem-solve.’ 

This evaluation is good because it lays out the employee’s overall performance, goals and improvement, then breaks down each area for the employee to understand why they received that percentage. The evaluation uses positive language and addresses issues that led to a lower mark respectfully, which helps motivate the employee to continue working hard and improving on their weaknesses.