An employee performance evaluation is a process rather than an event. It involves setting clear expectations for the employee, making sure that she has what she needs to meet those expectations and providing consistent feedback. When employee evaluation is done correctly, there shouldn't be any big surprises when it's time to sit down for the formal job review, since the employee and manager have been discussing the worker's performance all along.

Ensure Clarity About Employee Duties

If you're going to evaluate an employee, you must understand the duties of the job yourself, as well as the skills and knowledge required to do it effectively. Further, it's your responsibility to ensure that the employee understands all the requirements and expectations of the job. A lack of clarity puts employees at a disadvantage and may result in unfair appraisals. One way to ensure clarity is through weekly, biweekly or monthly check-ins at which the employee can ask questions and the manager can offer guidance and, if necessary, suggest course corrections. Having evaluator and employee aligned on expectations sets the stage for fact-based performance standards and reviews.

Set Measurable Goals and Performance Criteria

The goals set for an employee should be measurable and realistic, but still require the employee to "stretch" himself in order to reach them. Establish objective performance criteria for each goal and make sure the employee understands how performance will be measured and how he can be successful. For example, if he is at a level 3 on a five-level scale, tell him what it is going to take to get to the next level and provide examples of what success would look like.

Solicit Employee Input and Provide Resources

Employees are more likely to perform at a higher level when they have some say in their performance goals. Collect input from an employee before making final decisions about the goals you set for her. Also, make sure the employee has the necessary resources to reach the goals you've set. Resources include not just the materials, equipment or budget to get the job done, but also proper training and support from management.

Provide Real-Time Feedback

Don't wait for an annual review to give and employee feedback. The same check-ins that you use for answering questions and setting expectations are an ideal opportunity for providing real-time feedback. If such meetings simply aren't possible, at least provide regular feedback via email or in some other format. Delaying feedback could allow performance problems to worsen and cause employees to miss out on small yet powerful improvement opportunities.

Prepare for a Formal Review

Give the employee plenty of notice before scheduled performance reviews to allow both you and the employee to prepare for the discussion. Review his job responsibilities, goals and performance measures. Collect information from previous reviews to identify any performance patterns, both good and bad.

Be Factual and Respectful

When it's time for the review, speak in fact rather than opinion. Evaluate the employee's performance against the objective criteria you spelled out early in the process, and bring specific examples to back up what you're saying. Plan to address areas of growth and professional development. Use respectful language and mannerisms during performance reviews. Give the employee the opportunity to share her thoughts on her own performance. Listen actively and ask the employee to clarify responses when necessary. Avoid arguing.

Agree on a Plan for Improvement, if Necessary

If the employee's performance isn't satisfactory, or you believe he can be performing at a higher level, then work together to devise a plan to improve. The employee should come away with clear expectations for future performance.

Set Consequences and Check Progress

If the employee fails to perform to expectations despite getting assistance, support and guidance, there will have to be consequences, such as a probationary period, demotion or even termination. Make sure the employee understands the consequences of subpar performance at the time you and he devise his improvement plan. Designate a specific day and time to check on the employee's progress.