A performance evaluation is a formal review of an individual employee's job performance over a specific time period. Performance evaluations measure such things as efficiency, increases in productivity, and progress toward departmental and individual goals. A SWOT analysis analyzes the strengths, weaknesses, opportunities and threats associated with a given topic.


Performance evaluations can provide meaningful feedback to employees to help them better themselves professionally and personally. Managers and employees who use the evaluation process to set performance goals can steadily increase job performance and overall human resources productivity over time. Making personal development a priority in your human resources department can help garner deeper loyalty in your workforce, as well. Evaluating individual and group performance can also help ensure that pay raises and other incentives are distributed equitably to high performers, rather than being based on politics, nepotism or simply length of service.


Performance evaluations must be performed by people, which always leaves room for human error. Using people to judge and assess other people brings a range of challenges to the table, such as political influences, emotional influences and interpersonal issues. Even when managers truly wish to act unbiased in evaluations, human handicaps, such as the propensity to place more emphasis on recent events than events further in the past, can dampen the equity of a review. Companies can counteract the human element of the process by requiring managers to keep records and attach them to reviews to back up their results. Soliciting feedback from more than one person in evaluations can also help keep evaluations fair by reducing personal influences on final results.


Records-based performance evaluations can help companies identify rising stars in their ranks, allowing them to choose the hardest working, most dedicated and most skilled employees to place on advancement tracks or even groom for executive leadership. Evaluations also grant companies the opportunity to continually reduce costs by improving efficiency in operations.


Performance evaluation weaknesses can introduce threats to the process. If employees feel they're being treated unfairly in an evaluation, especially when pay raises and incentives are on the line, they can become extremely dissatisfied. An inaccurate performance review system can cause high performers to leave the organization, or it can spread discontent throughout the informal communications network of the company.