Evaluating employees is an important task of management. Formally writing down how employees are performing helps them to become more productive and, subsequently, helps the company meet its financial goals. Choosing the type of performance appraisal depends on the needs of your company. Performance evaluations can be based on the job duties or on the skill set required of the person occupying the position.

Purpose of Evaluations

Ideally, an employee performance evaluation system will be in place prior to hiring your first employee. Your requirements to satisfactorily fulfill the duties of the position are spelled out in writing, and the employee signs a form acknowledging that she has read and understood it. Throughout the performance period, your feedback to the employee on progress is imperative so there are no surprises when she receives a formal review. As soon as the evaluation period is over, you should administer the appraisal report and let the employee know that you will help in any areas that are less than satisfactory.

Job-Based Evaluation

Job-based employee performance evaluations focus on the duties of the position and the tasks required to perform them successfully. This is a standard type of evaluation you can use for all employees filling the same position. First you must perform a job analysis, separating all duties into large categories, such as essential functions and communication. Under the categories of the position, specify tasks required to fulfill them.

Be thorough in your analysis and ask your manager or the human resources department to review it. This will be the performance plan for the position. Each employee will receive the plan, sign it and be reviewed formally at the end of the rating period based on the duties outlined.

Person-Based Evaluation

A person-based evaluation structure is specific to each individual employee. It takes into consideration the knowledge, skills and abilities the employee possesses upon hire and learns in the course of the rating period. In this way, an employee is compensated fairly for what he brings to the organization and is not given pay increases based on general duties. Once he masters a skill, you are able to focus on the development of other areas in relation to how they benefit the company.

Considerations of Performance Evaluations

Job-based performance evaluations are simpler to administer. Once the plan is in place for the job, and as long as the duties do not change, you can use it for all current and future employees who fill that position. Because you will be using the plan on many occasions, it becomes less complicated for you to complete.

Person-based evaluations, on the other hand, are specific to each employee. Although employees who fill the same position will possess similar knowledge, skills and abilities, you will have to review and revise the plan with each new hire, and you will need to study it carefully prior to administering the formal appraisal.