The organization’s most valuable resource is its personnel. A key element in motivating an employee is a periodic, formal performance evaluation. It must assess the employee’s value to the organization in an equitable and objective manner.
An effective evaluation program will indicate the organization’s appreciation of good employees, help improve average and substandard employees, and serve as a key element in any decision to eliminate marginal employees.
It may also serve as the basis for incentive plans, bonuses, or wage and salary increases. However, the major factor must be the improvement in either the overall score or in individual performance factors. Don’t make the evaluation the only reason for monetary increases in the employee’s eye. Remember it is about performance.