Q: How should I evaluate my employees?

A: Performance feedback is one of the most powerful forms of motivation for employees. Do this poorly and you will lose the investment you have made in your people.

Here are three types of evaluation procedures and how to use them.

The first evaluation type is objective measures of performance. This includes things you can count such as sales booked, number of floors cleaned, etc. Employees typically find this form of evaluation both fair and informative. However, it's critical that you determine the specific observable behaviors that represent outstanding, average and poor performance. For a salesperson, what dollar volume of sales for a given time period constitutes different levels of performance? This information is excellent for gauging what an employee has contributed to the organization and providing feedback.

Second, every job has tasks and duties. Evaluating a person on job tasks requires two things: 1) The tasks must be clearly described and 2) the behaviors associated with outstanding, average and poor performance must be identified. The worker must know both what needs to be done and how it should be accomplished. These behaviors should reflect the performance standards and culture you articulate in your business for outstanding performance.

Like objective measures, evaluations focused on tasks and duties may be used to gauge what an employee has contributed, provide feedback, establish future improvement goals and support pay awards.

Finally, jobs require employees to possess specific competencies that enable the performance of tasks and the achievement of specific goals. Again, you articulate an employee's competency levels by identifying behaviors shown by employees with high, average and low levels of a competency. You should focus only on competencies required for an employee's current job as an indicator of current performance and short-term development needs. Focusing on competencies for higher-level jobs should be reserved for long-term succession planning and could be considered discriminatory if used to evaluate an individual's current level of performance.

Michael Sheppeck is an associate professor of management at the University of St. Thomas Opus College of Business.