How is employee performance evaluated (criteria and methods)?

Quick answer

1. Set clear, measurable criteria: objectives and KPIs tied to each employee's role.
2. Choose a suitable method: management by objectives (MBO), 360° review, competency scales or a combination.
3. Add regular feedback (not just an annual review), so you can correct course along the way.
4. Document the result in an evaluation form, as the basis for decisions (raise, promotion, development plan).
5. Discuss the conclusions with the employee and agree objectives for the next period.

The Labour Code (Law 53/2003) allows setting performance criteria and objectives, communicated to the employee on hire.
Dismissal for professional inadequacy requires a prior evaluation, under an established procedure — the evaluation form is the evidence base.
Evaluation criteria must be objective and non-discriminatory, under equal-treatment principles.
Evaluation data is personal data (GDPR): keep it with role-based access and a legal basis for processing.

Example: a sales team is evaluated on KPIs (target met, conversion rate), not on impressions.
Example: for a manager, a 360° review is used, with feedback from the team, peers and superior.
Example: for technical roles, a competency scale (from junior to expert) is applied to each key skill.
Example: short quarterly feedback replaces the surprise of a single annual review.

Vague or subjective criteria ("good attitude"), which cannot be measured and do not survive a challenge.
A single review per year, with no interim feedback, which lets problems accumulate.
No documentation in a form, which weakens decisions (raise, promotion, inadequacy) in a possible dispute.
Evaluation kept on paper or in Excel, with no history and no link to the employee record.

4softhr offers a performance-review module with objectives/KPIs, competency scales and regular feedback cycles.
Evaluation forms are linked to the employee record, so results have history and a documentary basis for decisions.
The 360° review collects feedback from the team, peers and manager in a single flow.
Results connect with development plans, onboarding and the org chart, in the same platform.
Romanian-language support and alignment with the Labour Code help with fair, non-discriminatory criteria.