Get a software solution

Many companies are using employee performance management (EPM) software to handle evaluations. EPM allows companies to link individual performance to overall company goals.

I recommend: HR Online offers Performance Development Smart Suite with modules to help you better manage every stage of the process online, from evaluation and career planning to administration. Success Factors also offers a suite of software for employee evaluation and tracking.

Keep it simple. And legal.

Your business may not be big enough yet nor have enough employees to justify the expense of an investment in technology to track performance. Check out free sample evaluation forms online that you can tailor to fit your firm.

I recommend: Legal resource site Findlaw offers free sample evaluation forms and tools, and related articles about legal aspects of the hiring and evaluation process.

Do a 360

Many companies have given up traditional reviews entirely and use 360 reviews, which incorporate not only feedback from the supervisor and the employee, but also subordinates and a small group of peers. Done anonymously, they're designed to provide a more complete picture of the employee's strengths and weaknesses.

I recommend: Employee performance management technology firm Halogen Software offers Web-based applications designed to streamline the 360 review process.

Call in the Experts

Instead of creating your own evaluation forms and processes or using software, you may want to look to a consultant to design an evaluation and retention program specifically for your company.

I recommend: Conseo can develop simulation exercises and other tests to evaluate employee skills.