A friend gave me permission to post:

Employee evaluations are more effective than money — but they have to be managed carefully and employers have to be vigilant in their reviews.

For example, I set very specific goals for the employees – part of the goal is about making the number of course – but part of the goals are also about achieving other results. I specify exactly what I want them to accomplish for the year; then I break it out by quarter and I visit their progress in reaching the objectives at least quarterly. This reminds them of the commitment they made to me (…I also ask them to commit to the number on a quarterly basis and commit to their objectives).

At the end of the year, I ask employees to write their own evaluation as part of the review process. Part of the reason is to remind them about what they have accomplished for the year. I always have a view in my mind (and in a folder) about the important things they have accomplished. You would be surprised at how many employees forget the really good stuff and they love to see that I remembered. Other times I have to remind them that they look better on paper (sometimes employees sound like they are superhuman on paper and I have to bring them down to earth based on their actual performance).

I have seen that employees work toward achieving their goals and want to get good evaluations – they “work to the compensation plan” and they also “work to the review process”.