Performance evaluation is the process by which manager or consultant examines and evaluates an employee's work behavior by comparing it with preset standards.

There are 3 components:

1. Measurement,
   
2. Attribution, and
3. Appraisal

1. Measurement – measure the performance (risk and return) of the portfolio
2. Attribution – attribute performance to manager’s selection or allocation abilities
3. Appraisal – assess the manager’s performance