Employee performance evaluation belongs to one of the most important evaluation tools in the context of human resource management practices. Performance evaluation requires a systematic approach, and the choice of optimal method tailored to business needs is often a very complex task, as there are many available options, which are repeating to a greater extent. Each method has its advantages and disadvantages, so the management should carefully evaluate which appraisal method they choose in order to achieve the objectives set by the business. In business practice it is a common phenomenon to combine different methods of performance appraisal. The present paper defines issues of performance evaluation, points to the established methods of performance evaluation, parallel to the requirements and criteria imposed on a successful system of performance evaluation. The paper presents findings and results of the analysis of the effectiveness of methods of evaluating performance of employees accenting streamlining overall performance management process, as well as increase in business competitiveness on the market. According the above mentioned main aim is to analyze the methods of performance evaluation from the viewpoint of a degree of importance of requirements/criteria put on these methods.