Introduction: Hospitals,employing over %50 of manpower in the healthcare sector,need to evaluate the performance of their employees in order to ensure that they are moving in the right direction toward their goals.The study aimed at assessing the employee performance evaluation system utilized at the general teaching hospitals affiliated with Iran University of Medical Sciences. 

Methods: This was a cross-sectional study conducted in the second half of 2004. Employees (n=510) working at Hazrat Rasoul, Shohadayeh Haftom Tir and Firouzgar hospitals comprised the study population. As many as 106 employees were selected as the sample population. The data was collected using a self-constructed questionnaire. validity and reliability of which was determined using content validity and test-retest. Data analysis was carried out through SPSS,using t-test ,Anova and Tukey test.

 Findings:According to The findings, the performance evaluation systems at the hospitals in the survey was unsatisfactory (M=54.30) and incompatible with the administrative system (M=62.08).On the other hand their performance evaluation was found to be satisfactory based on management principles (M=78.32).The study also showed a favorable condition for performance evaluation (M=68.70).

Conclusion: Although the study revealed a satisfactory level of acceptability of performance evaluation , the current evaluation systems were incongruent with the realities of the administrative systems of the hospitals. Based on the special nature of the healthcare sector ,developing a carefully tailored new system through revision and improvement of the peresent system seems necessary.