In order to reap the best possible advantages and get best of results, teams require to be evaluated, and that should be done in regular basis. This is because, you should be aiming at your goal through your team's eyes. And if they are not thinking or seeing the same as you do, it may happen that your team is losing its edge and you as well! You can evaluate the performance of a team through effective communication. You should be interacting with your team rather observing it. But, you should also remember that your evaluation should come as one of the members of the team, not as a leader.

If you want most from your performance evaluation, then apart from your evaluation, ask your the other members to conduct their own evaluations. This way, every member would get to know their team's strengths and weaknesses, and will try to help themselves improve team performance. You can take many things into consideration for performance evaluation, such as each member's contribution to group efforts apart from team meetings, attendance at meetings, constructive participation in meetings, ability & desire to work as a team and overall contribution as well.

Thus, let your team indulge in its own performance evaluation. How it can be done? Well, you can make them ask certain questions that you would normally have to ask. Like, who are the individuals who consistently meet or exceed expectations in an area of performance? What advice would they offer to improve performance for newer team members?

If necessary, make a list of certain questions that each team member should have to ask. Then, do compare the answers with your own results. This would be the best way to know what your team members have in their mind and how they think.