annual performance evaluation tool

The organization for which I work employs an annual performance evaluation tool that, while it has an organization wide format, is specific to each particular job. Department Directors are responsible for reviewing the tools annually to ensure that competencies Employees are expected to meet as part of their job fulfillment are appropriate to the jobs. The tool itself is divided into three parts: Department Specific Responsibilities, Organization Wide Responsibilities, Goals.
The Department Specific and Organization Wide sections are then broken down into several sections (Customer Service, Education, Safety, etc.) where each competency or expectation is rated on a 1-5 scale (1=Does Not Meet, 2=Needs Improvement, 3=Meets, 4=Exceeds, 5=Far Exceeds). Any area rated either a 2 or 5 MUST have a comment in the area provided. Comments may be made for all other ratings, too.
A Director initiates the evaluation at least a month before it is due, filling out each section as she sees appropriate. She also creates one or two goals for the Employee to accomplish in the upcoming year. The evaluation is then sent electronically to the Employee who reviews the ratings, comments, and goals written by the Director. The employee adds her own comments and goals and sends it back to the Director. The Director and Employee meet face-to-face to discuss any discrepancies, the Employee's performance over the past year, goals for the upcoming year, improvements needed, etc. If there are any disagreements between the Director and Employee on ratings, a compromise may be made if appropriate.
Ideally, the Director meets with each Employee throughout the year to discuss performance expectations, assist with continuing education, and check in on the progress of goals - - not just once a year at evaluation time. In addition to the organization template, my department uses 360 Peer Evaluations. Each employee has a three-question evaluation sent out to her direct co-workers shortly before her evaluation meeting is scheduled to take place. These peer evaluations are anonymous and typed up beforehand by the Director. This gives the Employee the opportunity to get peer opinions on areas in which she can grow, behaviors that may need improvement, but especially areas in which she excels and can get recognition for a job well done. This 360 evaluation process is also completed for Managers by those they manage, and for the Director by those she manages.
This format has worked well and opens up dialogue between all layers of Employees. The entire process is electronic so it is easily accessible, prior years can be reviewed, and items can be added or deleted as jobs change and evolve.