Answer: The distinction between judging actions as evil and judging people as evil is fully discussed in David Kelley's seminal essay Truth and Toleration, since reissued in a second edition as The Contested Legacy of Ayn Rand: Truth and Toleration in Objectivism . I especially recommend chapter 1 because it addresses your question directly.
Basically, it is actions we can most easily and directly judge as evil. When we judge a person as evil, we are speaking of his overall character. One's character consists in the subconscious dispositions and patterns of thought that shape the general direction of our actions. One evil action may be an aberration, or it may be expressive of a more consistent character trait (in which case the offender will commit it and like actions repeatedly). The sum of one's character traits is the framework of who one is as a person, because it consists in the ways one tends to act, especially when one doesn’t make the effort to do otherwise. It is easy to judge actions, but hard to judge character, since to discern a character trait one needs to know the pattern of a person's actions, not just an individual instance.
You may know a person who did a sloppy job painting his house. This could be an instance of evading facts and effort
, which is what evil consists of in the Objectivist view
. You'd have to understand why he did a sloppy job, and what he thinks of it, and what he plans to do about it, to be able to tell; after all, he could have just been in a rush or been learning how to paint for the first time, neither of which are moral failings.
But let's say he doesn't care about the crummy job and expresses resentment over having to do it. That's beginning to speak to character. And then you see he is sloppy generally: he lives on TV dinners and he is disorganized at his job and scrapes by doing the minimum. Plus you find he's thoughtless and rude in his friendships and romantic relationships. Now you are getting the picture of the person as a whole.
Still, you can't assume that a person who hates house repair work is necessarily of bad character. He might be organized and attentive in other aspects of his life. Maybe he is working hard to get rich enough to be able to pay painters and never have to paint again. In that case, the sloppy painting job definitely could represent a moral failing he needs to correct, but it doesn't reflect a bad overall character.
Judging the actions and character of others is necessary if we are to benefit from our social relations. But it is important that we make such judgments objectively, based on the evidence, without reaching hasty generalizations. We can, and indeed, we must judge the character of others. How else would we know who would be best to seek values from, and who would be worst? But we judge actions most easily, and can only reach conclusions about character from a richer body of evidence.