I have had a number of jobs, some of which I did better than others. Most of them had performance evaluation components and I have been on both sides the evaluations.
Nobody likes to receive a bad review, but, here's the thing, every review is an opportunity for the employee. If they don't sack you, you can still excel*. So, when you receive that (fair or seemingly unfair) bad evaluation, what do you do?
Well, first and foremost, engage. Tackle the issue. Your boss has just told you that you need to improve; find a way to do that. If you don't understand what you need to do to correct things, ask. Take the initiative to fix the problems. Work with your supervisor to develop a strategy, and remain positive.
In my time as a manager, I have given poor evaluations and I have given people verbal and written warnings (by the way, all of my "verbal" warnings were, in fact, written down). I have told people that if issues were not addressed and the behaviour continued, termination might be the result. It was never a threat; I was always ready to work with my team to help them improve their performance. However, many employees didn't take the opportunity to better their performance. Those were the employees I eventually had to fire.
About a 8 or 9 months ago, I submitted a weekly performance report. It wasn't great. I filled it out and realized that I was clearly stagnating. I wasn't being innovative; I wasn't thinking of new ways to attract or meet new candidates; I wasn't pro-actively making myself a better recruiter. Realizing this, when I submitted my report I added a little note to my manager. I told her that I realized that things weren't really working, and that I had become a little complacent as a recruiter - following the same processes even though they were no longer reaping good results. I told her that I was going to re-evaluate what I was doing and figure out a way to get better. She spoke to me about it briefly. I don't know if she would have even brought the topic up had I not (my performance wasn't bad, but it was mediocre).
This is what I mean by tackling the issue. I faced up to the situation and worked, worked, to improve. And I'm still with that company, and I have been a much better recruiter and employee ever since.
All that being said, if you are confident that you are doing a good job, don't be afraid to say so. This doesn't mean that your boss is wrong in his evaluation (there could be some mis-communication), but if you know you are a hard working employee, say so. At the same time, listen. You may work hard, but that doesn't mean things are working well. Being assertive about your abilities while also being open to opportunities for improvement should demonstrate to your employer that you are someone they want to keep.
I had a first-year English prof (geez, I wish I could remember his name) who told us at the beginning of the semester that he had never failed a student... however, he had a lot of students who failed themselves. Similarly, as a manager I never terminated an employee...
Don't terminate yourself.
*Assuming you don't have a boss who truly wants to undermine you (which most don't), or you're not in a job for which you are clearly not qualified.