As structural damage may affect performance and even lead to structural failure, the identification of structural damage is crucial. Testing mode parameters such as mode eigen values, natural frequencies and mode shapes is simple and convenient. It makes more sense for the eigen value to be objective for damage detection due to its higher sensitivity for structural damage compared with natural frequencies and mode shapes. However, it was difficult to use the traditional eigen value sensitivity method to identify structural damage accurately, because it was easy to ignore the change of mode shape. In order to improve its accuracy, the change of structure mode shape could be substituted with the linear combination of undamaged structure mode shapes, thus improving the eigen value sensitivity analysis method. The traditional and improved sensitivity was calculated under various damage conditions, and the comparison showed higher accuracy. The improved eigen value sensitivity method was applied to a real structure with holes of unknown size and location. The identified results showed that the accurate damage level and location were identified, thus validating the accuracy and practicability of this improved sensitivity method.