It doesn't work on Pokemon that don't evolve. It raises the stats by 50% for Pokemon that can evolve but haven't, including baby Pokemon, but not including baby Pokemon evolutions. By 30% for Stage 1 evolutions (like Ivysaur, Chansey, etc). Scyther is very powerful with this I think.
Note: This is just something I heard on smogon, I don'tknow if it is confirmed or not.