What is a Performance Appraisal?

Performance Appraisal definition

Performance appraisals, also known as performance reviews and employee appraisals, are processes designed to evaluate and improve job performance. They form part of career development, particularly when future training needs are considered during the process.

There are many different types of performance appraisal – the most well-known is the manager/employee appraisal but peer appraisals, where colleagues are asked to judge each other’s performance, are also common.

Most organisations will conduct some form of performance appraisal every year but there’s a modern trend towards more regular appraisals, whether at quarterly or half-year intervals. Some companies have performance appraisals every month, although these are likely to be less formal and in-depth than the annual affair.

Some of the cited benefits of performance appraisals include improved communication in the manager/employee relationship and within teams, improved motivation through re-establishment of trust and managerial approval and performance improvement through re-aligning the employee’s day-to-day activities with the company’s goals.

Critics of performance appraisals say they are prone to an ‘overinflation’ effect, where managers rate employees as better-performing than they actually are to avoid conflict. They also say employees often have negative perceptions of performance appraisals as inherently critical, outdated methods of evaluation. Another criticism is that formal performance appraisals do not always gel with modern organisational culture.