Performance appraisal

A performance appraisal (also known as a performance review, performance evaluation, career development discussion, or employee appraisal), is a periodic process where the job performance of an employee is documented and evaluated.

Performance appraisals are most often conducted by an employee's immediate manager or line manager. While extensively practiced, annual performance reviews have also been criticized as providing feedback too infrequently to be useful, and some critics argue that performance reviews in general do more harm than good. It is a principal-agent framework that describes the relationship of information between the employer and employee, in particular the direct effect and response received when a performance review is conducted.

Performance appraisals are a part of career development.

Objectives

Performance appraisal, as part of a performance management system, aims to increase the efficiency of the organisation and reduce inefficiencies that arise from subordinate work that fails to align with corporate goals. Performance appraisal interviews provide feedback to employees, at the same time facilitating collaboration and discussion on pay, career development and progression, and employee discipline, clarifying the expectations of subordinates, communicating their effectiveness in achieving those goals, and ideally improving employee engagement and satisfaction. Appraisals can also enhance motivation by recognizing the contributions of employees and providing them with growth opportunities. Although they can help facilitate management-employee communication, if not executed appropriately, they may result in legal issues or instead weaken employ morale towards organizational goals and values.

Performance appraisals may increase diversity in leadership positions by ensuring fairness in hiring and promotion, particularly of individuals of socially-excluded backgrounds, especially when such appraisals are done in a culturally-sensitive manner.