What is Performance Appraisal?
Performance Appraisal is the process of evaluating and reviewing an employee’s work performance, accomplishments, and contributions to the organization over a specific period. It is typically conducted by management and reporting managers and often referred to as an annual performance review. This evaluation assesses the employee’s achievements, strengths, areas for improvement, and overall effectiveness in their role.
The main purpose of performance appraisals is to provide constructive feedback to employees, identify opportunities for growth and development, and determine if any adjustments to compensation, such as bonuses or salary raises, are warranted. Depending on the company’s policies, performance appraisals may occur annually, semi-annually, or quarterly.
There are various types of performance reviews, with the most common being the top-down review, where a manager evaluates the performance of their direct reports. This process helps organizations ensure that employee contributions are aligned with company goals, fostering a culture of continuous improvement and development.
How HR teams use this term
HR teams usually use Performance Appraisal when they write policies, explain employee communication, review payroll or leave records, or keep employee data clean in an HRMS.