The A-Zs of Hiring Glossary

Performance Appraisal

What Is Performance Appraisal?

Performance appraisal is a formal evaluation process that assesses an employee’s job performance against pre-determined objectives and goals. It is typically conducted annually, although some companies may conduct them more frequently. The goal of performance appraisal is to provide feedback to employees on their strengths and weaknesses, and to identify areas for improvement.

During a performance appraisal, an employee’s job performance is evaluated based on various factors such as job knowledge, quality of work, productivity, communication skills, teamwork, and attendance. The evaluation is usually conducted by the employee’s direct supervisor or manager, and may involve a self-assessment by the employee.

Performance appraisal is an important tool for organizations to improve employee performance and productivity, and to identify high-performing employees for promotions and other opportunities.

It is important to note that performance appraisal should not be the only means of providing feedback to employees. Regular feedback and coaching throughout the year can help employees improve their performance and achieve their goals.

Why is performance appraisal important?

Performance appraisal is important because it helps organizations evaluate the job performance of their employees and provide feedback on areas that need improvement. It also helps in identifying the strengths and weaknesses of employees, and in making decisions regarding promotions, transfers, and terminations.

What are the different types of performance appraisal methods?

There are several types of performance appraisal methods, including:

  • Graphic Rating Scale
  • Behavioral Observation Scale
  • 360-Degree Feedback
  • Management by Objectives
  • Ranking Method

Each method has its own advantages and disadvantages, and organizations may choose to use one or a combination of these methods based on their specific needs and goals.

Performance Appraisal Dos And Donts


  • Set clear and measurable goals for employees
  • Provide regular feedback throughout the year, not just during the appraisal process
  • Use objective criteria to evaluate employee performance
  • Ensure that the appraisal process is fair and unbiased
  • Provide opportunities for employees to give feedback on their own performance and the appraisal process
  • Use the appraisal process as a tool for employee development, not just for making administrative decisions


  • Don’t use the appraisal process as a way to punish or intimidate employees
  • Don’t base evaluations solely on subjective opinions or personal biases
  • Don’t wait until the end of the year to provide feedback or address performance issues
  • Don’t ignore employee input or concerns during the appraisal process
  • Don’t use the appraisal process as a substitute for regular communication and coaching
  • Don’t make promises or commitments you can’t keep regarding employee performance or compensation
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