Performance appraisal is a process for evaluating and documenting how well an employee is carrying out his or her job. It is part of a company’s performance management system.
Performance appraisals are based on the employee’s progress against goals set once a year with his or her manager. Usually, employees and managers will have check-ins throughout the year; at the end of the year the manager assigns an overall rating.
The appraisal process gives employees feedback on their work, helps managers make decisions about pay increases and bonuses, and identifies areas that need improvement. Ongoing poor performance can lead to reprimands or termination.
Because performance appraisals affect an individual’s employment path, they can be stressful for employees.