Career Guide
Career development
Performance Appraisal: Definition and 7 Different Types
Performance Appraisal: Definition and 7 Different Types
Updated February 4, 2023
Performance appraisals are reviews businesses use to determine their employee’s work performance. These can help identify an employee’s strengths and determine areas for improvement. Understanding the advantages and disadvantages of performance appraisals can help you determine if it’s a tool you want to implement in your business.
In this article, we define performance appraisals, discuss their purpose, list several different types of performance appraisals and examine the benefits and drawbacks of using them.
Key takeaways:
A performance appraisal is an ongoing opportunity to review employees’ performances and abilities.
There are several types of performance appraisals, including peer reviews, self-assessments and 360-degree assessments.
Though they might not provide a full view of an employee’s performance, appraisals can help guide responsibility and goal setting for managers.
What is a performance appraisal?
A performance appraisal, or annual review, is an evaluation of an employee’s work performance and contribution to a company over a designated period. This systematic process assesses an individual based on a predetermined set of criteria. It looks at factors such as an employee’s attitude, work ethic, attendance and mastery of their role. Typically, a supervisor or manager conducts the performance appraisal once a year.
How performance appraisals work
Performance appraisals often have formal designs by human resource departments and company leadership to guide employee performance. This often includes a schedule and specific requirements for employees, their managers, peers or others for assessing performance to determine goals and development.
Once managers schedule and hold appraisals, they often set goals, provide feedback and provide incentives. For example, if an employee receives a positive appraisal, they may receive a financial bonus.
