Performance Appraisal
What is a performance appraisal and how does it differ from a performance review?
A performance appraisal is the formal evaluation of an employee's job performance against established expectations, typically conducted annually or semiannually. The terms performance appraisal and performance review are often used interchangeably, though performance appraisal sometimes implies a more formal, rating-driven evaluation while performance review can include continuous feedback models. Both produce documented assessments that feed into compensation, promotion, and development decisions.
Performance appraisal is the older, more formal term for what most organizations now call performance review. The terms overlap so much that academic HR uses them interchangeably; corporate HR mostly uses "review." The substance is the same: a structured assessment of an employee's work against expectations, producing documentation for compensation, promotion, and development decisions. The methods have evolved (from forced ranking to calibration, from annual-only to continuous-plus-annual), but the underlying purpose remains.
Common Performance Appraisal Methods
Rating scales: 5-point or similar numerical scoring on competencies. Behaviorally Anchored Rating Scales (BARS): ratings tied to specific observable behaviors. 360-degree feedback: input from manager, peers, direct reports, sometimes self. Management by Objectives (MBO): assessment against pre-set goals. Forced distribution: percentage assignments to rating bands (largely abandoned).
Performance Appraisal vs. Performance Review
Functionally synonymous in most contemporary use. "Appraisal" tends to imply more formal rating; "review" can include continuous feedback models. See performance review for the modern framing and cadence options.
What Makes Appraisals Useful or Useless
Useful: specific behavioral examples, clear expectations for next period, calibrated ratings across managers, no surprises. Useless: generic ratings without evidence, surprises on rating day, ratings that don't connect to pay or promotion. The same factors that make any feedback work apply.
Building Performance Appraisal Practice That Drives Real Outcomes
Use behaviorally anchored ratings or specific evidence. Calibrate across managers. Connect ratings to compensation and promotion decisions. Pair with continuous feedback through the year. See performance management for the broader discipline and halo/horn effect for the most common rating bias.
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