Employee appraisal is the process of evaluating an employee’s work performance against established expectations, goals, or standards. It typically involves a structured conversation between an employee and their manager about performance, accomplishments, areas for improvement, career goals, and future objectives.
Employee appraisals are also commonly called performance appraisals, performance reviews, employee evaluations, or performance evaluations. The U.S. Office of Personnel Management defines appraisal as evaluating performance against the elements and standards established in an employee’s performance plan.
Although employee appraisals have traditionally been associated with annual reviews, many organizations now combine formal appraisals with more frequent feedback and check-ins. CIPD describes performance reviews or appraisals as one part of a broader performance management process rather than a standalone annual event.
Purpose of an Employee Appraisal
How Does the Employee Appraisal Process Work
What is Included in an Employee Appraisal
Common Employee Appraisal Methods
Difference Between Employee Appraisal and Performance Review
How Often Should Employee Appraisals be Conducted
Questions to Ask During an Employee Appraisal
The purpose of an employee appraisal is to give employers and employees a structured opportunity to evaluate performance, discuss expectations, identify development needs, and establish goals for the future.
An appraisal should do more than tell an employee whether they are doing a "good" or "bad" job. A useful appraisal provides context around performance and creates a plan for what happens next. For example, an employee appraisal might address:
A typical employee appraisal process has five stages.
Managers and employees establish what successful performance looks like. Depending on the role, expectations might include revenue targets, project deadlines, customer satisfaction scores, productivity measures, quality standards, leadership behaviors, teamwork, or other job-specific responsibilities. The measures should relate directly to the employee's role rather than evaluating vague traits such as whether someone has a "good attitude."
Performance should be observed throughout the appraisal period rather than reconstructed from memory immediately before the review. Managers can keep track of completed goals, missed deadlines, project results, customer feedback, accomplishments, training, and previous performance conversations. Regular documentation can make the eventual appraisal more representative of the employee's full performance period.
Depending on the appraisal method, the manager may review feedback from the employee, coworkers, clients, other managers, or people the employee supervises. An employee may also complete a self-appraisal describing accomplishments, challenges, and goals before meeting with their manager.
An effective conversation usually examines both results and context. What did the employee accomplish? Where did they struggle? Did priorities change during the year? Were there barriers outside the employee's control? What support would help them perform more effectively? Performance conversations can also be used to clarify expectations before the next review period.
That could include new objectives, training, expanded responsibilities, coaching, a development plan, or specific steps to improve performance.
The exact format depends on the organization and role, but an employee appraisal generally contains some combination of performance goals, results, competencies, feedback, ratings, development needs, and future objectives. For example, an account manager might be evaluated on client retention, responsiveness, revenue goals, and relationship management. A recruiter might be evaluated on quality of hires, hiring manager satisfaction, time to fill, communication, and compliance with recruiting processes.
Common employee appraisal methods include a rating scale, management by objectives, 360-degree feedback, self appraisal, competency-based appraisal, and behaviorally anchored rating scales.
A rating scale scores employees against defined performance categories. Rating scales make it easier to create a consistent format across employees, but the criteria need to be clearly defined to reduce subjective interpretations.
Management by objectives focuses primarily on whether an employee achieved previously established goals. This approach works particularly well when results can be clearly measured, although managers should consider circumstances that affected whether a goal was achieved.
A 360-degree review collects feedback from several people who work with the employee rather than relying only on the employee's direct manager. Feedback might come from supervisors, coworkers, direct reports, clients, or other stakeholders.
In a self-appraisal, employees evaluate their own performance before discussing it with their manager. They may be asked to identify accomplishments, challenges, areas for development, and goals. Comparing the employee's perspective with the manager's evaluation can also uncover differences in expectations or perceptions.
Competency-based evaluations assess employees against skills and behaviors considered important for a particular position. A manager, for example, might be evaluated on coaching, communication, decision-making, conflict resolution, and leadership rather than only on numerical results.
Behaviorally anchored rating scales, often abbreviated as BARS, connect ratings to specific examples of workplace behavior. Instead of simply rating someone a "4" for customer service, for instance, the rating criteria would describe the observable behaviors associated with that score. This can help make broad performance categories more concrete.
There isn't much of a difference between an employee appraisal and performance review. Both terms describe a formal assessment of an employee's performance over a defined period. Other organizations may use terms such as employee evaluation, performance evaluation, annual review, or appraisal meeting.
Many companies have traditionally conducted employee appraisals annually, but an appraisal does not have to be limited to once per year. Organizations may conduct reviews annually, semiannually, quarterly, at the end of a probationary period, or following major projects. More frequent conversations can also supplement a formal appraisal.
Questions to ask during an employee appraisal include what accomplishments are you most proud of, what has made your job more difficult, which responsibilities would you like to develop further, where do you need additional support, what skills would you like to build, are your current goals still relevant, what would help you perform more effectively, and what goals should we prioritize during the next review period.