A performance appraisal is a proceeding in which an employee's performance is reviewed, usually by one or more supervisors. Also known as a performance review or employee review, in companies where performance appraisals are conducted, they usually take place on a regular basis, with annual reviews being very common. This practice is controversial in some areas, as some people believe that it is not an effective way to gauge employee performance, and it can certainly be very stressful for all parties involved.
The mechanics of a performance appraisal vary, depending on the company. Commonly, one or more supervisors prepares a formal written report which is used in the evaluation. The employee may also provide a written self evaluation. Then, the employee sits down with one or more supervisors to talk about specific issues brought up in the written reports. After the sit down meeting, a final report may be prepared and kept on file. A rubric may be used to keep evaluations fair and equitable throughout the company, with a checklist of topics and issues to cover in all appraisals.
Justifications of performance appraisals usually revolve around the idea that employees need a formalized way to determine how well they are doing their jobs. Praise or criticism on the job is helpful, but a written report and an evaluation which adheres to a clear set of criteria can be much more helpful. A performance appraisal also provides a setting for interventions, and allows employees to submit feedback in a safe environment. For example, an employee criticized for doing a poor job on something may suggest that better training be provided, because the employee did not know how to perform the task. Likewise, employees can criticize immediate supervisors who may not be working to help their employees succeed.
Critics of the performance appraisal argue that, for the employee being evaluated, it can turn into a high stress situation. Employees and supervisors alike often express dread of appraisals, and employees commonly become highly defensive during the evaluation, which is not beneficial. Furthermore, the evaluation tends to focus on recent incidents, because they are fresh in the memory of the evaluators, and it may not provide a balanced review of performance.
Having documentation can be valuable from the perspective of a company which is considering the termination of an employee. Many nations have laws which protect people from wrongful termination. By documenting identified problems with employees and developing action plans to deal with such problems during a performance appraisal, a company can demonstrate that an employee was aware that he or she was at risk of termination, and that the employee knew what could be done to prevent termination.