An appraisal (or performance appraisal) is the formal process of evaluating an employee’s performance. This process measures performance against pre-set objectives, standards, or job expectations. Usually, a supervisor conducts it.

Performance appraisal typically includes:

• Reviewing past performance.

• Discussing strengths, weaknesses, and areas for improvement.

• Making decisions on pay, promotions, or training needs.

Appraisal vs. Performance Management

The difference between performance appraisal and performance is in its aspect, focus, frequency, methods, style, and outcomes

• Performance appraisal is traditional. Performance management is modern.
• The focus of appraisals is on past performance. It is retrospective. Performance management is ongoing and looks at future development
• Performance appraisals are not frequent. They’re conducted annually or bi-annual. Performance management is a continuous. It can be carried out monthly or quarterly.
• In appraisals the Manager rates the employee. In performance management rating is collaborative. It is done by self, peers, manager, and sometimes 360° feedback.
• The purpose of appraisals is evaluation, ranking, and reward. The purpose of performance management is growth, coaching, aligning goals, and engagement.
• The style of appraisals is judgmental or grading. The style of performance management is developmental. It focuses on guiding performance.
• The outcome of appraisals is tied only to salary or promotion decisions. The focus of performance management is broader, generally for learning, career path, innovation, and performance improvement

So, Is it Just a Name Change?

It’s not only a change in name. It shifts from appraisal to performance management. More importantly, it is a Performance Appraisal or Management? What’s the Difference?

When someone says appraisals are outdated, it usually reflects frustration with the design or implementation of appraisals. It does not reflect frustration with the entire concept.

Why People See Appraisals as Outdated

• Traditional appraisals happen once a year, making them feel irrelevant in a fast-moving workplace.

• Traditional appraisals are too bureaucratic. They have become and turned into a “form-filling” activity  or exercise rather than a genuine performance conversation.

• They are generally biased and subjective. The ratings reflect managers’ personal views rather than actual performance.

• They are backward-looking. They focus on past performance instead of future growth and development.

• They have a low impact. Employees rarely see clear changes in rewards, promotions, or career paths after an appraisal.

Why Appraisals Still Matter

Despite the criticisms, performance appraisals are still important when done well because they:

• Provide a structured feedback to employees.
• Aligning individual goals with organizational strategy.

• Identify training and development needs.

• Support reward decisions like bonuses and promotions.

• Encourage two-way communication between staff and managers.

The Modern Shift to Continuous Performance Management
It is not easy to discard performance appraisals. Instead organizations are modernizing them by:

• Conducting frequent check-ins like quarterly or monthly conversations instead of once a year.

• Enhancing 360-degree feedback where peers, subordinates, and clients provide input.

• Focusing on coaching by managers who act as coaches and not judges.

• Developing Data-driven insights using HR analytics to supplement discussions.

• Setting forward-looking goals that emphasizes growth, learning, and future performance.

Conclusion

Appraisals are not outdated, but the traditional annual-only, rating-heavy style is. If they are reimagined as continuous conversations, they become fair and developmental discussions. In this way, they remain one of the most powerful tools for performance improvement.

Performance appraisal is one component of performance management. Performance management is broader, ongoing, and more strategic.