Let us start by defining a performance appraisal. Essentially, it is a meeting at which an employer has the opportunity to discuss with an employee what he or she has or has not achieved.
For the employee, a performance appraisal may be immensely stressful, but it has a two-fold purpose. Firstly, it gives the employee insight into areas of the job in which he or she is doing particularly well. This provides a boost in morale, and also often comes with an increase in wages.
Secondly, performance appraisals can help to prevent termination of employment, by giving an employee insight into areas where they are not doing so well or need to learn more.
Essentially, a performance appraisal is a way to keep the channels of communication between an employer and an employee open and give everyone a chance to lay their cards on the table.