Performance appraisal is the process of evaluating an employee's job performance and providing feedback to help them improve. There are traditional methods like paired comparisons, rating scales, and forced distribution as well as modern methods like assessment centers, management by objectives, and behavioral anchored rating scales. Performance appraisal involves setting goals, defining targets, reviewing performance, and providing feedback. It is used by companies to evaluate effectiveness and provide a full 360 degree review from supervisors, peers, direct reports, and others.