Performance appraisal is a process for evaluating how well an employee is carrying out their job. It is important for recognizing employee skills and abilities, providing feedback to improve performance, and boosting employee morale. The process involves planning goals, monitoring progress, reviewing work done, and rewarding good performance. Traditional methods include rating scales, observations, and essays, while modern methods use 360 degree feedback, behaviorally anchored rating scales, and assessment centers. Latest trends focus on continuous feedback and evaluating employees' critical contributions, especially with more remote working.