Performance appraisals are an important tool in performance management that allow managers and employees to discuss performance, development, and goals. The appraisal should be a two-way conversation where both parties can freely exchange views. While appraisals typically review past performance, they are most effective when used to create development plans and agree on future improvements. Performance management is a broader, more strategic process that brings together many activities, including appraisals, to effectively manage individuals and teams toward organizational goals. Appraisals alone do not constitute full performance management.