What is meant by performance appraisal

Each individual is appraised separately on:
the progress they have been making in their job
their strengths and weaknesses
their future needs as regards training and development
their potential for promotion
Appraisal from the employee side

Appraisal from the manager side
The management should be fully aware of what the stuff are supposed to be doing and how they are actually doing it. Therefore the appraisal scheme should:

Appraisal from the manager side (cont)
Clarify specific jibs relating them to the objectives of the organization
Develop realistic and appropriate performance standards
Assess competencies
Use feedback and reward to improve performance
Link performance to organizational goals