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A performance appraisal, or evaluation, is a manager's review of an employee's performance, identifying strengths and weaknesses for improvement. Modern evaluations focus on employee growth and development, in addition to raises and promotions. One successful method is Management by Objectives (MBO), where employees and managers collaboratively establish clear objectives at the year's start. The year-end appraisal compares outcomes against these goals, promoting clarity and employee empowerment, though it may overlook non-goal-related successes. The rating scale is another common evaluation type used in performance appraisals.