Skip to content

ACCA Applied Knowledge · Business and Technology

Review and Appraisal of Individual Performance for ACCA BT

Performance appraisal is the formal, regular review of how well an employee is doing against agreed objectives. It identifies strengths, gaps and development needs. To answer BT questions, name the purpose, match the method to the situation, spot the flaw in the process, and link results to reward, training or discipline.

What this chapter covers

This chapter covers how an organisation reviews the work of its people. You learn why appraisal exists, the main methods used, how an appraisal interview should run, what goes wrong, and how results feed into pay, training and discipline.

It sits in the people management part of Business and Technology, alongside recruitment and selection, training and development, and motivation. Appraisal is the point where those topics meet. Objectives set for a person link to organisational goals. Gaps found in appraisal lead to training. Good performance can lead to reward and promotion.

The content is practical and descriptive, with no calculations. BT is an objective test, so you will meet it as multiple choice, multiple response and short scenario tasks. Questions usually ask you to identify a purpose, a method, a bias or the best next action.

Appraisal is a clear, low-calculation area where careful reading earns marks. BT Section A has many one-mark and two-mark questions, and definitions, methods and biases suit that format. The ideas also appear in Section B scenarios on people management, where you must apply them to a named situation. Because the topics link to motivation, training and ethics, understanding this chapter helps you answer questions in other chapters too.

Review and appraisal of individual performance: topics in the order to study them

  1. 1Purpose and Process of Performance AppraisalStart here because every method, problem and link to reward depends on knowing what appraisal is for and how the cycle runs.
  2. 2Appraisal Methods and TechniquesOnce you know the purpose, you can judge which method fits it, such as ratings, objectives-based or 360-degree feedback.
  3. 3Appraisal Interviews and Giving FeedbackThe interview is where the method is put into practice, so learn it after the methods themselves.
  4. 4Problems and Limitations of AppraisalYou can only spot flaws such as bias or poor objectives once you understand how appraisal should work.
  5. 5Linking Appraisal to Reward, Training and DisciplineFinish with outcomes. This ties the chapter to motivation, training and employment topics elsewhere in the paper.

How to prepare Review and appraisal of individual performance

This chapter is mostly about understanding and applying ideas, so study it in short sessions you can do on your phone, then test yourself with objective questions.

  1. Read the purpose and process topic and write a one-line summary of each stage of the appraisal cycle in your own words.
  2. List each appraisal method with one strength, one weakness and one situation where it suits best. Keep the list short enough to review in two minutes.
  3. Picture an appraisal interview. Note what the manager should do before, during and after it, and what a poor interview looks like.
  4. Learn the common appraisal biases by name and attach a one-line example to each, so you can recognise them in a scenario.
  5. Make a simple chain: appraisal result, then the action it triggers, whether reward, training or disciplinary steps. Practise choosing the right action for a given result.
  6. Do objective test questions on the chapter. For every wrong answer, write why the right option fits and why yours did not.
  7. In the last review, read the quick revision points and re-answer any questions you got wrong.

Common mistakes in Review and appraisal of individual performance

  • Treating appraisal as only a way to decide pay.

    Fix: Remember appraisal also covers development, training needs, motivation and planning. Pick the purpose that matches the wording of the question.

  • Mixing up appraisal methods in scenario questions.

    Fix: Tie each method to a short example, such as feedback from several sources for 360-degree appraisal, and check which fits the scenario.

  • Confusing different appraisal biases.

    Fix: Write one concrete example for each bias and match the behaviour described in the question to it.

  • Choosing disciplinary action for any poor result.

    Fix: First ask whether the cause is a skills gap, unclear objectives or misconduct. Training often fits a skills gap, while discipline suits misconduct or repeated failure after support.

  • Describing an interview as the manager telling the employee the rating.

    Fix: Remember a good interview is two-way. The employee gives views, and both agree actions and objectives.

  • Ignoring the exact wording in multiple response questions.

    Fix: Read how many answers you must choose, then check each option separately against the question before selecting.

Last-day revision: Review and appraisal of individual performance

  • Appraisal is a formal, regular review of an employee's performance against agreed objectives.
  • Main purposes: assess performance, identify training needs, support development, inform reward and promotion decisions, and improve motivation.
  • The process is usually a cycle: set objectives, monitor performance, review, give feedback, agree actions, then repeat.
  • Appraisal should be linked to organisational goals so individual effort supports strategy.
  • 360-degree feedback gathers views from managers, peers, subordinates and sometimes customers.
  • Objectives-based appraisal reviews results against targets, and good targets are clear and measurable.
  • Rating scales are quick and easy to compare but can be subjective.
  • A good interview is planned, two-way, specific and focused on evidence rather than personality.
  • Feedback should be timely, balanced and lead to agreed actions.
  • Common biases include the halo effect, central tendency, leniency, severity and recency.
  • Appraisal can fail if it is rushed, seen as a ritual, or if managers lack training.
  • Results may feed into reward, training plans, promotion or, where needed, disciplinary action.

Review and appraisal of individual performance practice questions

Review and appraisal of individual performance in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Review and appraisal of individual performance: frequently asked questions

Is this chapter calculation-based in the ACCA BT exam?

No. It is descriptive, so you need to know terms, methods and how to apply them. Questions are usually objective test items or short scenario tasks.

What is the difference between appraisal and performance management?

Appraisal is a formal review at set points. Performance management is the wider, ongoing process of setting goals, supporting staff and reviewing results throughout the year. Appraisal is one part of it.

Which appraisal method should I choose in an exam scenario?

Match the method to the facts. If the question stresses results against targets, think objectives-based. If it mentions views from several people, think 360-degree feedback. Always check the stated purpose before choosing.

How should I revise this chapter quickly on my phone?

Use the quick revision points and a short list of methods and biases with one example each. Then answer a few objective questions and review every error.