Who is in the best position to observe and evaluate an employee's performance for the purposes of a performance appraisal?

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Performance management is the process businesses use to ensure productive employee activities and results. The business tries to incentivize actions that are in line with the organization's objectives.
 

Effective performance management systems typically include the following three broad components: goal setting, performance review and a performance improvement plan.


Who is in the best position to observe and evaluate an employee's performance for the purposes of a performance appraisal?