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Physicians are becoming more involved in performance management as hospitals restructure to increase effectiveness.Although physicians are not hospital employees, they are subject to performance appraisals because the hospitals are accountable to patients and the community for the quality of hospital services. The performance of a health care professional may be appraised by the appropriate departmental manager, by other professionals in a team or program or by peers, based on prior agreement on expectations. Appraisal approaches vary. They include behavioural approaches such as rating scales, peer rating, ranking or nomination and outcome approaches such as management by objectives and goal setting. Professionals should give and receive timely feedback on a flexible schedule. Feedback can be provided one-on-one, by a group assessing quality of care or through an anonymous survey.