The paper reviews the current state of knowledge on peer assessment of performance with special reference to industrial R&D organisations. The authors define the term “peer” and discuss briefly various techniques for assessment (nomination, ranking and rating). The authors review the literature of peer review to show that it can add to the value of assessment and that certain obvious objections to peer rating apply also to supervisory review. Their conclusion is that peer review is a useful adjunct to appraisal, but only if it is completely acceptable to all involved. The conditions for achieving this acceptance are discussed. The paper concludes by showing how peer rating can be used for team development.