The system of staff appraisal and performance-related pay (PRP) follows that of the Northern Ireland Civil Service (NICS). In addition, the work of the Director and staff is regularly reviewed at meetings of the Management Committee and Board of Governors, and undergoes continuous scrutiny and peer review through grant applications, the preparation of final reports, publication of research findings, and the presentation of material at scientific meetings and conferences. The work of the Observatory as a whole is reviewed periodically at meetings between the Director and the DCAL (e.g. through reviews of the Annual Report, and the annual Operational Plan) and at least annually by senior management and the Board of Governors. The performance of the Observatory is also assessed externally at slightly longer intervals, for example through the Quinquennial Review process and participation in the UK Research Assessment Exercise (RAE), held in 1992 and 1996 and again in 2001.
The results of the RAE give the DCAL and the Observatory's external partners, notably UK charities and the research councils, information upon which to base their funding allocations. They also provide a comparative scale against which the Observatory can gauge its performance relative to the approximately 190 UK universities and research institutes involved in the RAE, and the 50 or so UK university departments that submitted returns to the Physics Unit of Assessment (UoA 19) in 2001.
In previous RAE exercises (1992 and 1996), staff at the Observatory achieved a Grade 4 in the Physics Unit of Assessment on a seven-point scale 1-5*, with 5* the highest. In the 1996 RAE this grade corresponded to ``Research quality that equates to attainable levels of national excellence in virtually all sub-areas of activity, possibly showing some evidence of international excellence, or to international level in some and at least national level in a majority.'' In recent years, and especially during the year under review, the Observatory has sought to place itself in the best possible position to make a strong submission to the 2001 RAE, seeking to maintain (or possibly improve) its present high grade. The Observatory is an independent research institute and selects 100% of its eligible staff for assessment.
Towards the end of 1999 the DCAL announced its intention to review the position of Director of the Observatory as part of a wider review of the positions of Chief Executives and Directors in the DCAL sector, and to commission a wide-ranging strategic review of both the Armagh Observatory and the Armagh Planetarium. The reviews were carried out by the Business Development Service (BDS), a branch within the Department of Finance and Personnel (DFP). The purpose of the Strategic Review was to review and report on: (a) the effectiveness of the Strategic Planning System; (b) the effectiveness of operational performance, including the relationship between the Armagh Observatory/Planetarium and the Department; and (c) the effectiveness of the organizations' Financial Performance, including arrangements to bid for funds and mechanisms to demonstrate value for money (VFM). A draft version of the report was presented to the Observatory in June 2000, and the final copy was received in October 2000.
The principal recommendations in the report, identified here by their number () in the report's Summary Recommendations include: (A) the need for the Observatory and Planetarium to maintain separate strategic and business planning processes , while examining how each can benefit from the other through interaction and partnership ; (B) that both organizations should remain under the auspices of the DCAL ; (C) that the DCAL should develop a Management Statement with the Observatory and Planetarium  and discuss and agree funding arrangements ; (D) that clear mandates for both the Observatory and Planetarium should be developed , with the aims and objectives of both organizations being aligned to those of the DCAL; (E) that the Financial Memorandum should be reviewed , and VFM and key financial and performance measures should be defined and agreed ; and finally (F) that a clear Strategic View and a clear forward strategy will be the key to the long-term success of both organizations.