Peer assessment can benefit students by causing them to evaluate the work of their peers. Evaluation is a higher order thinking skill, and requiring students to evaluate the work of others can enhance their learning experience. Other benefits are student involvement in the assessment process and the fact that they will receive more than just instructor feedback.
When used in conjunction with communication tools, peer assessment has the potential to encourage a learning community. This is particularly useful when students are studying in the Moodle environment, but physically separated from each other.
Note
The Workshop module—a core Moodle module, was the first contributed Moodle module. It brought peer assessment to Moodle, exemplifying the constructivist nature that has driven Moodle development over the years. However, in recent years, the Workshop module has not been maintained, and is disabled by default in Moodle. The Workshop module is currently being revived...