The Album of the Year is awarded to the artist and the production team responsible for the best compilation of songs released in the past year. More than half of this album must be made up of previously unreleased material and cannot be a "Greatest Hits" or compilation type recording in an effort to avoid giving the same album multiple chances year after year.
The Record of the Year award is given to the best new single of the previous year, based on its complete artistic merits. This can include the performance, production, engineering or mixing of the song. Because of this, the winner of the award does not technically even have to be the performing artist; anyone who takes part in any of these activities on the record can qualify. However, the artist and the above parties often all receive credit by the academy.
Some notable examples illustrating the difference between Album of the Year and Record of the Year include the following:
1968 - Album: "Sgt. Pepper's Lonely Hearts Club Band" by The Beatles
Record: "Up Up and Away" by The 5th Dimension
1984 - Album: "Thriller" by Micheal Jackson
Record: "Beat It" by Micheal Jackson
2004 - Album: "Speakerboxxx/The Love Below" by OutKast
Record: "Clocks" by Coldplay
2010 - Album: "Fearless" by Taylor Swift
Record: "Use Someone" by Kings of Leon
Song of the Year is another award that often causes confusion with Record of the Year. This is presented to a song for its lyrical merits rather than its performance and production. The award's recipient is the songwriter rather than the performers or producer although often the performing artist has been the songwriter as well. An example of this difference is the 2007 winning song "Jesus, Take the Wheel" performed by Carrie Underwood. While she won an award in the female country performance category, Brett James, Gordie Sampson & Hillary Lindsey won in the Best Country Song Category.
The academy hands out many other awards each year at the Grammys in a multitude of categories. It also includes numerous genre specific awards in country, rap and other categories as well as awards for production and technology advances in recording science.