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The Objectives of Appraisals and Management Decisions

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Appraisal can be described as the process of reviewing employee performance, documenting the review, and delivering it to the employee in the form of feed back.It is one of the phases of the performance management cycle. appraisals, sometimes called performance reviews, are one of a number of performance management tools that aim to ensure employees” performance contributes to business objectives, and should be used as part of a holistic approach to managing performance. The value of annual performance appraisals has increasingly been challenged in recent years in favour of more regular“performance conversations”.


  2. Superiors may use performance appraisal information to manage the performance of their employees. Appraisal data will reveal the employees weaknesses and the managers can easily identify them while setting standards and advise the employee accordingly.Besides the managers can also programme incentives in such a manner that the employee is motivated and his performance is enhanced for performance, incentives, bonus, rewards, commissions etc

  4. The information obtained from appraisals is also used for internal staffing or promoting the individual. Most organisations do believe in the policy of promotions from within.

  6. Most organisations use the data obtained from performance appraisal to determine employees needs for training or development. Most companies like microsoft, IBM, Honeywell etc use the data for training their employees.

  8. Information obtained from the appraisal is usually conveyed to the employees in the form of feedback and counselling is offered to the employees about their performance levels.This process is usually beneficial to the employees in identifying their performance weaknesses and modifying them.

Advantages of Appraisal

It is said that performance appraisal is an investment for the company which can be justified by following advantages:

  1. Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.
  2. Compensation: Performance Appraisal helps in chalking out compensation packages for employees. Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to a performance. Compensation packages which includes bonus, high salary rates, extra benefits, allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit rather than seniority.
  3. Employees Development: The systematic procedure of performance appraisal helps the supervisors to frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so that new jobs can be designed for efficient employees. It also helps in framing future development programmes.
  4. Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of the selection procedure. The supervisors come to know the validity and thereby the strengths and weaknesses of selection procedure. Future changes in selection methods can be made in this regard.
  5. Communication: For an organization, effective communication between employees and employers is very important. Through performance appraisal, communication can be sought for in the following ways:
  • Through performance appraisal, the employers can understand and accept skills of subordinates.
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  • The subordinates can also understand and create a trust and confidence in superiors.
  • It also helps in maintaining cordial and congenial labour management relationship.
  • It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.

  • Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of employees, a person’s efficiency can be determined if the targets are achieved. This very well motivates a person for better job and helps him to improve his performance in the future.
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