The most likely reason for the adoption of appraisal of employees is to draw attention to present performance in the job in order to (a) reward people fairly and (b) identify those with potential for promotion or transfer.
Today, throughout the world, performance appraisals play an integral part in making a variety of critical decisions in the management of human resources. The order of importance among these uses is, from most to least-
1. Salary administration
2. Performance feedback
3. Identifying individual strengths and weaknesses
4. Documenting personnel decisions
5. Recognizing individual performance
6. Identifying poor performance
7. Assisting in goal identification
8. Making promotional decisions.
9. Retention or termination of personnel
10. Evaluating goal achievement.
We have seen the various reasons why performance appraisal in so important in the HR functions organizations and some form of prioritizing on the uses of appraisal of person’s performance. This is not all. One of the key areas why performance appraisal is so diligently carried out by managers is the productivity of people in jobs.
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