One human resource objective for using performance appraisal systems is to determine who should be promoted, demoted, transferred, or terminated. However, these are not the only human resource functions that are related to performance appraisal.
Performance appraisals also can be used to motivate and improve performance. By showing an individual there his or her strengths lie and pointing out areas that still need improvement, an evaluator can help focus an employee’s attention on a course that will produce the most positive benefits additionally reinforcing behaviors that have produced strong positive results should motivate the individual to continue to perform in this manner.
A well-designed performance appraisal systems also can encourage individuals to work together as a team. If this is an organization’s goal, it must face several challenges in designing and implementing such a system. Obviously, the traditional, individual- focused performance appraisal systems are no longer appropriate.
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