14.

2 Objectives/Purpose
1. Feedback: Performance appraisal is an important way of providing feedback to the employees.
An employeeshould deservetoknow how helshe is pertormingand what needs to be corrected.
Agood performance appraisal is a2 waycommunication where not only feedback is provided
to the employee but an employee is also given a chance to give his/ her input.
2. Development: Performance appraisal data gives valid input for coaching, counselling, career
planning, training and development, transfer, promotion etc. Basedontheperformance ofemployees
and reasons of such performance helps in dedngg whether an employee should be promoted or
not, whether the employee requires coaching or counselling or training and development.
3. Documentation: an age old and very important aspect of human resource management is legal
requtrements, Aperformance appraisal generates alot ofdocumentary proof that can be used
by the organizatior for legal battles involving employees and the organization. For instance, an
employee is demoted or transferred and he sues the company, then in that case company can
use this documentary proof tó save itself of the legal effects.
4. Test the effectiveness of recruitment, selection-and-placement: The job of an HR is not
it's equallyimportant to keep a check on the performance
complete once employees are hired,
decision, and in that case requisite
of the employee. Some, employees.may.not.begood selection goodperformance
action needs to be taken, which can only be ascertained bya appraisal.
5. Motivation Tool: Companies whichhave goodperformancefor appraisal systems provide financial
and non-financial benefitsQver.and.above the standards set the jobs, these benefits motivate
the employees to performwell. above normal
6. Goodwill: Companies that are known in the market for compensating over and
performance have a goodwill in market and therefore talent wants to work in such companies
thus, the company can easily attract, retain and motivate such employees.