Use of the performance appraisals:

1. Performance improvement: Performance feedback allows the employee, manager, and personnel specialists to intervene with appropriate actions to improve performance.

2. Compensation adjustments: Performance evaluations help decision makers determine who should receive pay raises. Many firms part of all of their pay increases and bonuses based upon merit, which is determined mostly through the performance appraisals.

3. Placement decisions: promotions, transfers, and demotions are usually based on past or anticipated performance. Often promotions are reward for past performance.

4. Training and development needs: poor performance may indicate the need for retraining. Likewise, good performance may indicate untapped potential that should be developed.

5. Career planning and development: performance feedback guides career decisions about a specific career path one should investigate.

6. Staffing process deficiencies: good or bad performance implies strengths or weakness in the specific career paths in the personnel department's staffing procedures.

7. Information inaccuracies: poor performance may indicate errors in the job analysis information, human resource plans, or other parts or the personnel management information system. Reliable on inaccurate information may have led to inappropriate hiring, training, or counselling, decisions.

8. Job design errors: poor performance may be a symptom of ill - conceived job designs. Appraisals help diagnose these errors.

9. Equal employment opportunity: sometimes performance is influenced by factors outside the work environment, such as family, financial, health, or other personal matters. It uncovered through appraisals, the human resource department may be able to provide assistance.

10. Feedback to human resources: good / bad performance throughout the organization indicates how well the human resource function is performing.