Explain the importance of performance appraisal.

Significance of performance appraisal:

This is helpful in operational decisions of personal management relating to pay raises, promotions, transfers and.

It gives clues to management for effecting improvements in placement of employees and selection procedures.

On the basis of performance appraisal, the top management can direct or advise the personnel department to design and implement appropriate training programmes.

It stimulates and guides employee development

It encourages healthy competition between employees.

This seeks to discover the potential for development in employees and therefore helps management to prepare promising employees to take up challenging jobs into future.

It attracts fine personnel to the organization

Throughout the process of performance appraisal, the management finds an idea of the difficulties faced by the employees whereas working on the jobs. Management can take accordingly take suitable steps to redress their grievance.

It highlights a requirement for more competent supervisors, to undertake the task of judging the employees in an intelligent and objective manner.

Performance appraisal seeks to estimate employees' performance in a systematic way.