What is the importance of performance appraisal system?
Performance appraisal is defined by Wayne Cascio as “the systematic description of employee’s job relevant, strength, weakness.
⦁ Feedback to the employee :-
Performance appraisal is beneficial because it provides feedback to the employee about his performance. It identifies the areas for improvement so that employee can improve itself.
⦁ Training and development :-
Due to performance appraisal it is easy to understand what type of training is required for each employee to improve himself accordingly training programs can be arranged.
⦁ Helps to decide promotion :-
Performance appraisal provides a report about the employee. Based on this report future promotions are decided, incentives, salary increase is decided.
⦁ Validation of selection process :-
Through performance appraisal the HR department can identify whether any changes are required in the selection process of the company normally a sound selection process results in better performance and positive appraisal.
⦁ Deciding transfers and lay off of the worker :-
Employee with specific talent can be transferred to places where their talents are utilized properly; similarly decisions regarding termination of employees depend upon performance appraisal reports.
⦁ Human resource planning and career development:-
Companies can plan for future vacancies at higher levels based on performance appraisal reports. Similarly career planning can be done for the employee on the performance appraisal report.
