The primary functions and objectives of performance appraisal are:
(a) To identify and define the specific job criteria. Many organizations at the beginning of the year set Key Performance Areas (KPAs) or Key Result Areas (KRAs) for employees based on mutual discussions
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(b) To measure and compare the performance in terms of the defined job criteria, KRAs and KPAs are also designed so that it can help in measuring job performance in quantitative or qualitative terms
(c) To develop and justify the reward system, relating rewards to the employees’ performance
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(d) To identify the strengths and weaknesses of employees and to decide on proper placement and promotion
(e) To develop suitable training and development programmes for enriching performance of the employees
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(f) To plan for long-term manpower requirements and to decide upon the organizational development programmes, duly identifying the change areas (for overall improvement of the organization)
(g) To identify motivational rein-forcers, to develop communication systems and also to strengthen superior-subordinate relationships
Objectives:
(a) A performance appraisal system tries to serve various purposes and attain a number of objectives. The major objectives of performance appraisal system may be classified as remedial, developmental, innovative and motivation.
(b) Developmental objectives stimulate the growth of the employees both in their present and future jobs. Thus, it identifies training and developmental needs, ensures placement and promotion, etc.
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(c) Innovative objectives are for discovering ways to deal with a new job and also to identify and develop better ways for existing jobs.
(d) Motivational objectives are for rewards, motivation and effective communication and also for better interpersonal relations.