Performance appraisal programs
serve many purposes, but in general, those
purposes can be clustered into two categories: administrative
and developmental. The administrative
purposes include decisions about who will be
promoted, transferred, or laid off. Appraisals are
also conducted to make compensation decisions.
Developmental
decisions include those related to
improving and enhancing an individual’s capabilities.
These include identifying a person’s strengths
and weaknesses, eliminating external performance
obstacles, and establishing training needs.