What is the primary purpose of a performance appraisal?

What is the primary purpose of a performance appraisal?

• A. To determine hiring decisions.
• B. To evaluate employee performance and provide feedback on performance and inform promotions, development, and compensation decisions.
• C. To measure market performance.
• D. To set departmental budgets.

Answer: (B)

A performance appraisal is a formal process for evaluating an employee’s job performance over a set period and providing feedback. Its main purpose is to evaluate how well the employee meets performance standards, offer constructive feedback, and use the results to inform decisions about promotions, development, and pay. This helps guide development plans, align efforts with organizational goals, and support career growth. It isn’t about hiring decisions, measuring market performance, or setting departmental budgets, which are separate functions.

A performance appraisal is a formal process for evaluating an employee’s job performance over a set period and providing feedback. Its main purpose is to evaluate how well the employee meets performance standards, offer constructive feedback, and use the results to inform decisions about promotions, development, and pay. This helps guide development plans, align efforts with organizational goals, and support career growth. It isn’t about hiring decisions, measuring market performance, or setting departmental budgets, which are separate functions.