Objectives of Performance Appraisal

by Shane Thornton; Updated September 26, 2017

The key purpose of a performance appraisal is to objectively measure what an employee does at work. A successful performance appraisal measures an employee’s value to an organization and provides guidelines to improve the current performance and potential of the employee.


A performance appraisal is a powerful tool that gives managers the opportunity to reprimand, reward, and improve employee performance. Performance appraisals should reflect the organization's goals and focus on the employee’s contributions towards those goals. Human capital is the most important resource any organization has, and performance appraisals should show employees that upper management is invested in developing them to their full potential.


Performance appraisals are a complex, time consuming managerial process.

The “performance appraisal process consists of three stages: planning, managing, and appraising” according to the Employee Performance Appraisal Program of North Carolina State University.

The planning stage requires a meeting between the employee and his supervisor; this meeting is the foundation of the appraisal process because it outlines job requirements and expectations.

The managing stage requires close monitoring of employees to obtain and record information about the employee’s performance.

The purpose of the appraising stage is to transform the data into constructive, useful feedback that can improve the employee’s success on the job. The appraising stage also determines what training and development is needed to improve job performance.


The main objective of performance appraisals is to review employee performance over a certain period of time. There are many other important objectives of performance appraisals, as naukrihub.com notes: identify and close the gap between current and desired performance, improve management’s organizational control, improve the working relationship between management and their subordinates, give insight into the necessary training and development, provide impartial information to base promotion or pay raise decisions on, and clarify job responsibilities.


There are many different types and methods used for performance appraisals. The most common methods include straight ranking, paired comparison, grading, and free response. The straight ranking method requires the supervisor to rank all employees with the same job responsibilities from best to worst. The paired comparison method of performance appraisals is similar to the straight ranking method. Employees are ranked from best to worst, but through a systematic process of comparing every employee to every other employee, determining who is superior, and developing a ranking system. The grading method evaluates performance based on certain predetermined categories with each category receiving a separate grade. A free response, or essay method, is the most subjective method because it allows managers to write anything on the performance appraisal.


When providing feedback to an employee, it must be done with a certain sense of caution and sincerity; the purpose is to improve performance, not to upset or discourage the employee. Employees may have a difficult time utilizing the feedback if management doesn’t recognize or appreciate any of their positive contributions to the organization.

About the Author

Shane Thornton has published business-related on eHow.com. In addition to business, his other areas of interest include sports, traveling and entertainment. He earned a Bachelor of Science in Business management from Arizona State University’s W.P. Carey School of Business.

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