1.Performance feedback:Actual performance and standard performance are compared to identify deficiencies. Strength and weakness of each employees is known and that are communicated to them as feedback.
2.Reward management:An equatable performance appraisal should be established. Employees performing best performance should be rewarded whereas below standard should be sent for development.
3.Training and development decision:Performance deficiencies are identified by performance appraisal.This helps determining training and development needs.employees performing bellow standard are suggested for development.
4.Validation of selection text:Performance appraisal results can be compares with the scores of selection test to find out the validation of selection tests.
5.Policy formulation:Policies related to performance appraisal, training,promotion, transfer, management development etc can easily be formulated with the help of performance appraisal.
6.Proromotion,transfer:Outstanding and promising performance should be promoted for higher position. Sometimes, to fit employees and job, they have to be transferred where as very low performer should be terminated.