What are the major purposes of performance appraisal

What are the major purposes of performance appraisal? In what ways might these purposes be contradictory?

The correct answer and explanation is:

Major Purposes of Performance Appraisal

Performance appraisal serves several key purposes in organizations, including:

1. Evaluation – Measuring employee performance to determine strengths, weaknesses, and overall contributions.
2. Development – Identifying areas for improvement and providing feedback to enhance skills and performance.
3. Compensation Decisions – Determining salary increases, bonuses, and promotions based on performance.
4. Motivation – Encouraging employees by recognizing their achievements and setting goals for growth.
5. Succession Planning – Identifying high-potential employees for future leadership roles.
6. Legal Documentation – Providing records that justify employment decisions, reducing legal risks.

Contradictions in Performance Appraisal Purposes

While performance appraisals aim to improve both individual and organizational success, some of their purposes may conflict:

1. Evaluation vs. Development – If employees feel their performance review is primarily used for evaluation, they may hesitate to share weaknesses or seek feedback for development. This reduces the effectiveness of coaching and training opportunities.
2. Compensation vs. Fairness – When performance appraisals determine salary increases, managers may struggle to balance objective assessments with the pressure to maintain workplace harmony. Subjective factors can lead to favoritism or bias.
3. Motivation vs. Stress – While appraisals can motivate employees, they may also cause anxiety and stress if feedback is too critical or if the process is perceived as unfair.
4. Legal Documentation vs. Honest Feedback – Managers may avoid giving direct, honest feedback to prevent legal disputes, leading to ineffective evaluations that don’t help employees improve.

To minimize these contradictions, organizations should design appraisal systems that balance fairness, transparency, and employee development.

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