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Performance appraisals are employed to determine who needs what training , and who will be promoted, demoted, retained, or fired. Dictionary Term of the Day Articles Subjects. Business Dictionary. Toggle navigation. Uh oh! You're not signed up. Close navigation.
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Performance appraisal systems help organizations justify their employment decisions. The system may consist of more than just an annual performance review. A robust appraisal system might include an annual review as well as spot rewards, commendations and disciplinary processes. The purpose of a basic performance appraisal system is to recognize and sustain strong performance and motivate employees to improve in areas where their job performance fails to meet the company's standards. A performance appraisal system recognizes and rewards employees who meet or exceed your company's expectations. Performance appraisal systems also identify areas where marginal employees can improve their skills and knowledge.