Directorate of distance education master of business administration

Objectives 
The objectives of performance appraisal are as follows: 
1. Salary increase 
 
Performance appraisal plays a role in making decision about 
salary increase.  Normally salary increase of an employee depends on 
how he is performing his job.  The hike in salary to different employees 
may be according to their efficiency and ranking. 
2. Promotion 
Performance appraisal plays a role in making decision about 
promotion.  Normally internal promotion of an employee depends on 
how he is performing his job.  There is continuous evaluation of his 
performance either formally or informally.  Most of the organizations 
often use a combination of merit and seniority for promotion. 
Performance appraisal precedes promotion decision.