- It helps the management to appraise the performance of the personnel, which of immense help to the running of the organization.
- It is helpful to the management to rate all the personnel on the same method of measurement.
- It forms a scientific basis for management decisions like increase in pay, transfer, promotion, etc.,
- It provides the personnel with information relating to their strong and week points. This provides and incentive to the personnel to improve there performance.
- It serves as an guidance for the management to consider the types of training, which should be imparted to the personnel.
- It helps the management in the proper placements of the personnel.
- It will help in preventing the grievances of the personnel, if it is conducted scientifically and systematically.
- It provides job satisfaction to the personnel, and there by, improves the morale of the personnel.
- The records of performance appraisal will be available permanently, and there will protect the management against subsequent charges of discrimination.
- It helps management to ensure that the personnel or assigned jobs for which they are best suited.
- It helps to evaluate the suitability of the selection policy and procedure of the organization
- It helps to evaluate the suitability of the training and development methods adopted by the concern
- It helps in improving the employer-employee relations.
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