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Needs for the Performance appraisal:
1. Provide information about the Performance ranks on which decision regarding salary fixation, conformation, promotion, transfer and demotion are taken.
2. To prevent grievances and in disciplinary activities.
3. Provides information which helps to counsel the subordinate.
4. Provides feedback information about the level of achievement and behaviour of subordinate.
5. Provides information to diagnose deficiency in the employee regarding skill, knowledge, determine training and developmental needs and to prescribe the means for the employee's growth provides information for correcting placement.
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Effective HRM depends upon sound reward system
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