Proper performance appraisal helps in understanding the training needs; in motivating the employees, in giving feed back to the employees and to the organizations with a respect to performance and training needs of an employee. Proper performance appraisal system helps in granting pay arises as well as promotions.
The performance appraisal system in order to be effective demands performance interviewing and counseling. These are the two major areas where an industrial psychologist draws on his training and the skills, He may also have to train other managers in these areas.
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