Explain what is meant the term performance appraisal - Leaving Cert Business - Question A (i) - 2010

Benefits for a business include:

1. Opportunity to review rewards (benefits structures): Performance appraisals help in determining pay increases or promotions. They allow businesses to review and reduce the costs of rewards and benefits packages such as pension schemes.

2. Increased productivity: Performance appraisals are vital for staff motivation, attitude, and behavior development. They assist in fostering a positive relationship between management and staff, leading to greater productivity.

3. Overtime Costs may be minimized through increased productivity during normal time, reducing overlaps between departments that can lead to duplication of work.

4. Retain the right staff / identify poorly performing staff: Performance appraisals help identify talent and ensure that employees are retained and guided towards achieving business goals and objectives by identifying those not reaching their potential.

5. Industrial relations: Appraisals can help mitigate conflicts in the workplace by highlighting performance issues. This enables the business to solve problems between management and employees, improving workplace relations.

6. Hidden strengths/delegation: Through performance appraisal, businesses can identify hidden strengths within employees, which can be leveraged for the growth of the organization.

7. Selection and Training: Appraisals inform businesses if too much or too little training is being delivered, allowing adjustments to reduce training costs.

8. Planning: Performance appraisals assist in financial planning by providing stability to planning, as businesses can forecast and budget more effectively.