What function does the performance appraisal serve in relation to resource allocation?

The performance appraisal plays a crucial role in assessing employee effectiveness, which directly impacts resource allocation. By evaluating an employee's skills, contributions, and performance, management can make informed decisions about promotions, salary adjustments, training needs, and team composition. This assessment helps identify high-performing employees who may warrant additional investment, such as leadership training or specialized development programs, thereby ensuring that resources are allocated to those who contribute most effectively to the organization's goals. In turn, this process supports overall organizational performance and productivity.

While accurate feedback, discouraging promotions, and managing disciplinary procedures are important aspects of performance appraisals, they do not directly relate to the core function of ensuring that resources are allocated based on performance assessments. The emphasis of the performance appraisal on measuring effectiveness makes it critical for strategic resource management within an organization.