What is the main purpose of a performance evaluation in an organization?

The main purpose of a performance evaluation in an organization is to assess individual or departmental effectiveness in achieving objectives. This process allows managers to review how well employees are performing in their roles and whether they are meeting the goals set for them. Performance evaluations provide a structured way to measure contributions to the organization, thus enabling management to identify strengths and areas for improvement.

Assessing effectiveness is crucial because it directly influences decision-making regarding employee development, team dynamics, and overall organizational performance. A well-conducted performance evaluation can provide valuable feedback to employees about their work, align their efforts with the organization's strategic objectives, and facilitate open communication about performance expectations.

While factors such as salary increases and training needs may arise as a result of the evaluation, the primary focus remains on judging the effectiveness in achieving established objectives. Establishing company policies and procedures, although essential for organizational structure, does not pertain directly to the function of evaluating individual performance.