There are mainly two objectives or aims of performance appraisal they are:

1) Administrative objectives

2) Self improvement objectives

1) Administrative objectives: these objectives are further divided into five parts

i) Promotion: it is one of the main aims of performance appraisal. It is beneficial for both the management and the employee to promote the employee to the place where they can show their abilities effectively.

ii) Transfer: in an organization the management has to take the decisions regarding the transfer of the employees which may be due to unsatisfactory performance of the employee or due to the economic conditions of the organization but these actions are suitable if they are based on the performance appraisal of the employees.

iii) Wage and salary administration: the performance appraisal reports helps in the wage and salary administration of the employees.

iv) Training and development: performance appraisal is helpful in finding out the employees who need training to do their job properly while it is also helpful in developing the employees for higher positions.

V) Personnel research: performance appraisal reports help the management in the personnel research and also to find out the reason of their performance.

2) Self improvement: the performance appraisal helps in finding out the abilities of the individual. It helps in human resource development and to prepare oneself for the particular job.

The above are the two objectives of performance appraisal.