If there is no Performance appraisal process in an organization, then the annual appraisals are happening on an ad-hoc basis and based on perceptions and informal feedbacks, the mechanism would be what the manager thinks of the resource as of yesterday. whereas when the performance appraisal process is in place the managers impression would be averaged out on the basis of a longer duration.
The business scalability depends a lot on the Performance appraisal process of an organization. The more effective the PA process, more ready is the organization to handle dynamics related to opportunities and the skill set that the opportunity demands.
it will explain and validate ratings and provide specific suggestions for improvement and development.
it will identify the strenths and areas that need development.
it will determine if employee has achieved from previous year.
it will give a change for both the employee and evaluator to discuss on some certain issues.