Does you question mean what is the purpose of performance appraisal?
As far as I can see, PA has 2 main purposes:
1. Reward Management, i.e., increments, promotions, bonus etc, and
2. Development Objectives, i.e. to find the weak areas and improvement opportunities.
Sometimes, one area is more dominant than others. Take for example forced ranking system in performance appraisals. People are placed into particular categories or forced, if you will. The focus in such a case is usually on the disbursement of increments / rewards, i.e. only 50% of the employees will get a 15% raise, the remaining others will get less etc
However, other systems that focus on development will look at the performance appraisals as a learning opportunity. Suppose the performance results of a department are plotted on a graph showing # of average performers, weak performers and good performers. Then the direction of the graph will indicate where you stand. If it leans towards the good side, then you know you are doing well. If it leans towards the weaker side, then you know there may be issues, that will need to be idetified and addressed.
I have also heard of people implementing 360 degree appraisals solely for the purpose of feedback and growth purposes (not for rewards), and run a separate system for rewards.
Hope that answers your question
Regards