To achieve performance, management has to identify organizational goals and act as a navigational tool in helping the organization in achieving them. An effective performance management exercise gleans out the best performers and helps them in achieving performance standards at work. The history of performance appraisal is quite ignominious. Its roots in the early 20th century can be traced to Taylor's Time and Motion studies. As a distinct and formal management procedure used in the evaluation of work performance, appraisal dates from the time of theWorld War II. Performance appraisal is a management tool designed to encourage communications in the office, improve the quality of work produced, and promote individual accountability. This is the concept underpinning the legal requirement that all agencies and corporations look into evaluating employee performance.

Appraisal, as a philosophy, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair and accurate.