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ACCA Applied Knowledge · Business and Technology · Review and appraisal of individual performance

Which of the following is generally regarded as a primary purpose of a formal performance appraisal system within a business?

A key purpose of formal performance appraisal is to identify employees' training and development needs. By comparing actual performance with agreed objectives, managers can see skill gaps and plan development. It supports, but does not replace, supervision, and has no role in setting strategy or pricing.

  1. ATo identify employees' training and development needsCorrect
  2. BTo replace the need for day-to-day supervision
  3. CTo set the organisation's long-term corporate strategy
  4. DTo determine the market price of the firm's products

Explanation

Appraisal reviews past performance against objectives, which highlights skill gaps and so identifies training and development needs. It does not replace supervision, set corporate strategy or determine product prices.

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