Final answer:
Performance appraisal data is used for employee development and as documentation to support HR decisions. Appraisals provide a comprehensive evaluation from multiple sources through 360-degree feedback and help organizations manage performance and training needs effectively.
Step-by-step explanation:
Organizations utilize performance appraisal data in primarily two ways. Firstly, they use it as a development tool to motivate employees, identify areas for improvement, and determine the effectiveness of training and development programs. Secondly, performance appraisals serve as a documentation mechanism to support decisions regarding compensation, promotions, or terminations based on an employee's job performance and adherence to company standards.
Regarding the use of 360-degree feedback appraisals, an employee's performance is assessed not only by their supervisors but also by peers, customers, direct reports, and the employees themselves, offering a comprehensive view of performance. Industrial and organizational psychologists assist in designing these appraisal systems to be fair, positive, and useful for performance management and training needs assessment.
It is critical for organizations to ensure that performance appraisal results are presented in a format useful to the managers, be it through charts, text, or other means. This helps in making informed decisions that align with the organization’s culture and goals.