What is the purpose of performance reviews?

The purpose of performance reviews primarily revolves around the evaluation of employee performance and the establishment of future goals. Through performance reviews, managers assess how well employees have met their objectives and contributed to the organization over a certain period. This evaluation allows for constructive feedback, recognizing achievements, and identifying areas for improvement.

Setting future goals is a crucial component of this process, as it aligns individual objectives with the organization's strategic direction and helps employees understand what is expected of them moving forward. Additionally, these reviews serve as an opportunity for open communication between employees and management, fostering development and motivating employees to enhance their performance.

The other options do not align with the broader objectives of performance reviews. Eliminating underperforming employees is a potential outcome but not the main purpose, as performance reviews should focus on development rather than solely dismissal. Creating opportunities for promotions without evaluation undermines the integrity of the review process, which should fairly assess performance before any advancement. Lastly, assessing compatibility with management is not a central purpose of performance reviews, as their primary function is to focus on employee performance and goal setting rather than compatibility or interpersonal dynamics.