In order for an organization to grow, it is important for each person who works there to get and stay on track to career success. Towards that end, an annual appraisal process evaluates each employee’s performance and growth and provides feedback, guidance, and direction for development.
Note that assessing and providing feedback on performance and growth is best managed as a completely separate process from assessing and revising salary. Once salary is part of the discussion, nothing else matters to the employee. That is why it is best left for a later, separate discussion.