In the planning stage goals are set to help measure the employee's work time to see if they are able to maintain the goals set or reach new goals. Monitoring is the phase in which the goals are looked at to see how well one is doing to meet them. This can also be a feedback stage in which employers determine if progress is being seen or not. During the developing stage an employee is supposed to improve any poor performance that has been seen during the time frame one has been working at the company. Generally employee's performance ratings are given out each year. The rating is to summarise the performance based on a number system to determine where on the scale a person is. At the end of the cycle is rewarding stage. This stage is designed to reward and recognise outstanding behavior such as that which is better than expected.
Most see employee's performance as a way to appraise the employee for their effectiveness in the company. It is a system designed on individual performance rather than group performance meaning you are looked at for strengths and weaknesses to determine where you might improve. Any issue that might hinder this improvement such as a physical limitation is taken into account to assess the performance you give.
Performance evaluations are looked at for which employees to keep, if you were to get to the crux of the question. The one true meaning is that your evaluation on performance can lead to promotion, remaining in the same position, or termination based on what you did in your job.