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This question is about careers.
Self-assessment is important because it is crucial for self-improvement. If you cannot recognize that there are changes that need to be made, it is almost impossible for any positive improvements to be made.
During performance reviews, self-assessment is a time for employees to self-reflect and uncover their strengths and weaknesses. From there, they can make plans for making changes to improve themselves. These self-assessments can help the individual and the company as a whole.
As a company works to help improve each of its employees, the company as a whole also improves. You are only as strong as your weakest employee, so when that person grows, the potential of a company grows with it.

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