Thanks for your responses guys! Some excellent answers were given. To sum it all up:
1. Feedback is great, it helps employees develop and improve themselves.
2. The way feedback is obtained in organizations is broken and somehow it acts as a tool by managers to penalize the employees during their performance appraisals meetings.
3. Feedback has to be given in a very constructive manner so that the receiver actually tries to improve it without feeling bad about themselves.
4. Feedback has to be continuous and we cannot except feedback to be delivered only on yearly or bi-annual basis. Real time, contextual feedback is needed.
5. Feedback not only on tech capabilities is needed but also on interpersonal relationships, management/leadership style, professionalism and much more.
6. Most important of all, feedback is a personal thing. It should be requested by the user himself if the idea is to improve themselves and to improve their performance and in no way it should be related to appraisals.
All this feedback is definitely used for improvement and growth and to make yourself a better professional. I had similar thoughts in my mind when i posted this question. Because my latest project that I posted here(https://news.ycombinator.com/item?id=12142878) and here (https://medium.com/@aliibrahim_36896/story-of-pleasantfish-a...) exactly tries to tackle the discussed problems. This is as we know a not simple problem (and also not easily understandable in the first go) so therefore my solution i believe is far from perfect but to start I have separated feedback from organization level to individual level just for personal growth purposes.
Also, to allow users to grow, i recommend articles/stories to improve those skills.
I would like to thank you all as I have gained valuable feedback information from this thread tech professionals and for growth feedback was a necessary ingredient.