Performance Management vs Performance Appraisal
The terms 'performance management' and 'performance appraisal' are sometimes used as synonymous, but they are different. Performance management is a comprehensive, continuous and flexible approach to the management of organisations, teams and individuals which involves the maximum amount of dialogue between those concerned. Performance appraisal is a more limited approach which involves managers making top-down assessments and rating the performance of their subordinates at an annual performance appraisal meeting.
Performance appraisal |
Performance management |
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Top-down assessment |
Joint process through dialogue |
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Annual appraisal meeting |
Continuous review with one or more formal reviews |
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Use of ratings |
Ratings less common |
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Monolithic system |
Flexible process |
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Focus on quantified objectives |
Focus on values and behaviours as well as objectives |
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Often linked to pay |
Less likely to be directly linked to pay |
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Bureaucratic - complex paperwork |
Documentation kept to a minimum |
|
Owned by the HR department |
Owned by line managers |
We have worked with some of the most advanced organizations in terms of Performance Management
Most organizations have some type of employee appraisal or review system and are experiencing the shortcomings of manual Appraisal systems. In talking about Employee Performance Management, the question we are asked most often is “what is the difference between Appraisal systems and Performance Management”
Following is a process diagram that provides a graphical view of the major differences between the two processes:
- A definition of what you want an employee to do for the next performance period (normally the next quarter, half year or full year). The definition includes specific objectives for the period, backed up by a job description which includes the normal expectations for that position
- A review of remuneration/bonuses if these objectives are met
- A review of the personal development objectives
- Formally Performed quarterly, half yearly or annually but with input all year round
- Typically fully automated where the information is accessible to all participants at any time
- Content rich if the automated Performance Management system has features such as a Performance Diary