Performance Management Vs. Performance Appraisal

Last updated on December 5th, 2019 at 03:34 pm

Performance Management is a continuous process that aims at planning, monitoring and evaluating the objectives of an employee and his total contribution to the organization. The basic purpose of performance management is to encourage and improve employee’s efficiency and effectiveness.

In this process, both the employees and the managers participate in setting the objectives, assessing the performance or progress, providing training and feedback to the employees at regular intervals for improvement, implementing development programs for employees and rewarding them for their achievements.

Performance Appraisal implies a rational assessment of the performance of an individual, based on pre-determined standards. On the other hand, performance management alludes to the management of performance of the manpower working in an organization. While Performance Appraisal is a yearly system while if we talk about Performance Management, it is a continuous process that does not occur eventually.

What kind of evaluation process is adopted by the organization is one of the biggest questions, as the appreciation and development of employees rely on it? Some employees work silently but does not show himself/herself, while there are also such employees who put up a show but hardly performs. So, the performance appraisal and management play a crucial role, as the success of the organization is combined effort of all the employees and the entrepreneur.

With the help of this process, both the employee and the employer get a chance to set the combined goals of the employee that relates to the ultimate goal of the organization by considering the employee’s performance. In this way, the objectives of the parties became clear that helps to achieve the overall objectives of the organization and the growth & development of the employee as well.

Key Differences between Performance Appraisal and Performance Management

The following are the major differences between performance appraisal and performance management:

1. An organized way of evaluating the performance and potential of employees for their future growth and development is known as Performance Appraisal. The complete process of managing the human resources of the organization is known as Performance Management.
2. Performance Appraisal is a system while Performance Management is a process.
3. Performance appraisal is inflexible, but performance management is flexible.
4. Performance Appraisal is an operational tool to improve the efficiency of employees. However, performance management is a strategic tool.
5. Performance Appraisal is conducted by a human resource department of the organization, whereas managers are held responsible for performance management.
6. In performance appraisal, corrections are made retrospectively. In contrast to performance management is forward looking.
7. Performance Appraisal has an individualistic approach which is just opposite in the case of Performance Management.
8. Performance Appraisal is carried on eventually, but Performance Management is an ongoing process.