Performance Management and performance appraisal

Performance Appraisal vs Performance ManagementComparing performance appraisal vs performance management, performance appraisal sets job standards and evaluates past performance based on such set standards whereas performance management aims at managing performance real-time to ensure performance reaches the desired levels.

  • Performance appraisal and performance management are two employee performance evaluation methods.

    Performance management is the traditional approach to evaluating the performance of an employee. The increased competitive nature of the economy and rapid changes in the external environment has forced many organizations to shift from reactive performance appraisals to the proactive performance management to boost productivity and improve organizational performance.

  • Scope

    Both performance appraisals and performance management entail setting performance targets, reviewing the achievement of targets, and devising ways to enable employees to meet targets. Both these systems establish clear expectations on what an employee is expected to do, set the guidelines on what constitutes successful job performance, and strive to identify barriers to effective performance.

    Performance appraisal is, however, a limited and reactive function of evaluating past performance, undertaken once or twice a year. It is a distinct staff activity with no direct intervention to the employee’s day-to-day work.

    Performance management is a continuous and on-going proactive mechanism to manage the performance of an employee and ensure that the employee achieves the set targets on a real-time basis, without reviews or corrective actions at some point in the future. It is a line activity and remains ingrained in the employee’s day-to-day work.

    In some organizations performance appraisal becomes part of an overall performance management system. The appraisal takes place at periodic intervals and becomes the basis to make corrective actions and set further targets.

  • Approach

    In performance management, the manager of the supervisor assumes the role of a coach or mentor whereas in performance appraisal, the supervisor acts as a judge.

    Some performance appraisal techniques such as Management by Objectives (MBO) allow for joint setting of targets, by the supervisor and the employee, with frequent reviews, and thereby come close to performance management. Such methods, however, still fall short of the real-time management and monitoring of targets offered by performance management.

  • Methodology

    The performance appraisal tends to be more formal and structured. Although most performance appraisal systems allow customization of key performance areas or what constitutes performance based on the employee, the system nevertheless remains rigid with laid down procedures and rating parameters binding on all employees equally.

    Performance management is a comparatively more casual and flexible...

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