The terms ‘performance appraisal’ and ‘performance management’ are often used interchangeably. But they are different. Performance management is a continuous, comprehensive and flexible approach to the management of groups, organizations and individuals, involving as many dialogues as possible between the parties involved. On the other hand, performance appraisal is a more limited approach, involving conducting top-down evaluations to assess the performance of their juveniles at annual evaluation meetings. It sets standards and evaluates past performance based on those standards, while performance management is designed to manage performance in real time to ensure that production reaches the desired levels.
Performance management versus Infographics performance appraisal
Performance management and performance appraisal are two methods of employee appraisal. Although evaluation is a traditional method in this regard, increased competition in the economy has forced more organizations to change from reactive to proactive to increase productivity and increase organizational performance.
Companies today are changing dramatically to cope with the changing needs of the business environment. They excel in their business by building flexible capacity for proactive change management. Traditional appraisal systems could not meet the requirements of the changing scenario. As they were mostly used as an employee appraisal mechanism, where managers were often forced to make subjective judgments about employee behavior and performance according to predetermined standards.
The key objective of the performance appraisal system is to monitor employee activities through disciplinary action and to manage promotions and awards. Supervisors are expected to evaluate employees according to certain parameters, ranging from unsatisfactory to outstanding results. But these estimates are often prone to errors such as the halo effect, bias, central inclination, and others.
Performance appraisal was an annual activity to measure the performance level of an employee or individual. The system, as already mentioned, was mostly implemented from the top down, with supervisors playing a key role in judging employee performance without requiring their active participation. The assessments were largely discredited, as they focused mostly on the shortcomings and incapacities of the employee in the past year, or were happy to identify staff development needs and improve them. Performance appraisals have traditionally been conducted bureaucratically and have been subject to corruption and unnecessary delays. Evaluations have usually been narrowly focused and operate independently, meaning that it affects the overall vision or goal of the organization.
The side effects of performance appraisal systems caused a great deal of doubt among managers and employees when the HR manager was hired.
In the current circumstances, organizations have focused on performance management from performance appraisal, which is a consequence of the globalization of operations and the internationalization of human resources activities. The tasks of the HR manager have become much more complex today due to the shift of focus to talent management through the implementation of development programs that strengthen employee competencies.
Performance management focuses more on controlled behavior and concrete results based on pre-set smart goals. The acceptance of techniques such as goal management (MBO) is determined in terms of facts and figures. The superior plays the role of mediator or coach throughout the process. Goals are mutually decided at the beginning of the performance season, which is the standard for evaluation. In this method, company staff provide feedback on their contribution by filling out an evaluation form.
Performance management is a much broader concept compared to performance appraisal, as it addresses a range of activities that the latter never cares about. It is a strategic system and an integrated approach that aims to create successful organizations by forming high-performance teams and improving the performance of individuals. The process is initiated when the company designates a service. Performance management focuses on co-decision planning rather than looking back – as opposed to evaluations – and focuses on ongoing dialogue rather than evaluations and evaluation documents. Performance management is such an ongoing process.
Approach
In managing performance, the supervisor or manager assumes the role of mentor or coach, and in evaluating, the supervisor as judge.
Some performance appraisal systems, such as the MBO, allow the employee and supervisor to set common goals. It involves frequent reviews, so it often seems similar to performance management. But such methods often do not take into account the goals and real-time management offered by performance management.
