Performance Appraisal and Performance Management are the most commonly confused terms because they both are associated with the evaluation of employees. Therefore, these terms are used interchangeably. But the truth is that they both differ in their meaning and concept. Performance Appraisal, is a yearly system while if we talk about Performance Management, it is a continuous process that does not occur eventually.
So, the wait is over; we are here presenting you all the important differences between performance appraisal and performance management. Have a look.
Content: Performance Appraisal Vs Performance Management
|Basis for Comparison||Performance Appraisal||Performance Management|
|Meaning||Performance Appraisal, means the analysis of an employee's performance and their caliber for future growth and development.||Performance Management is the management of human resources in an organization.|
|What is it?||It is a system.||It is a process.|
|Type of tool||Operational Tool||Strategic Tool|
|Owned by||Human Resource Department||Managers|
|Focused on||Quantitative Aspects||Qualitative Aspects|
Definition of Performance Appraisal
Performance Appraisal is defined as an assessment of employees by the manager, in which he evaluates the overall contribution made by the employee to the organization. It is a systematic and logical review, conducted by the organization annually to judge his potential in performing a task. It helps to analyze the skills and abilities of an employee for their future growth that increases the productivity of employees. It helps to identify, the employee who performs their task well and those who are not, along with the reasons for the same.
Performance Appraisal is an organized way of evaluating employee performance, for which a comparison is made between actual performance and the preset standards. The results of the performance appraisal are documented. After that reviews are given to the employee about their performance during the year, to tell them where they require improvements. Employees also wish to know their position in the organization after a particular period of time.
You can understand the procedure of the performance appraisal, with the help of the following diagram:
Definition of Performance Management
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.
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:
- 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.
- Performance Appraisal is a system while Performance Management is a process.
- Performance appraisal is inflexible, but performance management is flexible.
- Performance Appraisal is an operational tool to improve the efficiency of employees. However, performance management is a strategic tool.
- Performance Appraisal is conducted by a human resource department of the organization, whereas managers are held responsible for performance management.
- In performance appraisal, corrections are made retrospectively. In contrast to performance management is forward looking.
- Performance Appraisal has an individualistic approach which is just opposite in the case of Performance Management.
- Performance Appraisal is carried on eventually, but Performance Management is an ongoing process.
Therefore, we can say that the term performance appraisal and performance management are completely different. But, it can’t be said that they are contradictory because performance appraisal itself is a part of performance management. In this way, we can say that performance management is a bigger term that involves some steps.