Difference Between Performance Appraisal and Performance Management

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.

Take a read of this article to understand the difference between performance appraisal and performance management system.

Content: Performance Appraisal Vs Performance Management

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

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.
Nature	Rigid	Supple
Type of tool	Operational Tool	Strategic Tool
Owned by	Human Resource Department	Managers
Conducted	Annually	Continuously
Approach	Individualistic	Holistic
Focused on	Quantitative Aspects	Qualitative Aspects
Corrections	Retrospective	Prospective

Definition of Performance Appraisal

Performance Appraisal is defined as an assessment of employees by the manager, in which he/she 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.

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.

Conclusion

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.