Performance Appraisal versus Performance Management

Performance of an individual refers to carrying out or completion of an action. Performance appraisal means assessment of an individual’s action with respect to its quality and/or values. Performance management is defined as the process of evaluating the accomplishments and achievement of expected goals of each employee of the organization, within a specified period (Armstrong, 2009).

According to Armstrong & Baron, (2005). Performance management became popular in the HR field in late 1990s. It is now widely accepted that performance management is a natural management process that contributes to the effective management of individuals and teams to achieve high levels of organizational performance.

Performance Management is a process that consolidates goal setting, performance appraisal and development of an individual in the system and also the system as a whole. The aim is to ensure that the employee’s performance is in alignment and supporting the organization’s vision and mission. It applies to all the organizations and includes periodic activities to establish organizational goals, evaluate and monitor progress toward the goals, and make modifications or adjustments to achieve those goals. Those periodic activities are much of what managers inherently do in their respective organizations (Rath, 2018).

Traditional performance appraisal simply involves evaluative supervisory comments on past performance. Such a process does not involve any kind of management, per se, as the only performance that can be managed is present and future performance. Performance appraisal involves hierarchical, downward communication from supervisor to subordinate concerning the value the supervisor places on the subordinate’s performance (Mello, 2013).

Performance management is the continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with organization's goals. In comparing performance management and performance appraisal, “the distinction is the contrast between a year-end event – the completion of the appraisal – and a process that starts the year with performance planning and is integral to the way people are managed throughout the year (Dessler and Varkkey, 2011).

Basically, performance management is beyond performance appraisal, and does not just deal with how employees perform at the end of the year; it takes care of the employees throughout the year and also the learning and development part of the each employee for the future. Performance management ensures that the employees’ goals are aligned to organisation’s goals. It also modifies itself based on the employee performance at every stage so that employees are in track and deliver to their potential. It also helps employees improve their potential and productivity. Key distinction between Performance Appraisal and Performance Management could illustrate in table 01 as follows, (Rath, 2018)

01  Table 01: Performance Appraisal versus Performance Management

	Performance Appraisal	Performance Management
Time period	Past	Past, present and future
Focus	Create records; document performance problems	Link employee work activities to specific business objectives and strategy
Nature of communication	One-sided, downward, directive; "rebuttal" sometimes allowed	Two-way
Employee role	Passive	Active participant
Formality	High formality, written forms with signatures	Informal, verbal
Timing	As prescribed (annual)	Spontaneous & ad hoc needed
Basis of relationship	Power	Collegiality
Role of supervisor	Authority figure	Coach, motivator, partner
Outcomes	Compensation decision; task directives	Participation; enhanced, targeted performance; improved relationships

 (Mello, 2013).

List of references;

Armstrong, M. & Baron, A. (2005). Managing Performance: Performance in Action. 1st ed. London, CIPD.

Armstrong, M. (2009) ARMSTRONG’S HANDBOOK OF HUMAN RESOURCE MANAGEMENT PRACTICE. 11^th edn [online].Available at: Armstrong's Handbook of Human Resource Management Practice by Armstrong, Michael. - PDF Drive [Accessed on 7^th of December 2022].

Dessler, G. and Varkkey, B. (2011), Human Resource Management, Twelfth Edition, Pearson Publication.

Mello, J. A. (2013), Strategic Management of Human Resources, 3rd Edn, Cengage Learning

Rath, A. (2018) "Evolution of Performance Management System: A Review of Literature", INTERNATIONAL JOURNAL OF CREATIVE RESEARCH THOUGHTS, 6(2), p. 875 [Online]. Available at: https://www.ijcrt.org/papers/IJCRT1813200.pdf. [ Accessed on 7th of December, 2022].