Performance appraisal and performance management system (PA vs PMS)

5th April 2021 0 By indiafreenotes

Performance Management System

Performance management refers to the set of activities and tasks that make sure that the employees meet their goals on time. The goals need to be aligned with the objectives of the organization. Performance management ensures the efficiency and effectiveness of the performance of the employees when the goals are reached. Performance management has a holistic approach in the sense, it analyzes employee performance keeping in mind the development needs of the employee & organization.

It is the process of managing and developing employee performance throughout the organization. It aims at planning, tracking and assessing employee performance for a specific period. The end result of performance management is to motivate employees and further increase their efficiency and effectiveness.

Performance Appraisal

Performance appraisal, on the other hand, is nothing but the evaluation of an employee’s performance. Feedback forms are given to the employee. After the employee has given self-feedback, the manager gives a final review. Performance appraisal also deals with the evaluation of an employee’s competencies such as commitment to the organization’s core values, ability to take initiatives, responsibility for tasks, strengths, and weaknesses, skill set and training, etc.

The process of evaluating employee performance on a regular basis is called as performance appraisal. Although, unlike performance management, it is restricted to evaluating past performance and conducted once or twice a year, depending upon the organisation’s policies.

Thus essentially, performance appraisal is an integral part of a comprehensive performance management approach.

Performance Management

Performance Appraisal

Performance management is about actually helping an employee to develop and increase his performance and productivity. Performance appraisal evaluates the actual performance of the employee, but it does not focus on the employee’s performance productivity.
Performance management looks at an employee’s performance keeping in mind the present and the future.  Performance appraisal evaluates the employee’s performance based on how he has performed in the immediate past. 
Performance management proactively manages an employee’s performance and ensures that the employee has accomplished all the goals, vision, mission and the core values of the organization.  Performance appraisal only looks at the employee’s performance objectively for the year and give a final feedback to the employee. 
Performance management has a holistic approach that evaluates the relationship between the employee and the organization and examine ways in which employee engagement can be fostered.  Performance appraisal is individualistic in nature and pertains to the employee and his past performance. 
Performance management is strategic in the sense that it is constantly measuring an employee’s performance and formulating new strategies for the employee’s development. A performance appraisal system is operational because it follows certain protocol for performance, and it focuses only on the result of the employee’s performance. 
Performance management is very dynamic because it involves a lot of dialog between the employee and the senior managers. There is more room for discussion in performance management.  Performance appraisals are very linear in terms of the communication because it has a very top down approach towards employee performance. There is a discussion that takes place only after the performance appraisal process. 
Performance management is future oriented keeping in mind the strategies required for maintaining the employee performance for the next year. Performance management finds ways to improve employee performance.  Performance appraisal is very retrospective in the sense that it looks back on past events and situations. It looks at an employee’s performance over a period. Performance appraisal is very past oriented. 
Performance management is a continuous ongoing process by giving real time instant performance reviews. Luckily, with the advent of an employee performance management software, there is a performance management tool that has a continuous feedback mechanism for effective performance management.  Performance appraisal system facilitates performance appraisals only once or twice a year. There is a performance management tool for appraisals, feedback happens in a periodic manner during appraisals, but the feedback may not focus on development. Typically, the discussion during appraisals revolves around justifying the rating and feedback. 
Performance management has a qualitative and quantitative approach in the sense it has ratings and more continuous feedback. If an organization has an employee performance management software, then performance management is usually in the form of comprehensive feedback given to the employees and their performance.   Performance appraisal on the other hand, has a quantitative approach towards an employee’s performance. In an employee performance management software, performance appraisals use rating scales to evaluate employee performance. There is minimal scope for constant feedback. The ratings are the only final measurement that is used for performance appraisal.  
Performance management is flexible in terms of keeping in mind the growth of the organization. Compensation and salary revisionsare a part of PMS, but performance management comes up with developmental plans for more improvement Performance appraisal is usually rigid because it is only confined to an employee’s past performance. It has little to do with his growth.