Performance Management - 2 (Appraisal, Process)

Performance ManagementVs Appraisal 

Performance management process steps

Performance ManagementVs Appraisal 

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.

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. 

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.

Performance Management	Performance Appraisal
Performance management is strategically executed. Leads to increased performance in the organization.	Performance appraisal is often perceived as a difficult process for the employee and HR
Performance management results in improved communication between the organization, manager and the employees. There is frequent communication in the organization that fosters collaboration in an organization.	Performance appraisal does not address the perception gaps as the intent of the employees and HR differs most often.
In performance management, rules are clearly defined for the employees. There is an informed discussion about the goals and objectives of the organization in the process of employee management.	The objectives of the organization are not communicated to the employees in appraisals at times. There is a lack of transparency when it comes to performance appraisals.
Performance management reduces the anxiety of the employees because, employee management reviews are a continuous process. The discussion revolves around the productivity of the employee with relation to the productivity of the management as such. More room for management-based discussions.	Performance appraisals lead to anxiety at times because the process is periodic and not continuous. Employees often perceive appraisals in a negative manner because it does not have anything to do with improving themselves to meet the objectives of the organization. In performance appraisals, the communication is often confined to the manager and the employee without discussing what is needed for the organization.
Appraisals are a part of performance management. Appraisals are more accurate in performance management because of the continuous feedback process. Performance management addresses the problems effectively leading to better appraisals.	Lack of proper communication: performance appraisal focuses a great deal about the employee’s performance as such. It does not clearly lay down what is expected from them in the future. The discussion is often less constructive for the employee in performance appraisals.
Performance management is timely. Performance management is automated. It has all the relevant documentation about the employee and managers can access it any time. They can give training in skillset and other aspects they need to work on.	Performance appraisal are timely and automated. Everything is documented and there are feedback forms. After the employee evaluates himself, the manager then gives his feedback. The feedback is often related to what the employee has done other than giving him relevant training.
Performance management leads to better employee engagement because employee management focus on the personal development of the employee compared to appraisals.	There is a lack of employee personal development strategies in appraisals. Since it is only objective performance review. Appraisals do not deal with formulating developmental plans.
Performance management ensures that employees feel a better sense of belonging compared to performance appraisals.	There is a lack of developmental strategies for employee performance in the appraisal process. Employees may get cynical and leave the organization if they don’t see any scope for development.

 

Performance management process steps

Performance management process steps The steps in the performance management process can be broken down into four broad categories: Planning, coaching, reviewing and rewarding. Each step is equally important, and together form the backbone of a company’s performance management process. 1. Planning The first step of the performance management process is Planning. 1.1 The defining stage The performance management process begins with the planning stage. HR and management need to define the job itself, including a comprehensive description, long and short-term goals, identify key objectives and develop a clear metric for how those objectives and goals will be assessed. Goals should be clear, done in the SMART format (specific, measurable, attainable, relevant, time-based) and clear performance standards should be set. 1.2 The feedback stage Once management has completed the defining stage, employees should have the opportunity to give input on this material. They are the one doing their job and will haveA a key insight into what skills, competencies and goals will best assist the company to achieve organizational goals. 1.3 The approval stage Management and employees both agree to the definition of the role, goals and objectives. By making this first step of the performance management process collaborative, management sets the stage for the process as a whole to be collaborative, and the employee feels that they are involved in goal setting – an important thing, as evidenced by the Gallup study. 2. Coaching 2.1 Organize meetings on a timely, regular basis Once the parameters of the job and objectives for the future have been set, the next step of the performance management process begins. The coaching process is extremely important and must be done on a regular basis. Meetings should be at least quarterly, although monthly meetings are the ideal. 2.2 Provide necessary training, coaching and solutions These meetings should focus on solutions and coaching opportunities, rather than punitive measures for lackluster performance. If accountability is made into a negative, then employees will avoid it rather than being honest about where they are struggling. In some cases, management training in this area can be very helpful to an organization. 2.3 Solicit feedback on both sides Management should be able to give – and receive – honest feedback and work with employees rather than adopting a combative stance. The ability to give actionable feedback is important here. 2.4 Revisit objectives as necessary As the performance management process continues, management should revisit objectives to see if adjustments should be made, as well as pay attention to career development opportunities for their employees. This step involves reviewing the overall performance of the employee, how well the process itself worked, and it also includes the reward – which is an extremely important part of the overall process. 3. Reviewing 3.1 Reviewing employee performance At the end of the yearly performance management cycle, there should be an employee review, which is sometimes also called a performance appraisal. Typically, these are held once a year, to look at how well the employee performed over that span of time. There should be a clear record from previous check-ins to show the employee’s progress throughout the year. The monthly check-ins are to help the employee with problem-solving, adjusting goals and other future-looking tasks. This performance review is the only step that looks backward, to assess the behavior of the past year. 3.2 Reviewing the performance management process At this stage, it is important for both management and employees to look over the previous year and see how well the performance management process worked. Questions that can be asked are: Were personal and organizational objectives met? If not, why? What challenges did the employee face? What training would help the employee perform better? How did management feedback help? If not, why? How could the process be made better? Was the time spent on this process effectively? 3.3 Reviewing overall goal completion Of course, one of the main questions to answer is ‘did the employee reach their goals?’ How well did the employee succeed at the tasks given to them throughout the year? It is important to look at both smaller and larger goals, as this can give an indication to problem areas where training or interventions can be applied. 3.4 Giving actionable feedback A key part of the review is to give and receive feedback. Management should give actionable feedback for the employee so that they know areas where they can improve future performance. The employee should also be invited to give feedback on the process, and how management can do better on their end. 4. Action The last step in performance management process is Action. 4.1 Reward and recognition The last step of the performance management process is the reward and recognition. This step is absolutely key – employees will not stay motivated if they are given no reason to. This does not necessarily have to be monetary, although it likely will include monetary compensation. Other rewards could be new projects, company-wide recognition, time off, or leadership opportunities. 4.2 Setting the stage for next year’s performance management cycle The end of the performance management cycle gives management and employees one last chance to offer feedback on the process as a whole and asks for thoughts and feedback for the planning stage for the next year’s cycle.