Business owners not familiar with human resources development may sometimes confuse the concepts of performance management and performance appraisal. A performance appraisal--sometimes referred to as performance evaluation--is one of the processes in a performance management system. You want to distinguish this step from the entire performance system, an essential component to improving employee engagement, job satisfaction and productivity.
1.
Research the term "performance management system" to learn the components of an entire process, as opposed to the steps within that process. A performance management system is used to manage your employees' job performance levels. Performance management begins with selection of the candidate best suited for a position with your company. During the selection process, you seek candidates who possess the qualifications necessary for each job within your organization. Core competencies are a significant part of the qualifications. Examples of core competencies include written and verbal communication skills, critical or analytical thinking capabilities, and leadership techniques.
2.
Assemble the documents that a performance management system contains. Two primary documents are the job description and job specifications. A job description outlines the essential functions of the job, frequency of tasks or responsibilities, and minimum qualifications necessary to perform the job. Many job descriptions contain minimum qualifications and desired qualifications. Job specifications designate what physical and mental capabilities are required for job performance. For instance, a forklift driver may be required to move 200-pound pallets for three continuous hours each day. Another job specification may be for a software analyst required to view multiple computer screens for 80 percent of the day. Job specifications are typically constructed to determine a candidate's suitability and ability to operate safely.
3.
Prepare an outline of the performance standards you expect of your employees. For instance, if you believe an employee is exceeding your expectations by serving 25 customers each day, that is considered a performance standard. Using this scenario, an employee who meets expectations might serve 15 customers per day; an employee whose performance falls below expectations may be serving only five customers a day. Performance standards designate the quantity or quality of tasks and responsibilities that exceed, meet or fall below your expectations.
4.
Seek out performance appraisal forms and incorporate your performance standards into a draft performance appraisal form. Take into consideration the job type, functions and duties. The performance standards and evaluation form for a production worker will differ from the evaluation form used for a sales representative, but both are a component of the overall performance management system. Your company's performance appraisal form may contain a brief job description, the employee's position, rank or tenure, and instructions for completing the form. A performance appraisal, or evaluation, may also include the employee's current and projected goals.
5.
Study your draft performance appraisal form. Notice how much more comprehensive it is than other documents in the performance management system. Some appraisal forms contain instructions for conducting the appraisal meeting or listening to employee input. A performance appraisal form can be defined as the culminating document in assessing an employee's performance, or it can be considered the employee's map for upcoming goals and projects. Evaluation of the employee's work history is summarized on the performance appraisal form to become a part of your company's overall performance management system.
Mid-year performance reviews, also called performance appraisals, are routine practice for many organizations. Conducting performance reviews is an integral part of a broader talent strategy that aims to push your employees to reach their full potential, move forward within their careers and the company, and become engaged and invested in the future of your organization. Performance appraisals are necessary and specific conversations within your performance management process, but it’s important to understand that while performance reviews and appraisals work in tandem with performance management, these two ideas are not the same. They are distinct strategies that serve distinct purposes: Performance Management is the end-to-end process of managing talent and goals throughout the lifecycle, whereas performance reviews or appraisals are a specific way of measuring performance between scheduled conversations.
It’s an important distinction, and understanding the difference between performance management and performance appraisal is the key to a better talent strategy.
What Exactly is Performance Management?
Performance management is the strategic process HR teams use to develop overall employee performance and productivity and it is a process used to build the best team possible through a focus on the development of top talent into A Players. The goal is to foster happy, engaged employees who are capable of reaching their full potential by establishing how each role’s competencies fit into broader organizational objectives, and how to continuously improve performance over time. The better we meet the needs of individuals, the better the business performs as a whole.
Did you know? 63% of employees believe that #PerformanceReviews aren’t a good indicator of performance. @ClearCompany shows you what to do instead.Performance management is a continuous and ongoing process of growth and development. There should be a regular cycle of reviewing achievements, identifying strengths, tracking progress, monitoring and setting goals and updating your development plan.
The ClearCompany Performance Management solution is designed to give HR professionals and managers the tools they need to seamlessly achieve goal alignment, increase employee engagement, and gain tangible insights into your workforce that you can then apply to your talent management strategy. Managers can track and monitor employee performance while highlighting and focusing on what's most important for the needs of your organization along the way.
The solution provides tools that make it easier to:
- Schedule, manage, and track performance conversations
- Provide real-time feedback — in context — that can be implemented immediately.
- Get individual, team, and organizational goals aligned
- Celebrate a job well done and get peer encouragement and socialization
- Track performance and trends across individuals, managers, and teams
Are Performance Appraisals Still Important?
Even though traditional performance appraisals can have an adverse effect on performance if done poorly, performance reviews that are well executed are a valuable tool to compliment your performance management tactics. While continuous conversations can be powerful, without a scheduled time for a straightforward performance appraisal about expectations, can employees really move forward? Appraisals carve out time for structured conversations when managers can coach employees through their challenges and successes — and what lies ahead of them.
Keep in mind, however, that it’s important to know how these conversations are put together, and where the appraisal comes from. 63% of employees believe that the traditional employee-manager review is not a true indicator of performance. There may be bias, a one-sided view of the work, or maybe the person conducting the review actually has little interaction with the employee. Instead, consider a 360-Degree approach, which collects performance feedback from supervisors, cross-department collaborations, team members, and peers.
Better, more well-rounded, and objective feedback can even strengthen manager-employee relationships — giving each side the opportunity to both give and receive better feedback, and hold a more honest and open conversation where they can work together to align personal goals to company objectives.
With Performance Management software, scheduling reviews and collecting feedback is easy and seamless. You can create, automate, and manage every type of performance review that’s best for you, including:
- New Hire Reviews [30, 60, 90-Day Reviews]
- Quarterly, Bi-Annual or Annual Performance Reviews
- Competency and Roles Based Reviews
- Time-Based Reviews
- Peer and 360 Reviews
These reviews are also customizable to your needs; you can do everything from building your own scales, questions, and sections, to creating a multi-stage process that includes review, approval, and timed stages. You can build the best review for your organization, schedule it, automate it, and collect and manage feedback — all in one place.
How Performance Management and Performance Appraisals Work Together
Performance management is the backbone of a good talent management strategy. When managers take the time to define personal goals and objectives and schedule dedicated meetings to check in with employees, it demonstrates that they care not just about performance and productivity, but about individual career aspirations and job satisfaction. It helps foster happier employees who grow into A Players and who are more likely to remain dedicated and loyal to their employer.
While performance appraisals drives the overall approach to your talent strategy, performance appraisals are a personalized conversation to ensure feedback is received, goals are met, and expectations are laid out. Performance reviews are the direct line to individuals that explicitly communicate performance.
Think of performance management as a large portrait, and the performance appraisals as tiny brush strokes. The picture works together because the artist put time into each stroke. Your business is a reflection of the time you spent on the tiny details.
The Impact on Company Performance
Your organization’s success depends on that of your employees. Performance management and performance appraisals are both built to align individual performance and goals to those of the greater organization, and each are critical tools to achieve the level of productivity, job satisfaction, and effectiveness required to reach your business goals. As part of your larger talent strategy, these tactics provide the space to work on employee engagement, develop the necessary skill set for success in a role, and increase overall job satisfaction.
Performance management drives the overall approach to your talent strategy: What do you need your individuals and teams to accomplish in order to meet your business goals? How do you ensure you provide the right resources, training, and development to get there? What is it that motivates employees, and how do you tap into that? How does your culture affect performance? All of these questions are broader concepts that inform how your employee performance strategy can achieve the goals you aim for.
Performance reviews — those little brush strokes on the painting — are the detailed, individualized, and personalized conversations that you have with employees to ensure that their needs are met, they are receiving the feedback, direction, and attention they need, and that they are engaged and satisfied with their work. Performance reviews are the direct line of your talent strategy: Is what you’re doing working? Do your expectations align with reality? Are your employees happy and growing? Reviews are a critical lifeline to understanding whether or not your execution will lead to your goals being met.
By effectively conducting performance reviews through your talent strategy, and focusing on each individual employee and their contribution to the achievement of company goals, it will drive your business to success. The ClearCompany Performance Management software has all the tools you need to develop A Players. To learn more, reach out to our experts to schedule a free demo today.
Is performance appraisal and performance management same?
Performance management ensures that the employee has accomplished the set goals or not. It also guides them with blockers on the way. Performance appraisal only evaluated employee's performance objectively for the year and gave final feedback.How is performance management and performance appraisal related?
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.Is performance management and performance appraisal synonymous?
The terms 'performance management' and 'performance appraisal' are sometimes used as synonymous, but they are different.Is performance management and performance management system the same?
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.