Difference between Performance Management System and Performance Appraisal Annual performance appraisal is one of the components of a complete performance management system.
By objectives, a performance management system differs with performance appraisal, for while the latter focuses on the evaluation, or measurement, of the employee’s performance against the agreed job description or performance metrics, as an evidential basis for a possible salary increase or incentive, or any other status variations of the employee in the company, the former ultimately aims to meet the company’s mission and vision by optimizing the perform...
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...ance of each of its employees. A comprehensive performance management system includes the following (Heathfield):
Performance planning by employee’s goal setting; 2. Continuous performance communication between the subordinates and the managers; 3. Performance data gathering observation and documentation; 4. Performance appraisal meetings; and 5. Performance diagnosis and coaching. Performance appraisal usually, and seemingly, serves as a conclusion to the whole system for a given period of time, like quarterly, or annually, for, at the end of this period, the performance of the employee is being summed up against the objectives or goals which were established at the initial stages of the system.
It involves evaluation of how, or how much, an employee performed, typically being linked with monetary rewards and sanctions (Asopa, 1997). The customarily anticipating result of a performance appraisal, primarily designed to boost moral and encouragement, causing a big deal for the employees, seemingly overpowers the performance management system behind it, because of the employees’ greater population within the company than the managers.
This is the reason why performance appraisal and performance management system are being interchanged, as well. While the results of performance appraisal directly impacts the employees, for any possible salary increase, financial incentives, or hierarchical employee promotions within the organization or company, the management, and the company, itself, looks at the results of the performance management system as a primary metric for their performance.
Bibliography Asopa, V. N. (1997). Management of agricultural research: A training manual. Module 5: Managing human resources. Retrieved August 21, 2010, from Food and Agricultural Organization of United Nations: http://www. fao. org/docrep/w7505e/w7505e06. htm Heathfield, S. M. (n. d. ). Performance Management Is NOT an Annual Appraisal. Retrieved August 19, 2010, from About. com: http://humanresources. about. com/od/performanceevals/a/performancemgmt. htm