Performance management and appraisal

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I. Contents of getting performance management and appraisal

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Comparing performance appraisal vs performance management, performance appraisal sets job
standards and evaluates past performance based on such set standards whereas performance
management aims at managing performance real-time to ensure performance reaches the desired
levels.
Performance Appraisal vs Performance Management
Performance appraisal and performance management are two employee performance
evaluation methods.
Performance management is the traditional approach to evaluating the performance of an
employee. The increased competitive nature of the economy and rapid changes in the external
environment has forced many organizations to shift from reactive performance appraisals to the
proactive performance management to boost productivity and improve organizational
performance.

Scope
The basic difference between performance appraisal vs performance management lies in the
scope.

Both performance appraisals and performance management entail setting performance targets,
reviewing the achievement of targets, and devising ways to enable employees to meet targets.
Both these systems establish clear expectations on what an employee is expected to do, set the
guidelines on what constitutes successful job performance, and strive to identify barriers to
effective performance.
Performance appraisal is, however, a limited and reactive function of evaluating past
performance, undertaken once or twice a year. It is a distinct staff activity with no direct
intervention to the employees day-to-day work.
Performance management is a continuous and on-going proactive mechanism to manage the
performance of an employee and ensure that the employee achieves the set targets on a real-time
basis, without reviews or corrective actions at some point in the future. It is a line activity and
remains ingrained in the employees day-to-day work.
In some organizations performance appraisal becomes part of an overall performance
management system. The appraisal takes place at periodic intervals and becomes the basis to
make corrective actions and set further targets.
Approach
In performance management, the manager of the supervisor assumes the role of a coach or
mentor whereas in performance appraisal, the supervisor acts as a judge.
Some performance appraisal techniques such as Management by Objectives (MBO) allow for
joint setting of targets, by the supervisor and the employee, with frequent reviews, and thereby
come close to performance management. Such methods, however, still fall short of the real-time
management and monitoring of targets offered by performance management.
Methodology
The performance appraisal tends to be more formal and structured. Although most
performance appraisal systems allow customization of key performance areas or what constitutes
performance based on the employee, the system nevertheless remains rigid with laid down
procedures and rating parameters binding on all employees equally.
Performance management is a comparatively more casual and flexible method of evaluating
an employee's performance. Like performance appraisals, it establishes guidelines on what
constitutes optimal performance, but since the application is real-time, it allows for considerable
relaxation or changes to such guidelines depending on the specific job situation and
circumstances of the time.

Performance management remains customized for the individual employees actual work,
whereas performance appraisal is usually standardized based on the employee's designation, or at
best on the employees job description rather than on the employees actual work exigencies.
Merits and Demerits
Performance Appraisal vs Performance Management Comparing performance appraisal vs
performance management, both lead to an increase in organizational productivity, though
performance management allows for real-time changes to boost productivity.
The real-time monitoring and correcting of performance in performance management help
improve employee performance much better compared to the traditional performance appraisal
system.
Performance management allows for linkage of performance to both long-term and short-term
corporate goals. For instance, if the organization has a short-term aim to increase margins by ten
percent during the season, such a linkage comes only in the next years performance appraisal, or
the linkage might not come at all. Employees tend to receive favorable reviews and bonuses even
when the organization fails to achieve such short-term goals.
Performance management that focuses on actual results and on-the-job performance
promotes team work. Most performance appraisal systems focus on individual
achievements and focus on results rather than methods, prompting employees to place
individual goals over team goals.
Performance management helps in the successful implementation of initiatives such as
Total Quality Management.
Performance management eliminates rater bias, a major shortcoming of performance
appraisals. In a performance appraisal the employees future depends not just on
performance, but also on the goodwill of the supervisor.
Performance management focuses on actual performance instead of memories of past
performance. As such it removes from the evaluation distortions that could have either
helped with performing the job better or special circumstances impeding performance.
Performance management eliminates stress arising from the impending appraisals.
Performance management concentrates on the immediate and most relevant concerns,
whereas performance appraisal forces looking into the past, which in many causes would
remain irrelevant and force time away from pressing concerns.
The apparent advantages of performance management notwithstanding, performance appraisal
also has its uses and advocates.
Performance management and performance appraisal reflect the notions of hard and soft
HRM. Performance Management entails controlling the employees activity, and is a hard and

top-down approach which might not go down well with highly skilled and achievementoriented employees who value autonomy. Performance appraisals allow for such autonomy,
indicating a soft approach.
==================

III. Performance appraisal methods

1. Essay Method
In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.

2. Behaviorally Anchored Rating Scales

statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages helps overcome rating
errors. Disadvantages Suffers from distortions
inherent in most rating techniques.

3. Rating Scale

Rating scales consists of several numerical scales

representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages Raters biases

4. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages economy, ease of administration, limited
training required, standardization. Disadvantages Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings

5.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
Employees are ranked according to their
performance levels.
It is easier to rank the best and the worst
employee.
Limitations of Ranking Method
The whole man is compared with another
whole man in this method. In practice, it is very difficult
to compare individuals possessing various individual
traits.
This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
When a large number of employees are working,
ranking of individuals become a difficult issue.
There is no systematic procedure for ranking
individuals in the organization. The ranking system does
not eliminate the possibility of snap judgements.

6. Critical Incidents Method

The approach is focused on certain critical behaviors of

employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.

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