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18 February 2019

How to differentiate performance management from performance appraisal

The terms performance appraisal and performance management are typically used interchangeably. In reality, however, while they do have some similarities, they certainly aren’t the same. Understanding how these two concepts are different, but also relate to each other is a key learning factor for the HR and talent management professionals of today.


Performance management consists of the following steps; identify, measure, manage and develop. This process is followed for the overall performance of the employees in a business. Performance appraisal, on other hand, is the ongoing process of evaluating the employees performance. Performance management is an ongoing process, while performance appraisals works on an annual system - taking place sadly just once or twice a year.


Key differences between performance appraisals and performance management




Performance management is a joint process by employees and their line managers, and sometimes other stakeholders also play a part. These stakeholders consist of any party who can be helpful in impacting the employee performance. The process is customized in line with each workers actual work.


Performance appraisals, on the other hand, are a top down assessment. They are usually standard procedure and done by the HR department together with direct managers. The appraisal is dependent on the employees job description, experience, and designation.


Performance management is a process while performance appraisal is a system


Performance appraisals are an organized approach to evaluating an employee's performance. Actual performance is measured against preset standards. Performance appraisals are documented, and thereafter employees will be provided with a review on their performance during the past year. The review will also indicate where improvement may be necessary.


Performance management, on the other hand, is an ongoing process with a goal of planning, monitoring, and evaluating a workers objectives and their total contribution to an organization. The end goal is to improve and encourage the effectiveness and efficiency of employees.


The structure


While a performance review has structure, it still allows for customization of the key performance areas, which will vary from person to person. But, when it comes to ratings, it’s a  rigid process since the ratings apply to each and every worker.


On the contrary, performance management is a fairly flexible process when it comes to performance evaluation. While there are guidelines in place that demonstrate optimal performance, they can differ from person to person depending on job description and capabilities.


If you want to know more specifics on performance appraisals and best practices, then is a great place to look. We offer you the tool to facilitate fair and efficient performance reviews, that are tangible and quantifiable too.


Appraisals combined with ongoing management is a winning formula


At the end of the day, it’s not performance management versus performance appraisals. It should ideally be a combination of the two. When leaders stay on top of employees’ performance by means of appraisals, regularly give feedback, and discuss issues with their team both formally and informally - that’s exceptional performance management. When combined with regular appraisals, these make for a management strategy that is beneficial to the business and its employees. If you are looking for help or general assistance with your appraisal and management system, go and check out !

Posted by: Edit Ford

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