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Difference Between Performance Management and Performance Appraisal

Performance Management vs Performance Appraisal

Performance management and Performance appraisal are two terms that are often used in the field of the evaluation of employee efficiency. These two procedures differ in terms of their concept and connotations.

Performance appraisal consists in the setting of job standards and evaluation of the past performance. It is understood that the evaluation is carried out based on the job standards that have earlier been set. On the other hand performance management concentrates on managing the performance in state time so that the performance can reach the expected level. This is one of the main differences between performance management and performance appraisal.

In short it can be said that both are two methods of evaluation of the performance of employee in a firm or in an organization. Between the two it can be said that performance management is the older and traditional approach. On the other hand performance appraisal is a sort modern method or approach of evaluating the performance of an employee of a firm or an organization.

It is interesting to note that both these types are employed by the company or a firm in a bid to evaluate the performance skills of its employees especially in the present scenario characterized by competitive nature of economy and rapid changes in the environment.

Performance appraisal is a limited function in the sense that it concentrates only on the evaluation of the past performances and it is usually done once or at the most two times in a year. In other words it can be said that performance appraisal is all about distinct staff activity.

On the other hand performance management is a continuous function in the sense that it is done in an on-going fashion to ensure that the employees discharge their capabilities in such a way that targets are achieved in real-time basis. Hence it is often said that performance management is continuous in purpose whereas performance appraisal is occasional in purpose.

Both the methods differ in terms of their methodology too. Performance appraisal is more formal and structural in nature. On the other hand performance management is more casual and flexible in nature. This is also an interesting difference between the two methods of evaluation.

Performance management is more customized for employee’s work. On the other hand performance appraisal is more standardized based on the designation of the employee of the firm.


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