An organisation is only as good as the performance of its staff, so being clear on how you assess the workforce is crucial.
By the sound of it performance appraisal and performance management may appear to be pretty similar.
However, they are very different and understanding this is key when it comes to evaluating the performance of employees.
Performance management (1) is a comprehensive, ongoing and flexible approach to the management of organisations, teams and individuals. It also requires full dialogue between all parties involved.
Performance appraisal (2) is not as wide ranging. It takes a more limited approach and involves managers assessing and typically rating the performance of staff at an annual performance appraisal meeting.
Perhaps the best way to think of the difference between the two is that performance management is about what you can do to help the employee to perform to the expected and required level. Performance appraisals are about assessing performance over a period of time, typically once or twice a year, to identify the progress being made.
While performance management is a proactive process performance appraisal is a reactive one. And while some time can be spent summarising the differences – performance management is focused on the future and appraisal on the past – it is worth looking at each process in a little more detail.
The aim of the policy should be to evaluate and ensure the worker is performing to a satisfactory level and carrying out their duties to the required standard.
The process can help to align the workforce, build competencies, and improve performance and development, which in turn can produce better results for the employer.
There are a number of elements to an effective performance management plan, which include:
Crucial factors in managing performance are ensuring that clear standards are set and communicated, providing regular and constructive feedback and taking corrective action where necessary.
Good performance management should make sure that all workers are clear about the following:
In the event that an employee fails to perform to the required standard action can be taken, which may lead to dismissal (3).
Is a way to gauge the progress being made by assessing the employee’s actual performance on a regular basis over time.
For employees it provides an opportunity to discuss their salary, future and promotion prospects with the organisation and other relevant work-related issues.
Usual appraisal systems are:
· Normally based on a review of how a person completed their job for the prior year
· Sometimes a pay review
· Sometimes a review for bonuses
· Sometimes an assessment of the employee for promotion
· Usually conducted annually or less frequently
Research published last year found that small businesses are denying employees an opportunity for growth due to a lack of appraisals and meetings about personal development (4).
The study found that 30 per cent of the UK workforces never have meetings about their personal development. Small and medium-sized enterprises (SMEs) in the UK employ 15.7 million people, so that means 4.7 million people - almost a third of the SME workforce aren’t getting the input needed to further their career.
A number of employers are now ditching the formal annual appraisals in favour of more regular discussions with employees, which provides instant recognition (5).
1. How to manage performance | Advisory booklet. 2010 Apr 20 [cited 2018 Jan 15]; Available from: http://www.acas.org.uk/index.aspx?articleid=2927
2. Performance Appraisal - Meaning, Objectives and Advantages [Internet]. [cited 2018 Jan 15]. Available from: http://www.managementstudyguide.com/performance-appraisal.htm
3. The Cube 123 Albion Street. Managing discipline - Taking action about performance issues [Internet]. 2013 [cited 2018 Jan 15]. Available from: http://www.acas.org.uk/index.aspx?articleid=4229
4. Jones M. How often should you have employee appraisals? [Internet]. [cited 2018 Jan 15]. Available from: https://www.breathehr.com/breathingspace/how-often-should-you-have-employee-appraisals
5. One of the world’s biggest companies is scrapping annual performance reviews [Internet]. The Independent. 2015 [cited 2018 Jan 15]. Available from: http://www.independent.co.uk/news/business/news/accenture-one-of-worlds-biggest-companies-to-scrap-annual-performance-reviews-10421296.html