Most organisations have some type of employee appraisal system, and many are experiencing the shortcomings of manual staff evaluation systems. When discussing workforce performance the most commonly asked question is “How does Performance Management differ from performance appraisals or staff reviews”? Performance Management is used to ensure that employees’ activities and outcomes are congruent with the organisation’s objectives and entails specifying those activities and outcomes that will result in the firm successfully implementing the strategy (Noe et al. 2000, p.55). An effective Performance Management process establishes the groundwork for excellence by:
Linking individual employee objectives with the organisation’s mission and strategic plans. The employee has a clear concept on how they contribute to the achievement the overall business objective,
Focusing on setting clear performance objectives and expectations through the use of results, actions and behaviors,
Defining clear development plans as part of the process, and
Conducting regular discussions throughout the performance cycle which include such things as coaching, mentoring, feedback and assessment.
Performance appraisal properly describes a process of judging past performance and not measuring that performance against clear and agreed objectives. Performance Management shifts the focus away from just an annual event to an on-going process. Figure 2.1 is a process diagram that provides a graphical view of the major differences between the two processes.
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