Who is a part in it?

Performance management involves lot of communication between managers, employees, peers, customers, HRs, etc. Whereas, performance appraisal is a bureaucratic approach that involves only the management/leadership team and HRs as a part of it.

Which is rigid and which is flexible?

Performance appraisal is a monolithic process that is rigid and pre-decided. Employees are force-fitted into the salary curve. Whereas, performance management is a flexible process that changes with time. It is made in-line with employees that seek constant inputs from corresponding line managers on employee’s performances.

Where is the focus?

Performance appraisal is focused on quantified objectives that require tangible output to take actions. On the other hand, Performance Management focuses on values, skills, competencies, behaviors possessed & expressed by employees at tough times and at rest of the times.

OMG – Complexities?

Performance appraisal involves too complex and too much paper work. HR and management team mess up their brains to derive the normalization process & arrive at their organization specific bell curve. There are possibilities for other intricacies such as aggregating values, determining mean values etc. Performance Management is neither vulnerable to errors nor complex. Employee performance records, good work, areas of improvements are shared & documented for future use.

How frequent is it?

Performance appraisal happens once a year and employees are called for a one-on-one discussion end of the financial year. It is a more formal discussion where what needs to be discussed is a common template to all employees. Performance Management is a more continuous process that collaborates employees with managers. It enhances manager-employee, peer-to-peer relationship with constant communication and feedbacks.