Merits and Demerits
Comparing performance appraisal vs performance management, both lead to an increase in organizational productivity, though performance management allows for real-time changes to boost productivity.
The real-time monitoring and correcting of performance in performance management help improve employee performance much better compared to the traditional performance appraisal system.
Performance management allows for linkage of performance to both long-term and short-term corporate goals. For instance, if the organization has a short-term aim to increase margins by ten percent during the season, such a linkage comes only in the next year’s performance appraisal, or the linkage might not come at all. Employees tend to receive favorable reviews and bonuses even when the organization fails to achieve such short-term goals.
- Performance management that focuses on actual results and on-the-job performance promotes team work. Most performance appraisal systems focus on individual achievements and focus on results rather than methods, prompting employees to place individual goals over team goals.
Performance management helps in the successful implementation of initiatives such as Total Quality Management.
- Performance management eliminates rater bias, a major shortcoming of performance appraisals. In a performance appraisal the employee’s future depends not just on performance, but also on the goodwill of the supervisor.
- Performance management focuses on actual performance instead of memories of past performance. As such it removes from the evaluation distortions that could have either helped with performing the job better or special circumstances impeding performance.
- Performance management eliminates stress arising from the impending appraisals.
- Performance management concentrates on the immediate and most relevant concerns, whereas performance appraisal forces looking into the past, which in many causes would remain irrelevant and force time away from pressing concerns.
The apparent advantages of performance management notwithstanding, performance appraisal also has its uses and advocates.
Performance management and performance appraisal reflect the notions of ‘hard’ and ‘soft’ HRM. Performance Management entails controlling the employee’s activity, and is a “hard" and “top-down" approach which might not go down well with highly skilled and achievement-oriented employees who value autonomy. Performance appraisals allow for such autonomy, indicating a “soft" approach.
Image Credit: flickr.com/Wolfgang Staudt