The Difference Between Performance Appraisal and Performance Management - Critical Thinking

Performance management and performance appraisal are used interchangeably by many people, but they are two distinct organization human resources processes.

Performance management is the process through which an organization management carries out a joint dialogue with the employees individually with the aim of improving the performance and development of the employees performance. Performance management is a continuous and flexible approach to improving organization human resources competencies and performance. Performance management involves organization teams and individuals and seeks to establish a rapport with the employees with the aim of promoting behaviors, skills and relationships that are more productive for an organization (DeNisi and Smith 2014).

On the other hand, performance appraisal is a top-down assessment usually carried out by an organization management to award the best performing employees in an organization. Performance appraisal is an activity carried out by the top management in an organization to their subordinates annually using a rating system with the aim of awarding the best performing employees. The success of an organization depends on the ability to create an effective appraisal management system that increases the individual employees engagement to organization activities. Unlike performance management performance appraisal is limited in that it is carried out in accordance with a specific organization metrics that ensure equality and awarding of the best performing employees (Haines and St-Onge 2012).

Performance management is a process that is initiated by an organization management by assessing the performance of the employees and helping create avenues through which it can improve and develop the employee's skills and capacity. Performance appraisal refers to a system through which an organization can assess the performance of every employee with the aim of awarding the work of the employees. Performance appraisal is usually done through a salary increment or other none monetary rewards to the best performing employees. Organizations that keep an appraisal system in the organization promote competitiveness in the working environment that encourage the employees to perform better for the reward. An organization through performance appraisal benefits through increased employee engagement which increases an organization yields and profitability. In most cases, performance management does not include any monetary rewards to the employees but increases the ability of the employees and also makes it easy for the employees to accomplish their organization tasks (DeNisi and Smith 2014).

Another approach of assessing the difference between performance management and performance appraisal is assessing the time that the activity is carried out. Appraisal of the employees is about how the employees performed in the immediate past period. On the other hand, performance management focuses on the present employee engagement and future employee capabilities. In performance management, an organization puts measures in the present to ensure that the employee performance reaches the desired organization levels. Performance appraisal is a reactive process by an organization towards employees who have performed exemplary whereas performance management is a proactive process (Haines and St-Onge 2012).

Organizations use both performance management and performance appraisal. Whereas the purpose of a performance appraisal is to establish the basis for employee promotion and reward performance management, on the other hand, ensure that the performance and skills of the employees are in line with the goals, vision, and objectives set by an organization. Whereas performance appraisal is individually based on the performance of the employee's performance management takes account of the overall organization and what is best for the competitiveness of the organization in the market. Further differences between performance management and performance appraisal is that performance appraisal is more operational whereas performance management is strategic. Employees are rarely involved in performance appraisal decisions because it is a top-down process whereas in performance management involves a dialogue between the employees and the organization management with the aim of establishing the best the best approach to improve and develop employee performance (DeNisi and Smith 2014).

It is important for an organization to establish both the performance appraisal and performance management in an organization because of their ability to complement each other. Poor management of the employees can result in loss of competitive advantage of an organization and also affects resolve of the employees by lacking a specific direction and goals to be achieved. On the other hand, performance appraisal is important in an organization because it recognizes the individual employees efforts and can help an organization to retain talented employees (Haines and St-Onge 2012).

360-degree feedback

A 360-degree feedback is an approach through which the employees of an organization can appraise the performance of each other through confidential and anonymous feedbacks. A 360-degree feedback is carried out by both the senior management and peers at the same level at a workstation and seeks to establish a broad range of workplace competencies. A 360-degree feedback should be confidential and should include basic questions that entail everyday workplace activities regarding an individual role. It is important for the raters to include comments and the person receiving a 360-degree feedback should also fill out a self-rating survey that includes the same questions to be used by the employee peers and top management to provide a 360-degree feedback. Managers, employees, and leaders perceive a 360-degree feedback as a valuable tool through which employees can establish their strengths and weaknesses. 360-degree feedback helps employees and leaders to develop individual development plans by highlighting the areas that require improvement. 360-degree feedback can be used as both an appraisal tool and an approach to managing performance. Through 360-degree feedback employees get feedback regarding their behaviors and how other employees perceive them. Employees can initiate behavioral change and develop skills that can help them be of more efficiency in their jobs. It is beneficial for an organization to include 360-degree feedback as a performance management process, but it is important for the management to provide communication on how 360-degree feedback will be used in an organization with the aim of eliminating any bias in the process. However, if not handled well, 360-degree feedback can be fatal to an organization employee management and relations and should only be used as an employee development tool and only a rating tool if an organization can manage the process to eliminate bias and workplace politics (Espinilla et al... 2013).

Pros of a 360-degree feedback

The advantage of a 360-degree feedback is that it provides a broader view of the employee characteristics and contribution to an organization. A 360-degree feedback reduces bias from the organization management on employees by allowing their peers and the customers rate them.

Employees can understand their behaviors and where there is the need for change in a 360-degree feedback than in management oriented reviews. From a 360 degree feedback, there are many people that are involved in the rating of the employees which ensures that the big picture and all behavior characteristics are captured in the employee review.

A 360-degree feedback is even more effective when employees and the managers are not in daily contact which increases the performance of the employees by ensuring they are accountable for their acts even in the absence of the managers and the supervisors.

An organization through 360-degree feedback can identify and evaluate the talent pool in an organization and identify training and skills gaps and the ability of an organization employees to live up to the values and goals of the organization (Nowack and Mashihi 2012).

Cons of 360-degree feedback

For 360-degree feedback to be successful, it has to be well planned and monitored to ensure that it is well received and office politics and biases are not included in the rating of the employees. If not well planned a 360-degree feedback can lead to a backlash from employees who will perceive the process as flawed due to emotions and fear of their enemies within an organization including negative remarks in the 360-degree feedback that does not necessarily purport the real employee behaviors.

A 360-degree feedback can lead to concentration on the negative aspects of the employees by putting more focus on the weaknesses instead of emphasizing on the strengths which can lead to the discouragement of the employees. Employees are usually discouraged by the reprimand from their fellow employees, and in such cases, the morale and performance of the employees reduce which affects the overall yields of an organization. Therefore, it is important for an organization carrying out a 360 degrees feedback to ensure that positive aspects of the employees are given emphasis and also should ensure that the people that will participate in the rating of the employees do not have an ill motive (Espinilla et al... 2013).

In conclusion, a 360-degree feedback is an important approach to assessing the progress and behavior of the employees, but it should be well planned and orchestrated to ensure that it captures the real picture of the organization employees. A 360 degrees feedback should only be used as the development tool but not as an appraisal tool especially in cases where a reward is involved because the misleading information might be provided.

Approaches of motivating employees

Organizations use both monetary and non-monetary approaches to motivate employees to work hard and improve their performance and yields for the organization. Organization reward systems promote employee performance and competencies through a reward system. An organization reward system can include both formal and informal approaches that define, evaluates and rewards the employees for their performance. The primary reason behind every organization reward system id to influence the employee behavior and attitudes towards their work. Organizations that uses a reward system has more competitive and resourceful employees than organizations without a reward system. With a reward system an organization can keep talented employees and also attract more talented employees hence, makes it possible for an organization to have competitive employees (Kehoe and Wright 2013).

An organization reward system mostly influences the behaviors, attitudes, and motivation of the employees to work hard towards an organization goals and strategy for a reward. Also, employee satisfaction in an organization is more achieved where there is an existing reward system. A good reward system should identify that employees have different needs and sources of motivation and seek to satisfy their needs in a comprehensive reward system that includes monetary and non-monetary approaches. Organizations reward systems vary from a fixed salary system to an incentive system. All the rewards offered by an organization are fixed to performance and employees are rewarded in proportion to their overall performance in an organization through a merit system where people get pay raises at the end of an accounting period depending on their contribution to the organization (Kehoe and Wright 2013).

Incentive systems used by organizations

Profit sharing

In profit sharing, approac...