Performance appraisals are a traditional approach to managing employee performance. It is a systematic process of evaluating and assessing an employee’s performance based on predetermined performance metrics. Appraisals often use quantitative measures, such as sales goals, customer satisfaction ratings, or productivity levels, to evaluate employee performance. They offer a retrospective analysis of an employee’s past performance and provide feedback on their areas of strength and opportunity for improvement. Performance appraisals are typically conducted on an annual or bi-annual basis and can sometimes be viewed as a one-way communication process.

Performance management is a continuous process that involves setting goals, monitoring progress, and providing feedback throughout the year. The main objective of performance management is to align individual employee goals with organizational objectives. Performance management uses a variety of tools and techniques, including coaching, mentoring, and development planning. It establishes clear and measurable objectives and ensures that employees have the resources necessary to achieve them. Performance management is more focused on future performance and encourages two-way communication between employees and their managers.

Choosing between performance appraisals and performance management depends on the goals and culture of your organization. If your company is more focused on short-term goals and needs to track employee progress over a specific period, performance appraisals may be the right choice for you. Performance appraisals are useful for assessing employee performance and identifying areas of improvement. However, if long-term success is your objective, performance management may be a better fit. Performance management establishes a clear line of sight between individual goals and organizational objectives, which can lead to higher levels of employee engagement and performance.

Performance appraisals and performance management both play an essential role in managing employee performance. Performance appraisals are typically used to evaluate employee performance, while performance management focuses on aligning individual goals with organizational objectives. Both approaches have their advantages and disadvantages, and the right choice depends on your organization’s goals and culture. So, before you choose your approach, consider your organization’s objectives and values, and choose the one that best fits your needs. Remember, improving employee performance is an ongoing process, and choosing the right approach is the first step to achieving it.