What Is the Difference between Performance Management and Performance Appraisal - Coursework Example

Performance management systems (Name) (Institution) (Course) (Module) (Instructor’s Name) Date of submission What is the difference between performance management and performance appraisal? These phrases, ‘performance management’ and ‘performance appraisal’, not only share the common word ‘performance’ but the two are also key management concepts. Though they are closely related, the two have inherently different meanings and should not be confused whatsoever. Grote (2005) defines performance appraisal as A formal arrangement management system that provides for the evaluation of the quality of an individual’s performance in an organization. The appraisal is usually prepared by the employee’s immediate supervisor. The procedure typically requires the supervisor to fill out a standardized assessment form that evaluates the individual on several different dimensions and then discusses the results of the evaluation with the employee” (p. 1). Snell & Bohlander) (2009) define performance appraisal as. A process ―typically delivered annually, biannually, or sometimes quarterly by a supervisor to a subordinate ― designed to help employees understand their roles, objectives, expectations, and performance success. In addition, new employees are often put of probationary status for a period of time and evaluated 30, 60, or 90 days after being hired, with their continued employment contingent upon their performing satisfactorily (p. 362). However, Snell and Bohlander (2009) warn that the defining performance appraisal is more often than not different from what managers do in the workplace. They say that managers often employ means that limit the potential of appraisals as opposed to enhancing them. On the other hand, performance management is defined as A planned process whose five primary elements are agreement, measurement, feedback, positive reinforcement and dialogue. It is concerned with measuring outcomes in the shape of delivered performance compared with expectations expressed as goals or objectives” (Armstrong, p. 61). Nelson and Campbell offer a closely similar definition to say that “performance management is a process of defining, measuring, appraising, providing feedback on and improving performance” (p. 157). They add that the skill of performance in behavioral terms is an essential first step in the performance management process. From the above definitions, it is apparent that performance appraisals are components of performance management. However, there still exists debate on whether performance appraisals are inputs of performance management given that performance is also the output of performance management (Gravina & Siers 2011). The differences between the two terms are not based on definitions alone. A major difference between performance management and performance appraisal is their functions and how they are implemented. According to Haines and Onge (2012), performance management is a way of implementing strategic initiatives and managing the development of the workforce. Performance appraisals on the other hand are meant to assess employee performance and matching of goals and results. In a way, performance appraisals have no intentions of developing the workforce given that the common manner in which they are implemented, they tend to analyze past events. Nonetheless, Huselid (2006) says that employee performance management should precede organizational performance management. Characteristics of successful performance management system The focus of performance management should be on improving existing processes, not creating new ones. Therefore, a successful performance management system must relate to the following key processes within an organization; Budgeting, Purchasing, Planning, Human Resources, Service Delivery, Public Participation and Communication / Reporting. Failure to relate with one or more of the mentioned processes creates problems with the implementation process from the word go. A successful PMS must undergo through the following stages; Preparation, Communication Plan, Appeals Process, Training Programs, Pilot Testing, Ongoing Monitoring and Evaluation. An unsuccessful PMS may follow the same steps but the execution of the listed steps could be wrong. A missed step or poor execution of one of the steps could derail the whole process and undermine the success of a PMS. Preparation process The organization must make an active effort to employ PMS in its management. Performance management is not accidental in managing organizations but rather, organizations must make an active choice by making employing PMS. The benefits and possible detriments of such systems must be well understood and the management must be willing to play an active role in managing the success of the PMS and addressing all the challenges that may face its implementation. For unsuccessful implementation of PMS, organizations choose to actively employ PMS without outlining the step by step process on how PMS will be adopted and implemented in the organization. Failure to prepare or ill preparations for adoption of PMS sets the stage for unsuccessful PMS implementation all way through. Communication This is largely part of the preparation process. The organization, through its senior managers must make it known to all employees in all levels of the intention of adopting and implementing PMS. This can be done through memos or departmental meetings. The chosen manner of communication must again be effective and accessible to all. In some organizations that observe equality, some employees might face challenges to access the chosen form of communication. This again must be done in advance before the actual implementation. This allows employees to hold informal consultations and even psychologically prepares them for change. An unsuccessful communication plan does not reach out to all employees. In fact, some organizations, in the haste of implementing the new system may overlook the whole stage of communicating the pending system to the employees. In most cases, firms with vertical organizational structure and many layers of authority may have trouble in communicating this. Again, when the communication is not done on time, employees are more likely to be ill prepared for change and hence the likelihood of resisting the new system is high. PM training From the definition of performance management, it is clear that the term is loosely understood. Therefore, is important that managers are fully engaged with the ongoing process of performance management through planning, coaching, assessment and review. From, it is clear that mangers have a critical role to play for the success of any PMS. The training for managers must be directed and designed to improve their managerial competencies in consideration of their role in the PMS implementation process (Haines, & Onge 2012; Band 2004). Such training could focus of perception of justice and fairness, performance issues or improving performance communication messages. For instance, managers or supervisors must be trained on new employee rating language and coding if necessary (Armstrong 2009). An unsuccessful training stage for PMS implementation could be characterized by a number of things. First and foremost is the absence of training or poor training. Failure for the training to focus on the relevant issues could be the starting point for an unsuccessful PMS. This is because matters such as the role of managers and the need to give fair and just feedback could be compromised. In such a case, managers and supervisors could misuse the PMS systems to settle personal issues with their subordinates. In fact Mucha (2011) reports that this is one of most recurrent issue brought forward by employees in their attempts to explain reported poor performance. Pilot testing/trial period This stage involves the initial testing of the PMS. Managers and employees are allowed to put into practice what they have learned about PMS. Managers and supervisors on one hand will be expected to put into practice their feedback language. Any issues that might appear not to be clearly identified in this stage and corrective measures put in place. In an unsuccessful PMS implementation, this stage is overlooked. The organization in most cases makes a wrong assumption that the whole system is easy to implement and hence does not need to be introduced in phases. Multisource feedback This is not actually a stage but rather an issue that must be addressed by the PMS implementation team. This calls for managers involved in performance management process to use multiple sources of feedback to judge performance. By using a multi rater, or what is commonly called a 360°system, the feedback is provided by many sources such as subordinates, peers, superiors and even external sources such as supplies and customers. This approach is intended to eliminate bias and give a wholesome feedback that does not lean towards one task in an employee’s roles and responsibilities. However, there is no credible research that has demonstrated a link between multisource feedback and the overall effectiveness of PMS. In unsuccessful PMS implementation, single source or narrow feedback is used. In most cases, employees’ performance is judged by their immediate seniors such as line supervisors and line managers. In most cases, this give an unbalanced feedback on the employee’s performance as it tends to rely on a singular task. Furthermore, this single source for feedback is prone to bias which gives distorted views in performance thereby derailing the whole PMS process. Employee recognition Employee recognition according to Haines and Onge (2012) is strongly rooted in motivation theories. Employee recognition is considered to be a strong aspect of PMS in that it is meant to shape desired employee behavior. This process involves providing behavioral consequences that reinforce desired behavior. From this definition, it is clear where performance appraisal and performance management comes in. this is because employee behavior is the key aspect of performance appraisal and motivation theories where good performance and behavior are rewarded. This is in tandem with a popular slogan that an organization is as strong as its employees. Contrarily, an unsuccessful PMS process would ultimately ignore the people element. This would mean that employee concerns are not given priority. In some organizations that have been accused of mistreating their employees, the public perception has suffered. For instance, there are lobbies that call for western countries to boycott particular Chinese imports accusing the country of mistreating their employees. If such lobbies would be effective, the accused organizations would suffer immensely. As such, employee recognition is no longer an internal issue only but also an external one too. A sample performance management cycle Common errors in PMS implementation (i) Failure to recognize the focus of performance management Organizational leaders are likely to be accrued away with the individual tasks of performance management such as appraisals that they fail to concentrate on the objectives of PM. As aforementioned, the management should not forget that the key intention of PMS is to improve existing processes. In essence, a successful PM process should not lay too much emphasis PM tasks without clearly linking them to the expected outcomes. Ideally measures should be collected, reports written, and templates filled out. (ii) Too much focus on process and rules Performance management does not need day to day running and involvement in the specific tasks. In fact, PM can occur naturally through regular staff training eliminating the need for fully developed systems. Such staff training should be the culmination of performance management. Unfortunately, some organizations make the mistake of assuming that performance data is the final outcome of performance management (Mucha 2011). Conversely, performance data should commence the discussion on further performance improvement and can even be used in identifying the right employee training programs and the employees who need it most. (iii) Misunderstanding the audience Organizational leaders fail to understand what their audience is in so many ways. Most importantly, organizations must understand the stakeholders who directly feel the impact of slowed or improved employee performance. For instance, suppliers and customers all are stakeholders with different needs and perceptions of the organizations. In this regard, an organization must clearly understand the needed actions that will improve performance on a specific audience. Gaining a better understanding of the audience helps in crafting organizational processes. What do organizations that have failed to understand their audiences do? Through increased communication with all stakeholders (Mucha 2011). This will ensure that performance improvement programs and training are dedicated towards meeting the audiences’ needs. While doing so, the organizational leaders should avoid choosing “the right” strategies before asking the right questions to the right people. (iv) Delinking PMS with other performance enhancement programs This is a major misconception among organizational leaders who over estimate the efficiency and productivity of PMS. Consequently, such leaders tend to abandon other performance enhancement programs leaving everything to PMS which is not feasible (Band, 2004). As such, PMS should be designed in a manner to function in harmony with other performance enhancement tools such as performance appraisals and employee reward systems. (v) Forced employee rankings Performance appraisals as a component of PMS should not be forced upon employees. In fact, performance appraisals should be carried out at the beginning of an assessment period in which employees are informed about their targets and objectives instead of holding them at the end of the specified time period. Again, performance appraisals can be used as career development forums between the employee and his seniors. Conclusion The approach used in carrying out performance management system process determines the level of significance of such an initiative in an organization. Forced ranking resulting from performance appraisals in PMS kill the teamwork spirit in certain types of organizations. Performance management systems if wrongly implemented could be a recipe for failure for some organizations. For such reasons, the common errors mentioned should be avoided at all costs. Therefore, it is obvious that when the right approach is used in implementing performance management systems that focus on empowering employees and future planning rather than judging employees from past performances have unlimited benefits to an organization and individual employees. References Armstrong, H. (2009). Armstrong’s handbook on performance management. An evidence – based guide to performance management. London: Kogan Books. Band, J. (2004). Performance management in a volatile environment, The RUSI Journal, 149(1), 48-51. Gravina, N. & Siers, E. (2011). “Square Pegs and Round Holes: Ruminations on the Relationship Between Performance Appraisal and Performance Management” Journal of Organizational Behavior Management. 31(4), 277-287. Grote, H. (2005). Forced ranking: making performance management work, New York: Harvard Business Press. Haines, V. & Onge, S. (2012).” Performance management effectiveness: practices or context?” The International Journal of Human Resource Management. 23(6), 1158-1175. Huselid (2006). The impact of human resource management practices on turnover and corporate financial performance, Academy of Management Journal, 38 (3), 635-872. Mucha, M. (2011). Common mistakes in implementing performance management. The Government Finance Officers Association Research and Consulting Center. Retrieved online from, http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CCwQFjAB&url=http%3A%2F%2Fwww.ppmrn.net%2Fstorage%2Fdocuments%2Fstatic-files%2Fconferences%2Ffourth%2Fmucha.pdf&ei=m1yET5GaKKPD0QWOvLGsBw&usg=AFQjCNHgldc1crAldkLauVR4b90cV7Tu8w Nelson, D. & Campbell, J. (2009). Understanding organizational behavior. Sydney: Cengage Learning. Snell, G. & Bohlander, S. (2009). Managing Human Resources, New York: Cengage Learning. Read More