[MUSIC] Hello everyone and welcome to session three of this online course where we will be discussing what a performance appraisal is. As well as the difference between performance appraisal and performance management. So, what is Performance Appraisal? According to the CIPD, Performance Appraisal or performance review is a process for individual employees and those concern with their performance typically line managers, to discuss their performance and development, as well as the support they need in their role. It's used to both assess recent performance and focus on future objectives, opportunities, and resources needed. But why should the manager use Performance Appraisals? Here are some of the reasons why you might like to perform a performance appraisal. To give employees feedback on their performance. To identify employee training needs. To obtain information which can be used to assist in the allocation of organizational rewards. For example, pay increases or bonuses. To obtain information which can be used for organizational diagnosis and development. But what are the differences between Performance Appraisal and Performance Management? The terms Performance Management and Performance Appraisal are sometimes used synonymously but they are different. Performance Management is a comprehensive, continuous and flexible approach to the management of organizations, themes and individuals which involves the maximum amount of dialog between those concerned. On the other hand, Performance Appraisal is a more limited approach, which involves managers making top-down assessments, and rating the performance of their subordinates at an annual performance appraisal meeting. In practical terms, Performance Management is about what you're going to do to help an employee continue in their development to become increasingly better in their performance for your organization. Performance Appraisal is how you evaluate the process being made by assessing or measuring the employee's actual performance on a regular basis over time. Another way to think of the difference between the two is that Performance Appraisal is about the past, meaning how the employee performed in the immediate past period. Being reviewed during the appraisal process. Performance Management meanwhile is focused on the present and the future. In the present, you're doing things in real time to help make sure the employee's performance reaches a desired level. With an eye on the future, you're also planning what can be done to further develop that employee's capabilities for periods to come. When you think about it, another way to distinguish between the two is to say that Performance Appraisal is a reactive process while Performance Management is a proactive process. Key differences between Performance Appraisal and Performance Management. The following are the major difference between Performance Appraisal and Performance Management. First of all, an organized way of evaluating the performance and potential of employees for their future growth and development is known as Performance Appraisal. The complete process of managing the human resources of the organization is known as Performance Management. Secondly, Performance Appraisal is a system, while Performance Management is a process. Number three, Performance Appraisal is inflexible, but Performance Management is flexible. Number four, Performance Appraisal is an operational tool, to improve the efficiency of the employees. However, Performance Management is a strategic tool. Number five, Performance Appraisal is conducted by human resource department of the organization. Whereas managers are held responsible for performance management. Number six, in Performance Appraisal corrections are made retrospectively. In contrast to Performance Management which is forward looking. Number seven, Performance Appraisal is having an individualistic approach, which is just opposite in the case of Performance Management. Number eight, Performance a\Appraisal is carried on eventually but Performance Management is an ongoing process. So what are the advantages and disadvantages of Performance Appraisals? These are some of the advantages of Performance Appraisals. They provide a document of employee performance over a specific period of time. They provide a structure where a manager can meet and discuss performance with an employee. They allow a manager the opportunity to provide the employee with feedback about their performance and discuss how well the employee goals were accomplished. They provide a structured process for an employee to clarify expectations and discuss issues with their manager. They provide the structure for thinking through and planning the upcoming year and developing employee goals. They can also motivate employees if supported by a good merit increase and compensation system. What are the disadvantages of Performances Appraisals? First of all, if not done right we can create a negative experience. In addition, Performance Appraisals are very time consuming and can be overwhelming to managers with many employees. Also, there will be some human assessment and therefore are subject to greater errors and biases. They can be a waste of time if not done appropriately and they can create a very stressful environment for everyone involved. So hopefully by now you have a clear understanding of what a Performance Appraisal is, how it can be useful in evaluating performance and how it differs from Performance Management. Join us for our next session where we'll be exploring some of the most well known performance evaluation tools and how they can be used in managing performance. Thank you. [MUSIC]
