Struggling to Distinguish Between Performance Management and Appraisal Systems – Can You Help?

Hello all,

I'm in my 4th semester of MBA and currently working on my project at a company. I have chosen "Performance Management System" as my topic. Initially, I thought it was different from "Performance Appraisal," but now I am finding it a little difficult to draw a clear distinction between the two. Can you please help me understand the difference? Thank you.

Performance appraisal is but only one part of the bigger process of performance management. So, the short answer is that performance appraisal (annual review, employee review) fits under performance management. Performance appraisal, on its own, doesn't result in great gains in performance or productivity.

Performance management is an ongoing communication process, undertaken in partnership, between an employee and his or her immediate supervisor that involves establishing clear expectations and understanding about:

- The essential job functions the employee is expected to do
- How the employee's job contributes to the goals of the organization
- What "doing the job well" means in concrete terms
- How employee and supervisor will work together to sustain, improve, or build on existing employee performance.

That's really informative. So, that means PMS has more scope than Performance Appraisal. Thanks.