The terms Performance Appraisal and Performance Management have been used interchangeably in the literature to describe the same process, yet there are important differences between the two systems. Performance Appraisal involves rating the past performance of the employee and setting new performance objectives, whereas Performance Management uses past performance as a platform to improve future performance. A Performance Management System (PMS) benefits the organisation by ensuring that the day-to-day activities of employees are aligned with, and promote the organisations' goals. The employee benefits by having regular feedback on performance and being provided with development opportunities to improve their performance. A critical aspect often overlooked is that not only goal achievement is important, but how the goal was achieved is equally important, the corporate responsibility aspect.
It is unrealistic to expect that when a PMS is implemented, employees will immediately be motivated to perform better, and any performance issues (perceived or real) will be immediately resolved. To realise the full potential benefits from the PMS, the organisation must be prepared to invest resources to ensure that the employees and managers "own" the system, otherwise it will be treated as a compliance activity and neither the employees nor the organisation will benefit from the system. No PMS will ever be perfect or complete, and as the organisation evolves, so must the PMS evolve with the organisation.
This report will review the common issues encountered with PMS, and provide recommendations for implementing a PMS within an organisation.
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