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1. PM ASSIGNMENT
1.DifferenceBetweenPerformanceAppraisalandPerformance Management
Performance Appraisal
Performance Appraisal isdefined as an assessment of employees bythemanager, in whichhe/she
evaluates theoverall contributionmade bytheemployee totheorganization.
Performance Management
Performance Management is a continuousprocess thataims at planning,monitoring andevaluating the
objectives ofan employee andhis totalcontribution totheorganization.The basic purposeof
performance management is toencourage andimprove employee’s efficiency andeffectiveness.
DifferenceBetweenPerformanceAppraisalandPerformance Management
Basic ofdifference Performance appraisal Performance management
System Itis a formal system of
review and evaluation of
individual or team
performance.
Itis a goal-oriented system
toensure thatorganisational
processes exist tomaximise
theproductivityof
employees, teams and
ultimately the organisation
Time span Itis a periodic eventto
reflect and evaluate past
performance
Itis an ongoing
organisational processthat
is conductedtomaximise
theproductivityof
employees.
Objective Itsmain objectiveis to
identify strengthsand
weaknesses of anemployee’s
performance and todiscover
Itsmain objectiveis of
improving the
organisation’s effectiveness.

2. developmental goals
Focus It ismainly focusedonthe
individual’s pastmistakes
andmisbehaviours
Itis mainly focused on
individual’s growth.
Linking Itis linked tofinancial
rewards.
Can belinked tototal
rewards.
Perspective Ithas anindividualistic
perspective.
Ithas aholistic perspective.
Concentrated upon Largely concentratedupon
quantitative aspects of
performance.
Largely concentratedupon
qualitative aspects of
performance
Nature Itis rigid andinflexible in
nature.
Itis flexible and adaptablein
nature
Goal-setting Goal settingis doneforshort
tomid- rungoals
Goal settingis doneforlong-
rungoals.
Approach Its approachis operational. Itsapproach isstrategic
2.whatarethecharacteristicsofanunsuccessfulversusasuccessfulperformance
managementsystem?

3. Performance managementsystem:
Performance management system is thesystematic approach tomeasure the performance ofemployees.
Itis a processthroughwhichthe organizationaligns theirmission, goals andobjectives withavailable
resources (e.g.Manpower,material etc), systems and setthepriorities.
characteristicsofanunsuccessfulperformancemanagementsystem:
Therearesomeofcharacteristics unsuccessfulperformancemanagementsystem
 TheProcess Is NotStructured
 Goals Aren’t InThePicture
 LackOfCommunication
 Overemphasizing Recent Performances
 Annual Performance Evaluation
 NoRecognition/ Rewards
TheProcessIsNotStructured
One reason why performance management fails is that the process is not properly structured. It is not a
one-time process and needs to be repeated more often. It is not possible if you don’t have awell-designed
structure for performance management. Because the main reason behind having a performance
management process in an organization is to improve overall performance of the employees in the
organization.
So, a well-structured performance management system helps the employees understand the
organizational strategies betterandworktowardsachieving their goals withmore motivation.
Goals Aren’tInThePicture
In many organizations, employee goals aren’t in the picture when the performance review process is
carried out. Sometimes performance management also fails because wrong goals are chosen to optimize
the performance of the employees. In short, goals are important to keep employees motivated and
perform better.

4. LackOfCommunication
Sometimes, managers aren’t able to communicate what they expect from their employees. It isimportant
for them to communicate properly with the employees about the benefits of performance management.
Employees should be provided with necessary resources to improve themselves constantly and should
knowtheimportance ofcontinuous learning anda performance management system.
OveremphasizingRecentPerformances
This is one of the most common mistakes that managers/ HRs make. Performance managementprocesses
are plagued with various biases in general. Regency bias is one of them. This is an unconscious bias since
part of the problem can be attributed to memory and the way the mind makes associations. But it is a
dangerous bias all the same. Very simply, it is because regency bias can make or break a performance
review. So overemphasizing recent performance can result to failure of the performance management
system.
AnnualPerformance Evaluation
Performance evaluation is valuable only when it is carried out on a regular basis. Annual performance
review is not enough for any organization. Some mangers claim that it consumes a major portion of their
time. But if performance evaluation is carried out annually, employees have to wait for a year to give or
receive feedback;whichis notgoodfortheorganization’s productivity.
So,annual performance evaluation isone reason whyyourperformance management system couldfail.
NoRecognition/Rewards
Appreciation and recognition are very important to keep your employees inspired and to drive
productivity. A performance management system that doesn’t include recognition and rewards for
employee performance tends to fail more easily. It is important to keep track of employee performance
andappreciate theirgoodwork.
characteristicsofansuccessfulperformancemanagementsystem:
There are some ofcharacteristics unsuccessful performance management system

5.  accurate and fair
 efficient.
 elevate performance
 Compensation decisions
 multiple datasources
 formal development oncoaching skills
Thesystemmustbeaccurateandfair.
Amanager doesnotalways see an employee’s performance accurately or comprehensively. Onlyby
obtainingmultiple perspectives canthe system achieve fairness andaccuracy. Individual performance is
always a combination oftheskills and capabilities ofanindividual putinthecontext ofajob.Some jobs
are easy andothers are difficult.
Thesystemmustbeefficient.
Insome cases, systems can takean inordinate amount oftime. Theyendupdetracting fromperformance
instead ofelevating it. Theprogram mustbemore thana “boxchecking“ process ora flurryof paperwork.
Bottomline, it shouldimprove thewaythatpeople perform.
Thesystemshouldelevateperformance;notjustmeasureagainstlowerlimits.
Traditional performance management practices have focused oninsuring thatsubordinates were
meeting minimal performance expectations,rather thanlookingat thepotential upperlimits. An
effective systemshould clearly link theindividual’s performance tothe organization’s strategic objectives
andcurrent initiatives. Itshouldemphasize aculture oftaking responsibility, whichgoesbeyondmaking
peoplemerely feeling accountable.
Compensationdecisionsshouldbeabyproductofperformance management.
Compensation decisions shouldnotbethemain reasons forits existence, norshouldcompensation bein
thedriver’s seat.We wouldarguethatonly onediscussion each year shoulddeal withcompensation.
Furthermore, thereality is thatthe greatbulkofsalary increases are driven bythechanges incost of
living. Thedifferences in increases forthegreat bulkofpeople inthemiddle of thecurve are miniscule.

6. Yes,there are a fewpeople attheextremes whosecompensation will bestronglyinfluenced bythe
performance management system.A fewpoorerperformers will getminimal orno raises. Attheother
end,a fewtopperformers will getlarge raises. Organizationsare beginning torealize thatmany groupsof
peopleinside theirfirm are notneatly distributedon anormal curve.
Thesystemshouldusemultipledatasources.
Every system shoulduse some formof multi-rater feedback.Managers whorely solely ontheir
perceptions ofa person’s performance will introduce acertain amount of“rater bias.” Themanager can
informally collect multiple inputs.Themanager canalso use some instruments tocollect thisdata.When
themanager’s view is augmentedwith twopeersandtwosubordinates,rater bias is erased, allowing the
system toevaluate performance accurately.
Theprocessshouldincludeformaldevelopmentoncoachingskills.
Thecommon element inthe greatmajority of recently implemented performance management systems
is frequentcoaching conversations. However, coachingand providingfeedbacktoothers are skills that
don’tcome naturally toeveryone. The goodnewsisthatmanagers can acquire theseskills through
formal learning methodsthatinclude:
 Clarifying theoutcomes beingsoughtfrom coachingconversations.
 Understandingthespecific action stepsrequired.
 Observingothers coachingcorrectly (live oronvideo). Nothingcompares towatchingsomeone
doitright.
 Practicing andrehearsing thoseskills until yougain competence andconfidence in using themin
real situations.