Companies are moving away from ‘appraisal’ towards ‘evaluation’, a continuous, measurable and objective process, more motivational for employees and more reflective of the way they work today.
The classic definition of performance management is, “a process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance” (Armstrong and Baron, 1998). This underlines its ongoing nature, aimed at continuous improvement for the benefit of both the individual and the organisation.
Its role is to ensure that individuals understand their expected contribution to business objectives, and to make sure they are motivated and equipped with the skills and support to achieve this.
Performance management should be both strategic – about broad issues and long-term goals – and integrated – linking people management, individuals and teams. It should incorporate:
- performance improvement – throughout the organisation in relation to individual, team and organisational effectiveness
- development – performance will not improve unless there is continuous development of individuals and teams
- managing behaviour – ensuring individuals are encouraged to behave in a way that allows and fosters better working relationships.
Effective performance management is also about sharing expectations in an organisational culture where individuals and groups take responsibility for the continuous improvement of business processes and of their own skills, behaviour and contributions.
the performance management process
It’s a joint process: managers should communicate what they expect of individuals and teams, while individuals and teams can communicate their expectations of how they should be managed, and what support and resources they need to do their jobs. Performance management is also about maintaining and improving the quality of relationships – between managers and individuals, between managers and teams, between members of teams and so on.
Appraisal should not be confused with performance management: it is one of a range of tools used to manage performance, which include:
- setting objectives – as shown in ‘holding a successful appraisal meeting’
- the appraisal or performance review meeting – as above
- 360-degree feedback – as set out in ‘types of appraisals’
- learning and development – note the shift from ‘training’ to ‘learning, as set out in ‘building a learning organisation’.
Opinions vary as to whether pay and promotion should form part of the appraisal process. While there are good reasons to do so, the Chartered Institute of Personnel and Development (CIPD) found the two uses of appraisal – for learning and development purposes and for administrative purposes of informing decisions on pay and promotion – involve different cognitive processes, so it can be more productive to focus on the two strands in different meetings.