1. Difference between performance management and
performance appraisal
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I. Contents of getting difference between performance management and
performance appraisal
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Regardless of size, all businesses need to employ various tools to assess progress and efficiency.
Most of these tools relate to evaluating processes, employees, products and quality to ensure that
the company is meeting the requirements and promises of production and client service.
Performance management and performance appraisal are two such tools managers use to run a
company.
Definition
The first difference between performance management and performance appraisal is definition.
Performance management is a set of activities and evaluations that ensure the company is being
effective and efficient in the process of meeting its goals. It analyzes and concentrates on various
elements inside the company structure, such as the overall performance of the company, the
performance of a specific department, phases of producing a product or service and employee
performance. Performance appraisal is the specific analysis of the performance of employees
inside the company. It evaluates the employee's work and quality for the year. Performance
appraisal can be considered one step in the greater effort of performance management--a step

2. that focuses on the employee's past performance--while performance management is an ongoing
process that evaluates day-to-day performance.
Supervisor Tasks
Managers and supervisors are vital to both methods of assessment. In performance management,
the supervisor or manager acts as a coach, someone who is driving every employee and structure
in the department he is in charge of to achieve a common goal through constant encouragement.
He then plans and sets realistic expectations, finally measuring the results on a daily or weekly
basis. In performance appraisal, the supervisor acts more like a judge of the employee's work and
performance, and he generally does so through a face-to-face interview (annual or semiannual).
The supervisor evaluates the employee's performance, identifies weaknesses and strengths in the
employee's work and sets plans for how to improve on those weaknesses by utilizing the
employee's strengths. Employers and managers can use the results of performance appraisal to
achieve goals through performance management's daily approach.
Methods
The methods employers use in performance appraisal are more structured and formal than the
methods in performance management, and they usually consist of specific evaluations that rate
employees in specific areas of performance based on the company's goals. Performance appraisal
sets a high performance measurement to show employees what is expected and encourage them
to meet those expectations. The methods used in performance management are more flexible
than those used in performance appraisals, since performance management bases itself on daily
performance. For this reason, its parameters for evaluation are more tangible. It has ideal
performance goals as guidelines, but it is not fully invested in these ideals. Rather, it is sensitive
to what an employee can realistically achieve in a day of work.
These two types of performance measurement, put together, create a powerful tool for
management and evaluation, allowing the company to achieve a higher level of performance.
==================
III. Performance appraisal methods

3. 1.Ranking Method
The ranking system requires the rater to rank his
subordinates on overall performance. This consists in
simply putting a man in a rank order. Under this method,
the ranking of an employee in a work group is done
against that of another employee. The relative position of
each employee is tested in terms of his numerical rank. It
may also be done by ranking a person on his job
performance against another member of the competitive
group.
Advantages of Ranking Method
i. Employees are ranked according to their performance
levels.
ii. It is easier to rank the best and the worst employee.
Limitations of Ranking Method
i. The “whole man” is compared with another “whole man”
in this method. In practice, it is very difficult to compare
individuals possessing various individual traits.
ii. This method speaks only of the position where an
employee stands in his group. It does not test anything
about how much better or how much worse an employee
is when compared to another employee.
iii. When a large number of employees are working, ranking
of individuals become a difficult issue.
iv. There is no systematic procedure for ranking individuals
in the organization. The ranking system does not eliminate
the possibility of snap judgements.
2. Rating Scale
Rating scales consists of several numerical scales
representing job related performance criterions such as
dependability, initiative, output, attendance, attitude etc.
Each scales ranges from excellent to poor. The total
numerical scores are computed and final conclusions are
derived. Advantages – Adaptability, easy to use, low cost,
every type of job can be evaluated, large number of
employees covered, no formal training required.
Disadvantages – Rater’s biases

4. 3. Checklist method
Under this method, checklist of statements of traits of
employee in the form of Yes or No based questions is
prepared. Here the rater only does the reporting or
checking and HR department does the actual evaluation.
Advantages – economy, ease of administration, limited
training required, standardization. Disadvantages – Raters
biases, use of improper weighs by HR, does not allow
rater to give relative ratings
4. Critical Incidents Method
The approach is focused on certain critical behaviors of
employee that makes all the difference in the
performance. Supervisors as and when they occur record
such incidents. Advantages – Evaluations are based on
actual job behaviors, ratings are supported by
descriptions, feedback is easy, reduces recency biases,
chances of subordinate improvement are high.
Disadvantages – Negative incidents can be prioritized,
forgetting incidents, overly close supervision; feedback
may be too much and may appear to be punishment.
5. Essay Method

5. In this method the rater writes down the employee
description in detail within a number of broad categories
like, overall impression of performance, promoteability
of employee, existing capabilities and qualifications of
performing jobs, strengths and weaknesses and training
needs of the employee. Advantage – It is extremely
useful in filing information gaps about the employees
that often occur in a better-structured checklist.
Disadvantages – It its highly dependent upon the writing
skills of rater and most of them are not good writers.
They may get confused success depends on the memory
power of raters.
6. Behaviorally Anchored Rating Scales
statements of effective and ineffective behaviors
determine the points. They are said to be
behaviorally anchored. The rater is supposed to
say, which behavior describes the employee
performance. Advantages – helps overcome rating
errors. Disadvantages – Suffers from distortions
inherent in most rating techniques.
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