Performance Appraisals vs Performance Reviews

Employees and management are sometimes confused about the difference between performance evaluations and performance assessments. These phrases are frequently used interchangeably, which is not helpful. However, we must recognise that there are significant disparities between the two.

The misconception is reasonable given that they are both instruments for measuring an employee's performance and fall under the same umbrella of the Performance management system.

When you look at these activities, it is easy to see similarities. Both performance reviews and performance assessments are often a look back in time, shining a light on the previous year's triumphs and challenges. Indeed, most of the criticism of the yearly appraisal or performance review is directed at this backward perspective.

What exactly is a performance review?

A performance review is conducted by managers for their employees where they review the employees' work and performance throughout the year, identify the employee's strengths and weaknesses, offer feedback and set goals for future performance reviews.

Reviews used to be done annually, but now they are more regular, with personnel being reviewed quarterly, monthly, or even weekly.

Some organisations are abandoning the formal process in favour of casual management drop-ins and one-on-one meetings with their employees to share comments and examine their work, reducing the need for a formal review.

When used properly, a performance review can assist an employee in understanding where they are succeeding and where they are failing, how they might develop, and how their present goals connect with the bigger corporate objectives.

Managers that effectively utilise performance reviews can recognise high-performing staff, communicate expectations more effectively, support growth and development, and increase employee engagement.

What about performance appraisal?

While a performance review focuses on recognising strengths and shortcomings and creating goals for the following term, a performance evaluation focuses on the employee's actual performance during the previous year.

Employee competencies, such as adherence to the company's fundamental values, desire to take the initiative, accountability for tasks, skill set and training, and so on, are also evaluated during performance appraisal.

Performance appraisal vs performance review

While both Performance Reviews and Performance Appraisals examine an employee's performance, there are a few crucial differences between the two:

Performance Evaluations

1. Performance appraisals are aimed at aiding employees in developing and improving their productivity and performance.

2. Performance management is systematically implemented and results in better organisational performance.

3. Performance appraisals increase communication among the organisation, management, and staff.

4. Performance appraisals examine an employee's performance both now and in the future.

5. Performance reviews are strategic because they regularly monitor employee performance and build employee development strategies.

Performance Appraisal

1. Performance appraisals are concerned with the actual performance of employees rather than the workforce's productivity.

2. Performance appraisals are carried out as needed and are frequently seen as an arduous process by both employees and HR.

3. Performance assessments can not solve perspective gaps since the goals of employees and HRS are often at odds.

4. Performance appraisals simply look at the employee's performance in the recent past.

5. Performance appraisal is operational since it adheres to a performance procedure and focuses solely on the outcome of the employee's performance.

Benefits of Reviews compared to Appraisals 

Both Performance Reviews and Performance Appraisals have advantages, and many of these advantages are shared. As we attempt to distinguish between the two, we will concentrate on the various benefits that each has to offer.

Performance reviews

1. Performance reviews take a holistic approach to evaluating the connection between workers and the organisation and exploring strategies to increase employee engagement.

2. As part of the Performance Management System, the Performance Review is flexible since it considers the organisation's growth, compensation, and salary.

3. It contains all essential personnel documentation, and managers can view it anytime.

Performance appraisals

1. Individualistic in nature, performance appraisal is concerned with employees and their prior performance.

2. Performance appraisals are typically rigorous since they are limited to a worker's past performance.

3. Everything is documented, and feedback forms are provided with the HR intervention.

Each organisation has its own set of competencies, fundamental beliefs, and objectives.

Performance evaluations ensure that goals are well-defined and that a continual feedback process is in place.

On the other hand, performance assessments reward individuals who achieve their objectives while adhering to corporate competencies and core values.

Performance evaluations are significantly more flexible than appraisals because they take many factors into account and focus on overall employee development.

Every organisation must take a comprehensive strategy for employee engagement and performance. While performance appraisals are required in any firm, developing development initiatives to improve employee performance and productivity following the appraisal process is also essential. This results in increased overall corporate productivity.

Source: Keka

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