How to Compare Performance Appraisal & Performance Management

Performance appraisals are written assessments of the contribution an employee makes to his employer. Performance management is the process by which appraisals are created and distributed. The human resources department creates and manages the system.

Typically appraisals are conducted quarterly and in the fourth quarter employees are issued raises and bonuses based on their performance appraisal. Performance management is an ongoing process. Effective performance appraisals occur in effective performance management systems. Performance management is a strategy used to improve an organization; performance appraisals are used to improve an employee's contribution to the organization.


    • 1

      Review your organization's goals, values and mission. Company goals, values and mission are a core part of the performance management system. These characteristics drive the company's results.

    • 2

      Analyze employee job descriptions and duties. The job descriptions and duties should align themselves to meeting corporate goals. Set employee goals to be met by the end of the year.

    • 3

      Determine whether meetings between managers and employees have been scheduled to discuss performance. Part of the performance management process and administration of performance appraisals is timely meetings throughout the year to set goals and discuss performance.

    • 4

      Decide whether a successful performance appraisal should be linked to compensation. Performance management is typically tied to raises and bonuses. This motivates employees to reach company goals.

    • 5

      Establish new goals for employees for next year. The performance management process is ongoing throughout the year. New goals are set and are added to the performance appraisal each year.

    • 6

      Compare and contrast your organization's performance management and performance appraisal process and review information from other, similar organizations. This will give some insight into changes that may be needed to your process or appraisal documents.

Tips & Warnings

  • Each company's performance management process and performance appraisal documents are different. Performance management can be implemented and conducted in many ways, and it should be done according to organizational strategy and culture. This is the only way to ensure that performance is based on the organization's goals and expectations.
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  • "Fundamentals of Human Resource Management"; Raymond Andrew Noe et al.; 2003.


  • Photo Credit performance report image by Christopher Hall from

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