Struggling with talent management software online jargon? Performance appraisal, performance review, performance management?

We regularly find people get confused with talent management software online jargon, and even when we are mentoring managers, they struggle with the difference between performance appraisal, performance review, and performance management. It is a legitimate question, as in lots of cases the terms are used interchangeably: however there are some very specific differences. The simplest differences to define are between performance management and the other two terms.

Performance management (or Perf Mgmt) is a living, breathing process. This should take place all year round, and could be better termed ‘managing performance’. It is a set of activities as opposed to an event, and in fact a performance appraisal or performance review should be seen as part of the annual performance management cycle. This table by What Is Human Resource is a great explanation of the differences between performance management and appraisal. Simply, performance management includes objective setting, setting development and training actions, one to ones, career discussion and appraisal/performance review.

In the labyrinth of talent management software online jargon, performance review and performance appraisal are generally considered to be the same thing. However, in reality there are some differences in how they are commonly used in the UK. First hand experience suggests the term performance review appears to be more commonly used in the Public and Not For Profit sectors. Certainly in the NHS, the term PDR or PDP (Performance and Development Review or Process) is well known. What is interesting is when you look at what each of these activities focus on. Both PAs and Performance Reviews tend to be a snapshot in time, generally focusing backwards on the previous year’s successes and challenges – a review of the last year or to appraise the last year. In fact, that backward focus is where much of the criticism of the annual appraisal or performance review is aimed: this concept of a snapshot in time or a once yearly conversation really doesn’t work within today’s fast moving society.

talent management software online
Do you understand what all these terms mean?

Another difference that we have found is that performance reviews tend to have a development bias (the term PDR is often used in the NHS – Performance & Development Review) and performance appraisals can tend to focus more on achievement of objectives – in reality we need to balance both, something talent management software online jargon usually doesn’t explain! If you consider the annual cycle, we should set objectives at the start of the year and then development should follow to support the achievement of these objectives. Development needs, therefore, should be discussed early enough in the annual cycle to help an individual to deliver their best rather than at the end of the year where it may be seen as a reward or worse, a token gesture. Strategically this should be seen as one synergistic performance management cycle, that is aligned with the aspirations and goals of the organisation.

Whichever terminology you prefer – performance appraisal, performance review, or performance management, the main thing to remember is that it should all be about quality dialogue between the manager and their direct report. We advocate the term performance management because it encompasses all of the different conversations that should take place on an ongoing basis if managers are to get the best out of their staff. This of course includes performance appraisal, but remember that it is not the be all and end all.

We have lots of supporting information on this topic, why not download our take a look at our knowledge bank of FREE white papers linked below, which help to explain the whole process in detail. Alternatively, book a FREE demo with us today!

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