Talent Management

Importance of Integrating Performance Appraisal with Performance Management System

By January 4, 2021 No Comments

One of the key factors and driving forces behind the success of the organization is the combined effort and efficient workforce productivity of its employees. But the kind of evaluation format processed by the organization is one of the biggest questions, as the recognition and development of employees rely on it. Some employees work silently but do not show themselves, while there are also such employees who put up a show but hardly perform. For organizations that haven’t yet pursued a performance management system and performance appraisal activities may often use the terms in the same context, but there is a thin line of difference in it. The difference is subtle but still distinct.


Performance Appraisal is defined as an assessment of employees carried out by the HR department annually, in which they evaluate the overall contribution made by the employee to the organization. It is implemented on a top-down basis in judging the performance of an employee without soliciting the active involvement of the employee. The main objective of the performance appraisal system was to employ control over the tasks of the employees through disciplinary actions and management of rewards and promotions. It is a perceptive function that only evaluates the past performance of employees, but more often than not, the supervisor or manager plays the role of a judge and has the final word.


  • When implemented without an overall performance management plan, it typically causes high stress and low confidence for staff. Without a goal or a strategic plan, appraisals do not enable employees towards greater performance display or closer to acquiring organizational goals.
  • Performance appraisals are very time absorbing and can be quite taxing to managers with many employees if not done appropriately. Think about the time investment when the result is not beneficial.
  • Performance appraisals are very single dimensional in terms of communication because it has a very top-down approach towards employee performance. The discussion takes place only after the evaluation of the performance appraisal process.
  • Managers often face difficulties to recall what the employee achieved over the last year. They may end up entrusting on indistinct impressions or focusing on how the employee performed the past couple of weeks.
  • The process is usually rigid because it is only confined to an employee’s past performance. It has little to do with his growth and does not focus on the employee’s performance productivity.


A performance management system aids HR managers to initiate clear performance beliefs through which employees can positively recognize what is expected of their job. It allows managers to support their employees, individual accountability to meet their goals, and assess their performance. It consists of a multitude of vital HR functions like continuous progress review, real-time feedback & communication, training employees, recognizing & rewarding improved performance, goal-setting, etc. When a performance appraisal is implemented with a well-structured performance management system, it can be a valuable tool for hiring and promotion decisions. When executed constructively, performance appraisals can help in the growth of employee morale, productivity, and job satisfaction. As part of the system, performance appraisals can play a crucial part in identifying areas that need improvement, aiding management in deciding on corrective actions to take to get employees on the right track and pursue company goals. Ultimately, the two processes should be used in conjunction to augment performance among employees and to enhance the workforce productivity of your organization.

In the end, while performance appraisal is compulsory in an organization, designing the developmental program for improving the employee’s performance and productivity after the appraisal process is also essential. So, choosing an integrated HR suite like PeopleWorks HCM provides transparency, supervision, support, and recognition to both employees and the organization.

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