Key Differences Between Human Resource Management and Performance Management- Talentedge (2022)

Human Resource Management

Nothing we do is more essential than hiring people. At the end of the day, you depend on people, not strategies. This thought is the quintessential idea behind the significant functionality of Human Resource Management in today’s corporate sector. Recruiting the right people is a monumental task that requires vast interpersonal skills and intellectual dexterity. HR online courses equip HR professionals with peer interaction, people management and make their position in the company replete with job security. XLRI Online certified HR management course aims at providing knowledge to HR managers to maintain optimal employee relations and measuring the efficacy of talent management.

Performance Management

In Performance management, before you win in the market place, you should first win in the workplace. Performance management is a perennial process of communication between a supervisor and a subordinate. XLRI Online certified HR management courses seek to continuously measure, identify, and develop the performance of the workforce by devising new methodologies to elevate employee performance. Clarifying expectations and identifying goals are taught in HR online courses from reputed e-learning platforms.

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Key Differences Between Human Resource Management and Performance Management

The seminal differences between Performance Management and HR Management lie in their orientation, scope, and treatment of manpower concerning organizational procedures and directives.

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  • The scope of performance management is limited where workers are regarded as tools. The behaviour of workers can be manipulated according to the organisation’s core needs and they’re replaced when their job is done. On the contrary, HR Management considers employees as valuable assets to the organization. Promotion of mutuality in terms of goals, reward, responsibility is the top-level hallmark attribute of HR management.
  • Manpower is treated as machines or tools in Performance management. HR Management considers man/women power as valuable assets to the organization.
  • Performance management has routine functions like planning and monitoring. HR management deals with the strategic aspects of the organization’s working such as recruiting, screening, conducting interviews, and also assimilates itself into the overall organizational strategy to attain ascendancy in organizational objectives.
  • The basis of remuneration in performance management is job evaluation. In the case of HR management, performance evaluation of employees with its subtle layers of efficiency and productivity in different business sectors are considered for remuneration.
  • Labour management in performance management consists of collective bargaining. HR Management deals with individual contracts for employees, the rationale being that each employee is considered as a special asset with differentiated levels of talent and assigned responsibilities.

Human Resource Management has come up with certain improvements over Performance management thus resulting in the eradication of certain shortcomings in Performance management. In this age of intense competition, the organization must prioritize manpower and place their needs at the apex of the company’s core objectives. Human Resource Management has played a pivotal role in eliminating the practice of treating employees as machines. HR Management has taken massive strides in the art of business management to bring synergy between the organization and its employees for working towards a common purpose.

Organizations are getting increasingly focused on employee well-being. They are willing to alter the old practices of employee performance management and want to try new things. HR professionals are also waking up to the changes in the performance management domain and interested in taking up a performance management course that can augment their learning and helps them stay ahead of others in the HR domain.

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Performance management as a vertical is seeing a host of changes. A recent study from Mercer concludes that 50 percent of employers are planning to change their approach to performance management in the next one and a half years. Out of these, 48 percent of employers are planning to make drastic changes to their performance management systems. 67 percent of those say that the changes need to be revolutionary in nature in order to make a real impact. This is happening because companies are realising that their processes of evaluation of employees are not just traditional, they are obsolete to an extent.

Organizations believe that there are fundamental changes required in the performance management practices of companies if they want to build a culture of high performance. This is also critical if they want to stay relevant in the minds of current and future employees.

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In the quest for making relevant changes to the performance management domain, companies need to adapt to the key trends in this domain. Some of the main trends are listed below –

Continuous Evaluation Instead of Annual Appraisal

One of the biggest changes will be in the frequency of performance appraisal. The current structure of annual appraisal misses out on the big picture. Instead of this, there should be continuous dialogue between the organization and the employees. This will drive the employees to improve themselves on a regular basis. It will also provide them with immediate feedback on a job well done and motivate them. Continuity in the evaluation will also foster an environment of constructive feedback which will create a productive atmosphere in the organization.

Do Not Label Employees

The appraisal system of today tries to label employees by their rankings. The rankings stick to the employees for the rest of the year and affect not only their morale but also the perception of people who work with them. The ranking process can be done away with and instead of that a holistic assessment process can be brought in.

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Evolution of Performance Appraisal as a Motivator

In an effort to closely link the values of the organization, a company must enable the employee to give their best performance instead of trying to force-fit them. This should become a mantra for the company and applicable in a continuous manner.

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Create an Environment of Learning

One of the key features of a productive environment is the ability of the employees to learn and unlearn. As new technology replaces the old, the old ways of working should also be replaced along with old ways of thinking. Organizations need to continuously encourage the employee to keep learning and adapting. To make learning a continuous process, managers must also become teachers. As mentors to their team, they can motivate them and become their soundboard when required. This will foster an environment of trust as well as decrease attrition since employees will be able to share with each other in a more positive manner.

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One Size Does Not Fit All

To get effective results out of a performance management system, the company must strive to assess employees as per their job requirements. Not all employees should be rated on the same scale. Instead, different subsets of employees should be assessed differently.

According to a report from Deloitte, revamp of performance management is a primary focus of 79% of top HR executives. They want to make performance dialogue more meaningful than it is currently, for their organizations.

Companies need to provide a framework to the managers in the organization to get effective 360-degree feedback from the employees. A 360-degree evaluation will allow for feedback not only for the employee but also for the organization from the eyes of the employee. They should also minimise unnecessary processes and hierarchy to ensure that the feedback reaches the right ears. All these steps will make the overall employee experience better.

It is vital that an organization works towards making the experience of its employees holistic and performance-driven. The performance should be rewarded on time and improved ahead of time. Companies need to take cognizance of the fact that this is an employee-driven market. The best talent will come only when the organization makes an honest effort in becoming an employer that appreciates a good performance.

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More Information:

Become a Human Resource Manager

Characteristics of Leadership and Management

How to Find Human Resources Job Opportunities?

How to grow your career in Human Resource Management in 2022?

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FAQs

What is the difference between performance management and human resource management? ›

The scope of performance management is limited where workers are regarded as tools. The behaviour of workers can be manipulated according to the organisation's core needs and they're replaced when their job is done. On the contrary, HR Management considers employees as valuable assets to the organization.

Is SHRM differs from human resource management justify your answer? ›

Human resource management (HRM) implies the governance of manpower of the organization in a thorough and structured manner. SHRM is a managerial function which implies framing of HR strategies in such a way to direct employees efforts towards the goals of the organization. It exhibits leniency.

What are the key differences between HRD and HRM and their components? ›

HRD is a subsystem of HRM and draws many functions, attributes, and processes from HRM. HRM deals with and has concerns for people only. It handles recruitment, rewards, etc. HRD is concerned with the development of all aspects and people within an organization and manages its skill development processes.

What is the relationship between HRM and performance management? ›

Managers use performance management systems to assess and reward the behavior of their employees. Additionally, a strategic human resource management function handles the recruiting, interviewing, hiring and development of all personnel required to ensure your company can achieve its goals.

What is the differences between PM and PA? ›

Performance management proactively manages an employee's performance and ensures that the employee has accomplished all the goals, vision, mission and the core values of the organization. Performance appraisal only looks at the employee's performance objectively for the year and give a final feedback to the employee.

What is the difference between human resource and human resource management? ›

The overall aim of HRM is to improve the overall employee performance whereas the objective of HRD is very specific to enhancing the skills, competency levels and knowledge base of employees.

What is the relationship between HRM and SHRM? ›

So, HRM is related with employee performance, and SHRM is related with business performance. SHRM aims to increase business performance through individual performance. HRM aims to increase employee performance so that employees effectively do their task duties in business functions.

What is strategic HRM its process and how it is different from conventional HRM? ›

Unlike the traditional HRM, Strategic HRM uses more systematic tools. While the traditional HRM focuses mainly on employee relations, Startegic HRM focuses on partnerships with internal and external customers. When HRM has only short-term goals, Strategic HRM has long-term goals.

What is performance management in an organization? ›

About Organizational Performance Management

It is a comprehensive evaluation of not just are you doing things right, but whether you are doing the right things. Organizational performance management focuses on individual employees, as well as on teams, programs, processes, and the organization as a whole.

What is human resource management and development? ›

HRM is a coherent and holistic approach to the management of people that requires and develops organisational structures and systems, individual attitudes and behaviour. Commonly, HRD refers to 'training' or development of skills and is regarded as part of HRM.

What are the functions of human resource management? ›

What Does an HR Manager Do? 7 Functions of the Human Resources Department
  • Recruitment and Hiring.
  • Training and Development.
  • Employer-Employee Relations.
  • Maintain Company Culture.
  • Manage Employee Benefits.
  • Create a Safe Work Environment.
  • Handle Disciplinary Actions.

What is performance management with example? ›

Examples of performance management processes or tools include performance appraisals, key performance indicators (KPIs) and management dashboards. Essentially, performance management is what organisations do to become more successful and stay ahead of their competitors.

What are the 3 types of performance management? ›

3 Types Of Organizational Performance Management Systems
  • The Balanced Scorecard. ...
  • Management By Objectives. ...
  • Budget-driven Business Plans.

What is the importance of performance management? ›

Effective performance management is essential to businesses. Through both formal and informal processes, it helps them align their employees, resources, and systems to meet their strategic objectives.

What is performance management process? ›

Performance management is a communication process by which managers and employees work together to plan, monitor and review an employee's work objectives and overall contribution to the organization.

What are the characteristics of performance management? ›

4 qualities of effective performance management
  • Fairness, transparency, and accuracy.
  • Goal alignment and tracking.
  • Developmental coaching and feedback.
  • Accountability and recognition.

What are performance management skills? ›

Performance management skills refer to the ability of an individual to ensure that the work of those working under his supervision supports and furthers the goals and objectives of the organization.

What is the meaning of human resource management? ›

Human resource management, HRM, is the department of a business organization that looks after the hiring, management and firing of staff. HRM focuses on the function of people within the business, ensuring best work practices are in place at all times.

What are the three key elements of the human resources planning model? ›

The three key elements of the HR planning process are forecasting labour demand, analysing present labour supply, and balancing projected labour demand and supply.

Why is strategic human resource management important? ›

Strategic Human Resource Management is essential for retaining the best talent and development of human resources. It focuses on making employees feel valued and engaged so that they are motivated to stay with the company.

Why is human resources important to an organization? ›

HR plays a key role in developing, reinforcing and changing the culture of an organisation. Pay, performance management, training and development, recruitment and onboarding and reinforcing the values of the business are all essential elements of business culture covered by HR.

What is the relationship between HR functions and competitive advantage? ›

Competitive advantage in HR definition

Competitive advantage in HR refers to the quality of the employees who can not be copied, unlike company's systems and processes. It comes down to the fact that companies with better employees have the competitive advantage.

How do you see the two the role of HRM in strategic management process? ›

ROLE OF HRM IN STRATEGIC MANAGEMENT
  1. Role in Strategy Formulation: HRM is in a unique position to supply competitive intelligence that may be useful in strategy formulation. ...
  2. Role in Strategy Implementation: HRM supplies the company with a competent and willing workforce for executing strategies.
31 Jul 2012

Which function of HRM stands first in the list of HRM functions? ›

The first important function of HRM is securing and employing the right type of personnel according to the needs or requirements of the organization. For effective performance of procurement function, HRM has to perform a number of functions such as manpower planning which gives the estimate of manpower requirements.

What are the main barriers that prevent an organization from taking a more strategic approach to HR? ›

BARRIERS TO STRATEGIC HRM –

Short-term mentality/focus on current performance. The inability of HR to think strategically. Lack of appreciation for what HR can contribute. Failure to understand line manager's role as an HR manager.

What are the 4 purposes of performance management? ›

A performance management system consists of the processes used to identify, encourage, measure, evaluate, improve, and reward employee performance at work.

Who is responsible for performance management? ›

The employee's manager is responsible for providing the guidance, encouragement, and correction necessary to make the employee as high performing as possible, and then keep the employee performing in that manner. It is the employee's responsibility to ask for and adopt guidance on how they can perform better.

What are the 4 performance management steps? ›

Four Steps To Effective Performance Management
  • Step 1: Getting The Right People. In sports, the coaches with the best records are usually the best recruiters; the same applies in the workplace. ...
  • Step 2: Setting Expectations. ...
  • Step 3: Performance Coaching. ...
  • Step 4: Getting Rid Of The Poor Performers. ...
  • Conclusion.
7 Jan 2015

What is human resource development Short answer? ›

HRD is "the process of increasing the knowledge, the skills, and the capacities of all the people in a society. In economic terms, it could be described as the accumulation of human capital and its effective investment in the development of an economy.

What are the 10 examples of human resources? ›

What are the functional areas of human resources?
  • Recruiting and staffing employees.
  • Employee benefits.
  • Employee compensation.
  • Employee and labor relations.
  • Human resources compliance.
  • Organizational structure.
  • Human resources information and payroll.
  • Employee training and development.

What is total performance management? ›

Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization.

What are the different types of performance management tools? ›

Top 9 performance management tools to maximise productivity
  • One-on-one performance check-ins. ...
  • The 5As approach to goal setting. ...
  • Real-time feedback. ...
  • Personal development plans (PDPs) ...
  • Reward and recognition schemes. ...
  • A wellbeing scheme. ...
  • An excellent onboarding process. ...
  • Employee surveys.
17 May 2017

What are the 6 steps in performance management process? ›

Six Steps to Effective Performance Management
  1. 1) Commitment from the top (The process is alive!)
  2. 2) Clear objectives.
  3. 3) Balanced feedback.
  4. 4) Regular progress reviews.
  5. 5) Development plans.
  6. 6) Capable managers (with the right skills)
23 May 2013

What are the 4 tools of performance? ›

This document outlines four performance management tools: Balanced Scorecard, Baldrige, Lean and Studer. These tools have been identified by the National Rural Health Resource Center as effective methods for managing performance improvement with small rural hospitals.

How can performance management motivate employees? ›

Performance management impacts team performance by helping people leaders build positive relationships between team members and create a culture of feedback that motivates employees to work better together.

What are the 3 types of performance management? ›

3 Types Of Organizational Performance Management Systems
  • The Balanced Scorecard. ...
  • Management By Objectives. ...
  • Budget-driven Business Plans.

What is HR role in performance management? ›

Human resource department plays an important role in designing and implementing performance appraisals. Infact, the HR team acts as mediator between the functional heads or reviewing authorities and the employee. It is the human resource team's responsibility to ensure a smooth implementation of the appraisal process.

What do you mean by performance management? ›

Performance Management - Definition

Performance management is an ongoing process of communication between a supervisor and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization.

What are the 3 purposes of performance management? ›

Performance management is the process an organization follows to make sure employees know the roles they play and the objectives they'll need to follow to be successful.
  • Increased employee motivation.
  • Improved employee morale.
  • Increased retention.
  • Consistency among departments.
11 Nov 2019

What are examples of performance management? ›

Examples of performance management processes or tools include performance appraisals, key performance indicators (KPIs) and management dashboards. Essentially, performance management is what organisations do to become more successful and stay ahead of their competitors.

What are key elements of performance management? ›

While there are many elements that go into performance management there are perhaps five key areas that are fundamental to its success:
  • Planning and goal setting.
  • Management and employee involvement.
  • Monitoring and feedback.
  • Development and improvement.
  • Reward and compensation.

What is the importance of performance management? ›

Effective performance management is essential to businesses. Through both formal and informal processes, it helps them align their employees, resources, and systems to meet their strategic objectives.

What are the 4 performance management steps? ›

Four Steps To Effective Performance Management
  • Step 1: Getting The Right People. In sports, the coaches with the best records are usually the best recruiters; the same applies in the workplace. ...
  • Step 2: Setting Expectations. ...
  • Step 3: Performance Coaching. ...
  • Step 4: Getting Rid Of The Poor Performers. ...
  • Conclusion.
7 Jan 2015

Who is responsible for performance management? ›

The employee's manager is responsible for providing the guidance, encouragement, and correction necessary to make the employee as high performing as possible, and then keep the employee performing in that manner. It is the employee's responsibility to ask for and adopt guidance on how they can perform better.

What is performance management in HRM PDF? ›

Performance management can be defined as a systematic process to improve organizational performance by developing the performance of individuals and teams working with an organization.

What are the 4 purposes of performance management? ›

A performance management system consists of the processes used to identify, encourage, measure, evaluate, improve, and reward employee performance at work.

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