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Annual Performance Review vs. Performance Management

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Performance Management: Development & Deployment

  • Format: Self-paced
  • Course Duration: 1 hr 18 mins
  • SHRM Professional Development Credits: 1.25
  • HRCI General Recertification Credits: 1.25
  • Certificate of Completion (after passing quiz)

Learn how to develop and deploy performance management methods for supporting a strong management team, one that openly communicates with its employees and works to maintain a collaborative environment. Performance management is an on-going, significant aspect of the employment cycle. It's essential for human resources to integrate the right feedback guidelines and principles into their organization's culture. This course is designed for HR professionals by an HR professional. It includes a complete overview of the Performance Management process and its overlap with the employment cycle. It also provides a review on setting performance criteria, developing goals and giving effective feedback. Finally, there's a lesson on annual performance reviews and trends. My mission is to help HR professionals succeed and this course will help you understand the performance management process and how you can implement it in support of your organization.

HR Jetpack is recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP. This program is valid for 1.25 PDCs for the SHRM-CP or SHRM-SCP. For more information about certification or recertification, please visit

This activity, has been approved for 1.25 HR (General) recertification credit hours toward aPHR™, PHR®, PHRca®, SPHR®, GPHR®, PHRi™ and SPHRi™ recertification through HR Certification Institute® (HRCI®). For more information about certification or recertification, please visit the HR Certification Institute website at
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Title: Annual Performance Review vs. Performance Management
Module: Formal Performance Review
Duration: 4:19

What's the difference between an annual performance review and Performance Management? In my experience, many organizations do NOT make this distinction and it's very important to do so.

The annual performance review traditionally follows a cycle. If you were to search for images online, you'd find a number of slightly different graphs with phases similar to the employment cycle.

I've seen quite a few that mention the word monitoring" as a phase…what comes to mind when you hear the word monitor"? I bet you weren't thinking of something positive. If you're being monitored, you'll always feel like someone is watching you…it doesn't give anyone the sense that they are a part of a collaborative, continuous improvement culture.

This is why I strongly recommend using the employment cycle as a means to embed the process into the business. Here's the key distinction. Performance Management is an on-going process in an effort to strive towards results. Your managers should be developing, performing and rewarding on a regular basis! This isn't a one-time event as I've already mentioned. The annual review is just one point in time. However, if you've been building and maintaining a performance management culture, the employee shouldn't be surprised by the discussion and feedback during the annual review. By the way, on-going feedback helps to reduce the frightening" aspect of a review.

Let's take a few moments to discuss the steps leading to and through the annual process.

Many organizations use some type of system to document performance criteria, goals and feedback. Remember this is where you step in as an HR professional in identifying the right system. Here's a typical step-by-step process.

First, we start by setting objectives and performance criteria.

Second, advise your managers to schedule monthly or, at the very least, quarterly reviews of such goals and criteria.

Next, as your team approaches its annual review season", you'll want your employees to start a self-evaluation. It should include a method for them to rate their competencies. In a previous lesson I mentioned the importance of assessing skills such as team work, focus on results, and communication.

Note, some organizations have an annual review based on an employee's start date in which case you just need to ensure the employee conducts a self-evaluation as appropriate.

Fourth, once an employee completes their review, the manager should consider this input as they conduct their own assessment. Remember the managers should assess the employee's competencies as well.

The fifth step is to hold the meeting; a great time to use the feedback guidelines from a previous lesson! It's also at this time the employee and manager can have a formal career development discussion.

And finally, the annual review document should be signed and closed.

What may be the most important aspect of the annual review and often times missed, is ensuring the manager has collected enough data on the employee's behavior and actions in achieving goals to accurately rate the employee. Evidence! As a part of the on-going performance management process, the supervisor must be gathering evidence to support the ratings.

In the next lecture, I'll address a few issues with the annual performance review.

Instructor: Christina A. Danforth

Christina A. Danforth, SHRM-SCP & SPHR, launched HR Jetpack in 2016 to support the development and professional growth of her fellow HR colleagues. She started her HR career in 2002. After obtaining her Master’s in Business Administration degree, Christina joined United Technologies Corporation. She moved across the United States...

Christina's Full Bio

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HR Jetpack® is an official SHRM Education Partner recognized by SHRM to offer Professional Development Credits (PDCs) for SHRM-CP or SHRM-SCP.

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