Talent management and performance management are two related HR terms that mean different things. Talent management is a broader activity while performance management is just one of the many tasks that lives under the hub of talent management. Talent management focuses on the full journey of the employee through recruiting, onboarding, training, upskilling, and promotions. Performance management refers to measuring employee performance based on feedback and metrics and engaging employees to improve productivity and accomplish organizational goals. Savvy HR managers use advanced performance management software solutions to effectively develop, reward, and retain top talent.
What Is Talent Management?
The purpose of talent management is to ensure that the company has the right supply of talent to realize its strategic goals in the present and the future.
Talent management is a broader perspective encompassing performance management and involves disciplines to help employees drive growth and revenues and reduce operating costs. It includes recruiting, training, up-skilling, and rewarding employees to raise their performance and further strengthen their careers. There is certain software available that can aid the talent management process such as EPAY’s onboarding software solutions. Talent management is a broad term, but it is based on four pillars in line with business requirements:
An effective Talent management strategy can enable a business to reduce attrition and retain top talent by upskilling them with the latest industry skills. Using the right software, HR managers can gauge the effectiveness of talent management strategies. Essential features of effective talent management strategy includes:
- Recruiting and applicant tracking
- Learning and development
- Performance management
What Is Performance Management?
Performance management is an HR function that aims to give employees direction by developing their goals in line with the company’s needs. It is a systematic process by which companies involve their employees, as group members and individuals, in improving organizational effectiveness and achieving the company’s mission and goals. It includes:
- Planning work and setting expectations: Managers channel the efforts of individual employees and groups toward achieving organizational goals by setting performance goals and expectations. Elements and standards by which performance is measured should be understandable, verifiable, equitable, and achievable.
- Monitoring employee performance: Continuous monitoring allows managers to identify unacceptable or exceptional performance at any time. It involves measuring performance and providing feedback to groups and individual employees regarding progress toward achieving their goals.
- Developing employees’ capacity to perform: Performance management gives HR managers an opportunity to identify developmental needs. Managers can increase the capacity of individual employees by improving work processes, assigning work that introduces new skills, or providing training.
- Rating performance: This function involves rating an employee or a group within the organization against elements and standards laid out in an employee performance plan and assigning a rating for the record.
- Rewarding good performance: It is a vital HR function to recognize individual employees and groups for excellent performance and acknowledge their contributions to the mission of the organization.
Vital Role of Performance Management
Performance management plays a vital role in the success of employees, managers, and the company.
- For employees: It clarifies the description and success criteria of the job; motivates better performance; increases self-esteem; and enhances insight and development.
- For managers: It more clearly conveys supervisor views of performance; provides insight regarding individual employees; permits better differentiation between high and low performers; and results in more competent employees.
- For the company: Performance management clarifies organizational goals; facilitates change; promotes more appropriate and fairer administrative actions; and helps protect the organization against lawsuits.
Performance Management Tools
State-of-the-art performance management software has unique capabilities that can help HR managers recruit, develop, and retain the right talent for the long term. EPAY Systems human capital management software is a fully-integrated system with one streamlined workflow in one unified Human Capital Management platform. In addition to providing cloud-based time and attendance tracking that is fully integrated with payroll and tax management, EPAY Human Capital Management is designed to optimize HR management capabilities, including recruiting and applicant tracking, employee onboarding, and performance management.