Performance management: Appraising performance, providing feedback, and developing for creativity

Appraising and developing, both integral components of performance management are complicated endeavors for innovation. At all levels of the organization, employees face some type of performance evaluation. There are three related processes to describe activities associated with these formal evaluations. Performance appraisal is the process of assessing or evaluating performance to make decisions (e.g., about promotions). Performance development refers to the evaluation of performance with the goal of providing feedback and suggesting developmental activities to improve that performance. Performance management (PM) is the integration of the two in order to make performance-based decisions and improve organizational performance. Performance management consists of two central purposes (Murphy & Cleveland, 1995), and each has potential to enhance (or lessen) innovation. One PM objective is to align employee behaviors with the overarching goals of the organization. Since a key step in performance management involves the setting and evaluation of work goals, one would expect that organizations with more innovative missions would also have PM systems that encourage individual behavior toward this high-level objective.