Talent management and performance management are terms you may hear used interchangeably in the human resources field. In reality, these concepts have very different functions and results, both short and long term.
Talent management refers to the way organizations prepare and keep employees with the company.
This may include developing staff for future leadership positions, increasing employee engagement or preparing for future growth. At an individual level, talent management provides opportunities for leadership to deliver stretch assignments that take an employee beyond the typical scope of their job.
Conversely, performance management measures the effectiveness of an individual or group as it relates to the overarching goals of an organization.
In many organizations, an annual performance review is utilized as a tool to reflect on an individual’s contribution throughout the year in accordance with their job description and expected functions. The results of an annual performance review is commonly used as a way to divvy out merit increases.
In an ideal setting, talent and performance management functions are tied closely together. These conversations should not be a once a year occurrence, but rather something that is incorporated into daily work. Doing so will keep both individual and organization goals in the forefront of every employee’s mind and drive business results.