While they have similar names, talent management and performance management serve two very different purposes. The former is about recruiting, retaining and rewarding employees, while the latter is a more niche examination of employee performance using metrics and feedback.

Talent management aims to ensure that your organisation is future-ready by constantly upskilling and reskilling your current workforce while recruiting the right talent.

• What are its main functions? Basically, anything that encourages strong performance and empowers employees to fortify their career pathways. Think recruitment, learning and development, performance management, and retention.
• Why is it important? Recruitment is only a 1/4 of the job. Retaining and developing talent that is unique to your organisation and needs is the name of the game. Talent management ensures you have the right resources when you need them, a real-time succession plan, improved employee engagement and less turnover thanks to strategic hiring.

The specs will look different for your organisation, but the steps are largely universal for anyone creating a talent management strategy:

1. Identify key organisational goals and priorities
2. Spotlight any organisational drivers and challenges
3. Undertake a skills gap analysis
4. Build HR objectives and priorities
5. Track and measure new HR directives.

Remember: Talent management is as much about ensuring you’ve got the right people with the right skills already as it is about recruiting externally. Sometimes upskilling and reskilling is more effective than searching outwards. 

While talent management concerns itself with the workplace at large, performance management delves deeper into individuals or team development. Its purpose is to align employee goalsetting with organisational needs.

• What are its main functions? Traditionally all about promotions, renumeration and discipline, today the focus is holistic. That means setting expectations to employees, continuously monitoring individual performance, giving weight to certain behaviours and thought processes against organisational standards, recognising outstanding performance and developing employees’ ability to self-evaluate.
• Why is it important? It’s vital not only to your employees’ day-to-day work but also their career with your organisation. By clearly outlining the responsibilities and success criteria of a job role, you motivate employees to perform better and strive for innovation. These employees therefore require less oversight from managers and lead to more efficient teams which leads to a higher performing organisation.

You won’t need to throw out any common performance appraisal resources you already use. Rather, it’s the scale you use to measure the proficiency or excellence of employees that might need a little refresh:

1. Define your organisation’s mission and then set objectives and performance goals that will achieve those
2. Identify and consult key stakeholders
3. Create team-specific objectives across the organisation and then goals at the individual employee level
4. Track progress to monitor employee workflows and the effectiveness of metrics and execution.

Keep in mind: Effective performance management isn’t just about having team members that work well together. Leadership is something that needs to be evaluated as well.



The common ground between talent management and performance management is that both are built on organisational goals, with the intention of driving value for the business. Creating a plan for both requires a little organisational soul-searching but leads to higher productivity, efficiency and ROI in the long run.

For a more in-depth look at both performance management and talent management, have a read of the full article.