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I refer you to the following article on performance management (PM). It is stated that there are two sides to PM, the polices and the skills. PM policies include salary administration, where formal reviews are held annually or semi-annually and people are given ratings during reviews.
The skill side of PM includes building involvement and commitment to goals, coaching and supporting performance throughout the year, and giving honest and constructive feedback in a way that doesn't undercut work relationships" http://www.inter-ps.com/Overview/PerformanceManagement_Article.pdf
If you require further information please contact me a firstname.lastname@example.org