How does a performance management system differ from an annual appraisal?

An appraisal is a single moment: a manager rates an employee's work against a set of criteria. A performance management system is the continuous process that makes that moment meaningful — goals set at the start of the period, regular check-ins through it, coaching when things go off track, and development planning after. Companies that run only the appraisal get feedback too late to act on, and ratings distorted by whatever happened in the last month.