PM is Organization-Centric. TM is Human Capital-Centric.
Talent Management (TM) focuses more on the people element of the organization; where Performance Management (PM) is more about the overall alignment of various organizational functions towards shared vision, mission, and objectives.
PM supports the organization, TM supports the culture. They work hand-in-hand. The performance management system takes a top down synergistic approach from the definition of vision, mission, corporate objectives, policies, procedure, critical success factors, KPIs...etc. In order for people to achieve these, the organization needs to provide appropriate training to its talent (people) and build high-performance business culture. TM cannot work in a silo, it has to be well aligned with the overall strategic performance management system of the organization and supporting the PM. Performance Management (PM) and Talent Management (TM) are connected. PM has KPIs that help drive behavioral elements. TM has KPIs that help drive cultural elements. When organizations well align the behavior and cultural elements, you have a winning combo. The combination of PM and TM elements makes a business successful. PM and TM is one system and software with the set of different modules that track to measure the employee's performance as well as help shape business culture and make the engaged workforce.
PM is a perspective to the organization, TM is the perspective of talent: It's true that the organization pays the dollars, but the talent is the most valuable asset in the organization, perhaps the weakest link in execution. It is a successful culture that makes for a successful organization too. How do you manage or engage associates in your organizations, how do you communicate organizational objects or goals. Both PM and TM are important in any organization if functions and objects are aligned properly. PM is about building sustainability in the organization; and TM is about building talent competency of the business -finding, renewing and protecting the right of talent. Unless the right talent is there, Performance Management cannot salvage sustainability.
PM helps businesses define the needs of the organization, and TM helps fulfill them by training: Coaching and mentoring the employee to perform well, which does impact the culture overall. There are numerous business intelligence solutions which are integrated with customized modules that help organizations effectively to perform at their best. Performance Management System can significantly impact to organizations and it works for each manager, leader, and employee.
Although PM and TM are different management practices, they are interconnected. In any mature organization, both functions are interdependent and work for overall organizational objects and achieve long-term business visions and strategy.