8 Key Features to Look For in a Performance Management Tool

by Srikant Chellappa Jun 5,2020

The People Strategy Leaders Podcast

with Srikant Chellappa, CEO

Performance management can be a comprehensive and time-consuming process. Hence, every organization has a performance management process or tool in place to get the best out of their employees. Efficient performance management of employees helps organizations become successful, while it helps employees grow personally, and professionally.

Considering the importance of performance management, it becomes a daunting task to select the correct tool for your organization. An ideal tool would be one that comprises all aspects of performance management, simple to use, easy to understand, and worth investing. In this article, we will discuss the features or aspects of performance management to look out for, before investing in a performance management tool.


Goal Setting is one of the most important features of any performance management tool. So what makes goals important? It helps increase employee productivity, motivates them, improves decision making and time management skills, and promotes teamwork. 

An effective goals module would be one where employees can set, track, and manage SMART goals. It should allow employees goals to be aligned with organizational and business goals. Employees should be able to cascade their goals and also should be able to add objectives and key results to their goals.

Also Read: 7 Tips To Make Your Goal Setting Effective

Multirater Feedback

Multirater or 360 degree feedback has become an integral part of all performance management tools. Because of its unbiased nature, it has become popular with organizations worldwide. In a 360 degree review process, feedback is collected from everyone with whom the employee had a working relationship. The reviewers include managers, direct reports, peers, senior leadership, customers, vendors, etc. It helps to identify the training and development needs of the employee, improves self-awareness, enhances employee engagement, productivity, and retention.

Rewards and Recognition

Why should rewards and recognition be a part of your performance management tool? Rewards and recognition motivate employees to work and drive employee engagement and satisfaction. Thus, it helps in increasing the overall productivity of the employee as well as the organization. A simple system where employees are awarded points and badges for the work done would do the trick.

Everyone likes being appreciated and praised for their work. It always has a huge positive impact on the employee and boosts employee morale and confidence.  

Engagedly’s public praise option allows employees to praise each other. It also allows managers and other leaders to award points to their employees for accomplishments. The praises and rewards are visible to everyone in the organization. 

Also Read: 8 Simple Strategies For Employee Recognition and Rewards At Workplace

Continuous Feedback

Having a continuous feedback module in your performance management tool ensures that there is easy two-way communication between managers and employees. A feedback module will help employees get performance-related feedback anywhere, anytime. It helps in team-building, improves productivity, and thereby drives engagement. Instant feedback is also known to motivate employees.

A basic feedback module should support the functionality to request, share, and track updates regarding the feedback. 


Learning is an essential component of any performance management tool. This module aims at employee development, improvement of employee skills, and helps in building the career trajectory of an employee. Having a learning module in your performance management tool helps the employee to know that organization cares for their development.

A typical learning module should enable employees to take up courses required to polish their skills. It should facilitate managers and HR to create and assign learning modules to their employees.

Also Read: 10 Best Employee Feedback Tools To Track Performance 


Surveys are an excellent way to gauge the current temperament of the organization. A simple survey can help us with information such as what employees are thinking, what they want to do, and how they feel. It also helps HR and managers to measure employee engagement of the organization and the team. The surveys also help employees to voice their opinions and concerns about the organization.

Any simple survey module of a performance management tool should allow easy creation of surveys and should also have common survey templates.


Currently, there are multiple HR technologies in the market, so it has become essential for performance management tools to work seamlessly with each other. A quintessential performance management tool solution should integrate with other tools easily and share relevant information. 

Engagedly currently integrates with ADP Marketplace, BambooHR, Google SSO, Namely, and Okta to share and access relevant information.

Also Read: It’s About Performance Management, Not Just Review

Report and Analytics

An ideal performance management tool should provide managers and organizations with actionable reports and analytics about employees. It should provide an insight into the overall performance of an employee. A performance management tool should be able to provide real-time information about the performance, skills, and development needs of the employee. It can be in the form of simple charts and graphs, which can be easily understood. These reports should guide the management to take appropriate actions to improve the performance of low performing employees.

If  you are looking for a performance management tool with all these features, then request for a demo with us.

Looking To Invest In A Performance Management Tool? Request us for a live demo.

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Srikant Chellappa
CEO & Co-Founder of Engagedly

Srikant Chellappa is the Co-Founder and CEO at Engagedly and is a passionate entrepreneur and people leader. He is an author, producer/director of 6 feature films, a music album with his band Manchester Underground, and is the host of The People Strategy Leaders Podcast. He is currently working on his next book, Ikigai at the Workplace, which is slated for release in the fall of 2024.

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