Have You Invested In the Correct Performance Management Tool?

by Srikant Chellappa Jun 30,2020

The People Strategy Leaders Podcast

with Srikant Chellappa, CEO

Employee Performance Management has always been one of the most important processes in organizations. Managers and organizations are continuously evaluating employee performance in an attempt to improve the overall productivity of the organization. Effective Performance Management helps in aligning individual employee goals with team and organizational goals. A performance management system should essentially include aspects such as performance review, goal-setting, employee feedback, rewards, and recognition.

Why a Performance Management Tool?

Initially, organizations were smaller in size and had fewer employees, so they carried out paper-based performance management. But with time, the number of employees increased, and it became difficult to manage paper-based performance management. As technology evolved, they switched to digital performance management tools to manage employee performance. Tool based performance management not only made the process more manageable and frequent but also made the data secure and reduced the chance of biases.

Multiple organizations have now moved away from the traditional process to a modern performance management tool. The facts from various surveys highlight the importance of moving to an online or a digital performance management tool.

  1. As per Deloitte’s Global HR Trends report, nearly 70% of organizations have started to reinvent their performance management process.
  2. Employees who are highly engaged and inspired are proved to be 125% more productive than those who are merely satisfied.
  3. According to a study by Gallup, organizations that provide continuous feedback have a 14.9% lower turnover than other organizations that offer annual or no feedback.

As an HR or Manager, to get the best return on investment from your performance management tool, look for the following modules in it.

Goal Setting

Goal Setting is one of the primary features which you should look out for in any performance management tool. It is considered vital since it is the yardstick against which your employees will be evaluated. Employee goals should be extensively based on the job description, project, and behavioral goals. Employees should be able to cascade their goals and be able to add objectives and key results to it.

Apart from this, employees should be able to set SMART goals:

  • Specific: Clear and Understandable.
  • Measurable:  Verifiable and results-oriented.
  • Attainable: Attainable but sufficiently challenging.
  • Relevant: to the mission of the department or organization.
  • Time-bound: with a schedule and specific milestones.

An example of such a goal would be to increase employee engagement (Specific and Relevant) by 10% (Measurable and Attainable) in the first quarter(time-bound). This is an ideal example of a SMART goal.

Also Read: Everything Depends On The Right Kind Of Goal Setting. Here’s Why

Multirater Feedback

Often a one-to-one review becomes subjective as managers and supervisors tend to review their employees from a single, result-oriented perspective. Whereas a 360 degree feedback takes into account not only whether the goals are met but how they are achieved. The feedback is collected from everyone that the employee had a working relationship with. The reviewers include managers, direct reports, peers, senior leadership, customers, vendors, etc. It helps identify the training and development needs of the employee, improves self-awareness, enhances employee engagement, productivity, and retention.

Also Read: A 7 Step Guide To A Successful 360 Degree Feedback Process

Rewards and Recognition

An option to reward and publicly recognize your employees is a must-have in your performance management tool. It is reported to have one of the biggest impacts on motivating your employees, and to retain them for a longer time in your organization. It not only motivates everyone to work harder, but also drives employee engagement and boosts morale. Just having a simple system where employees can be awarded badges and points for their work would help a lot in encouraging employees.

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. 


A good performance management tool should support continuous feedback. A feedback module facilitates an easy two-way conversation between managers and employees. Feedback not only motivates and builds the morale of an employee, but  also helps in increasing productivity, driving engagement, and creating / building a successful team that is open to continuous / frequent feedback from each other.

Functionality to request, share, and track updates regarding the feedback should be part of a basic feedback module. 

Also Read: Wondering How To Give Constructive Feedback? Here’s How

Learning & Development

Learning is continuous for everyone and a never-ending cycle. A learning module in a performance management tool is aimed at building the career trajectory of an employee. It helps in overall employee development and improvement of skills. Having a learning module as part of the performance management tool, lets the employee know that the organization cares for their career and skill development.

In a learning module, employees should be able to take up courses, and HRs and managers should also be able to assign them courses as and when required.


With an abundance of HR technologies in the market, it has become important for any performance management tool to work harmoniously with other HR technologies. An ideal performance management tool should integrate with HR technologies 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: Employee Engagement Software Can Enhance Work Culture

Report and Analytics

The performance management tool which you select for your organization should be able to provide actionable reports and analytics for your employees. Reports should be able to monitor the progress of an employee and also highlight information about the performance and skill development needs of the employee. Managers and HRs should be able to analyze performance and chalk out an action plan for their employees from the reports.

Are you looking for a performance management tool with all these features? Then request for a demo with us.

Request A Demo

Engagedly is offering a suite of products part of its Remote Work Toolkit free to any organisation, until Sept 30th, 2020. 

The Coronavirus has affected the way we work today and for months to come. Unprecedented events require unprecedented measures. We at Engagedly believe it is our responsibility as socially conscious corporate citizens to help equip organisations with additional tools and resources during this time of crisis.

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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