Moving from traditional paper-based performance reviews to web based performance appraisal system can feel like a stressful experience. It is mainly because you are moving away from something that you know about to something that is new to you.
It was not long before organizations used manual methods to track employee performance. But, it was quite tedious and time-consuming, as it required managers to track the performance of multiple employees and provide a status report to senior management. Over the years, organizations have adapted to an employee performance management system that have had the capability to track employee performance annually. These systems also helped in overcoming the challenges of conventional systems like manual processing, manager bias, and time required for performance management. But there were still a lot of flaws that led to employee disengagement, loss of productivity, and reliance on the personal judgment of managers.
The introduction of advanced and performance-driven employee performance management systems has overhauled the entire process. Organizations now rely on systems that help in measuring employee performance at regular intervals and can provide innovative solutions to complex human resource challenges. An HR performance management system takes into consideration multiple factors of organizational performance and provides actionable insights for improvements. The system is scalable, organized, and offers multiple benefits, such as increased employee engagement, reduced turnover, reduced employee dissatisfaction, strategizing organizational goals, increased revenue, and focusing on DEI initiatives.
Before we jump to the characteristics of employee performance management solutions, let us understand the problems that traditional management systems encounter.
Also Read: What is a performance management system?
Problems With the Traditional Performance Management System
The purpose of having a performance management system is to create a skilled and motivated workforce aligned with organizational goals. With the changing business dynamics, increased global competition, and green initiatives taken up by organizations, it has become imperative to have a diverse and inclusive workforce that is able to take up business challenges.
The different types of performance management systems are helping organizations overcome the challenges they faced with traditional systems. Let’s discuss the problems faced by organizations.
Traditional Performance Management is Time Consuming
A report by CEB talks about the time-consuming process of performance review conducted by organizations annually. It shows that a manager spends an average of 210 hours a year in the process, and an employee devotes 40 hours. Cumulatively, it accounts for thousands of work hours that get wasted in the inefficient process of performance review.
Ratings do not Reflect the Real Performance of Employees
The same report by CEB shows that 9 out of 10 employees are not satisfied with the performance review process. A majority of employees are dissatisfied with the ratings they get from their managers. Ratings are based on the most recent performance and don’t take into account the complete review of employee activities.
The Process is Laborious and Expensive
The countless number of hours spent in the performance review process adds to the lost revenue and administrative costs incurred in conducting the process. A report by Deloitte pointed out that their performance review process accounts for an investment of 1.8 million hours for the whole firm. Many small and medium-sized businesses are already overworked and need money for expansion and growth. Traditional performance management systems put extensive pressure on managing expenses and maintaining an efficient workforce.
The Process Cannot Accurately Measure Performance
Seeing the inaccuracy and insufficiency in measuring employee performance, many organizations are starting to look for better performance management measures. A report by Gartner highlights that 81% of HR leaders are making changes to their performance management systems. Many leading business enterprises, like Accenture, Deloitte, Microsoft, Gap, and Adobe, have switched to an entirely new people management process that saves time and leads to better business results.
Characteristics of Performance Management System
A progressive performance management system is one that helps in motivating the employees and offers improvement plans to those with learning gaps. Moreover, it focuses on maintaining a higher engagement level and enhancing the skills of employees through frequent check-ins, constructive feedback, and accurate performance measurement.
While selecting the best performance management system for the organization, it is important to understand the following characteristics of employee performance management solutions. These traits help in making a performance management process reliable, continuous, and data driven.
Also Read: 10 Best tools for employee goal setting
Fair and Accurate
A major issue with the traditional performance management system is the personal bias and perspectives of managers, which inhibits the fairness in the process. Fair and accurate performance review is done by involving multiple people in the review process of an employee.
A modern performance management system involves 360 degree feedback and reviews that incorporate feedback from multiple partners. Such a review process eliminates the personal bias and perspectives of managers and takes anonymous feedback from the concerned people.
The System Must be Efficient
An efficient performance appraisal system establishes and communicates goals and performance expectations to employees. It helps in reducing the manual efforts and overall time required to conduct the performance review process. Thereby providing accurate results for taking actions.
Continuous, Flexible, and Intuitive
As organizations have started embracing automation, they look for performance management systems that can simplify complex tasks and are flexible enough to accommodate changing business dynamics. Performance management systems are continually evolving with technology. They offer intelligent insights based on the input data and solve multiple technical problems that is difficult for human resource managers to comprehend.
Also Read: 5 Features too look for in an OKR software
The System Must Focus on Employee Development
The purpose of implementing performance management tools is to enhance the performance of employees. It is achieved by understanding their current skill-set, challenges, engagement level, and opportunities, and matching them with the organizational objectives.
An effective system focuses on imparting employee development plans for those employees that are lacking in optimum performance and rewarding those with exceptional performance. The system helps in gathering the employees’ information and creating a well-defined learning path for them. Even the measurement of employee development results and ROI is easier with an HR performance management system.
Aligned Towards Organizational Goals
The performance of employees is directly linked with the achievement of business goals. If the workforce is not aligned to the organizational objectives then it becomes difficult to accomplish organizational goals . A performance management system aids in aligning the employee goals with organizational strategy.
It can be achieved by setting goals that reflect the business strategy of the company. It requires taking every department and business unit into consideration while crafting the goals. Once the goals are designed, leaders have to cascade the goals down to every manager and employee in the organization. The last step is to review, monitor, and measure the success of these activities.
Also Read: Reasons why goals setting is important
Aligned With Organizational Culture and Values
A report by Deloitte on core beliefs and culture found that “94% of executives and 88% of employees believe a distinct workplace culture is important to business success.” Organizational culture and values constitute the vision, mission, business strategy, and day-to-day interactions of employees with leaders, managers, and peers.
Employees are able to build a strong relationship and a sense of bonding with the organization when they feel like they are a part of the culture. A performance management system drives engagement, productivity, and development by undertaking multiple initiatives. It helps in building a closer relationship between an employer and their employees. It helps in creating a sense of purpose, achievement, and involvement among employees within the organization.
The System Must Help With Goal Setting and Tracking
A performance management system helps in setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals. Research shows that setting goals in collaboration with employees increases accountability and also align individual goals with organizational goals. The check-in feature of the performance management system also helps in tracking the overall performance of team members. Thereby enhancing transparency in the review process.
Also Read: Benefits of 360 degree feedback
Integrates All Aspects of Employee Development
Employee development is a cumbersome process. It involves various parameters, like skill development, job rotation, job enrichment, mentoring and coaching, and lateral moves. As organizations grow in size, employee development gets more challenging. Thus, it requires a thorough analysis of the workforce and creating a plan for every employee.
Using employee performance management solutions can simplify the tasks of employee analysis, learning path creation, execution, monitoring, review, and success measurement. Managers can use the performance review tools to quickly identify employee development opportunities and quickly start the process.
Customization, Security, and Integration
Integration with other HR technologies and tools is a key feature of performance review software. Because today’s businesses utilize various technologies and tools for employee management, it is important for software to seamlessly integrate and interact with other platforms to provide a better employee experience.
Specific business demand are met by tailoring and customizing performance management software. It also ensures data security to meet global business standards.
Also Read: Common leadership challenges at workplace
Supports Learning Culture in Organization
Creating a learning environment contributes towards the growth of an organization. It helps in increasing employee productivity, engagement, ownership, and interpersonal relationships. Developing a learning culture is a long process. It requires collaboration from all the stakeholders of an organization.
Organizations can shift toward a continuous learning process by adopting an intuitive performance management system. The focus should be on the following aspects:
- Providing every employee with the opportunity to actively participate in their learning process
- Rewarding and promoting continuous learning
- Providing resources and tools for employee learning and development
- Encourage social learning within your organization.
- Providing coaching and mentoring sessions to employees
- Measuring the success of learning activities and reviewing the culture at intervals
By taking into account the above-discussed characteristics, organizations can select the most effective performance management system based on their business needs and dynamics. We hope this article has answered your queries regarding the traits of performance management systems.
Explore the complete range of features of performance management systems, schedule a demo with Engagedly.
We are all aware today that we can’t gauge, monitor, and measure work efficiently with the present performance management systems. Measuring employee performance is one of the crucial objectives for every organization and it directly affects their successes. As a result, on the global front, organizations are doing away with the traditional way of managing performance and are adopting the modern approach by using social performance management through credible performance management software. It is not only comprehensive but also consistent and balanced when compared to the traditional annual or half-yearly reviews.
Also Read: How Performance Management Changed in 2021
An effective performance management software can help you increase employee engagement, boost motivation, and facilitate two-way communication. Not only this, it helps in better management of employees and also increases the efficiency and accuracy of employee performance reviews.
While there are multiple reasons why you should invest in a good performance management software, we have some important ones listed out for you here:
You know how important feedback is to driving employee engagement and retention. But for it to be effective, it needs to be shared often and on the spot, be it positive or constructive. Performance management software makes sharing and receiving feedback a lot easier for both employees and managers. It allows for consistent and ongoing sharing of feedback on a real-time basis. Instead of waiting for the performance reviews, managers get to share feedback with their employees anytime and from anywhere. Similarly, it gives employees the flexibility to ask for feedback whenever required. Timely feedback helps good employees become better, and the ones who are not up to the mark, get a chance to improve.
As rightly iterated by Ken Blanchard (American Author) that, ‘Feedback is the breakfast of champions.’
Hence, performance management software not only facilitates two-way dialogue but also improves collaboration, which in turn improves employee engagement and retention.
Also Read: How Important Is Feedback In Today’s World?
Rewards and Recognition
Acknowledgement and recognition goes a long way for employees. Just like feedback, employees feel the constant need to be recognized for their work. Receiving timely acknowledgement boosts employee’s confidence, and they get validation for their work. A good way to keep your employees motivated and engaged continuously is to celebrate their wins with them.
Most of the performance management software in the market have a built-in employee recognition and rewards module, which allows you to recognize and reward your employees instantly for their work. For example, using tools like Engagedly, you can publicly praise or award points to your employees.
Goals and OKRs
Without some goals to achieve, where would we all be? Goal management is an integral process of all organizations. It helps employees to remain focussed on a common goal and in measuring the overall progress of the organization.
A performance management software enables employees and the organization to set clear, SMART, and dynamic goals for themselves. In addition to this, it allows you to cascade your goals and also align them with the organization’s goals. This helps every individual work towards some common goals and have the bigger picture in mind.
Millennial employees care for feedback a lot more than their predecessors. They not only look for feedback from their managers but peers as well.
The multi-rater feedback has already picked up pace in terms of popularity and is a common module of most performance management software. In this process, employees receive feedback from multiple audiences, which includes managers, peers, subordinates, vendors, and customers. Employees get an overall and balanced perspective of their performance. Moreover, it bridges the gap between what an employee perceives and what others think about the employee. It also allows employees to share feedback about their managers anonymously without the fear of getting subjugated.
We can say that multi-rater feedback not only helps in the self-awareness of the employees but also promotes an open culture in the organization.
Reduced bias and Transparency
Today many organizations are choosing to inculcate the transparency factor. And in the core of it all, is a good and efficient performance management tool.
Performance management software offers a great deal of visibility to everyone in the organization. Every stakeholder has a clear view of the progress of goals, feedback, and ongoing projects. Moreover, as performance management software logs in data consistently, it reduces the chance of any biases or favoritism towards an employee. This leads to creating a sense of trust and open culture in the organization.
Reporting and Analytics
In today’s data-driven world where everything is predicted and explained in numbers and stats, where would we be without analytics?
Performance management software provides detailed insights about an employee’s performance in the form of graphs and charts. It helps employees to make decisions about their skills and developmental needs. Additionally, it helps managers and organizations to make compensation and promotion-related decisions during the time of annual or half-yearly performance reviews. Not only this, it also saves the employer’s time during the time of reviews as all the information regarding employee’s performance is already there in the performance management tool.
Given all the above benefits that you can draw with efficient performance management software, would you want to wait any longer? We guess not!
Are you planning to invest in performance management software? Then request for a live demo.
There are many different kinds of performance management software out there in the market. But choosing the right kind of performance review software takes a lot of effort since there are quite a few things to consider before selecting software and we are faced with a sea of choices.
Employee performance evaluation is one of the most important aspects of the workplace. Many organizations have discarded their traditional paper-based performance reviews for a digital solution; employee performance review software and they are right in doing so!
A performance review software can help you keep track of employee performance more accurately. You can clearly communicate your performance expectations with your employees and stay connected with everyone.
Also Read: Employee Engagement Tips To Avoid Burnout
There’s a wide range of performance review software available online for you to choose from. Depending on your organization’s requirements, you can select the software that best suits you. But don’t forget to go through this list of must-haves for performance review software before you choose one!
Customizable Review Templates
Performance review templates make the performance evaluation process more organized and help you follow a specific standard for evaluating each team. There is performance review software that has sample review templates for different departments in an organization. The problem here is that these sample templates are not usually customizable.
Having a customizable review template allows you to change the contents of the review template based on changing work practices and industry trends. So, customizable review templates in performance review software are a must-have!
Ease Of Use
In every article so far, we have mentioned that software should be easy to use and understand; we stand by that maxim in this article too. The performance review process should be easy to understand and implement in an organization.
There are many performance review software out there, which have many features but are very confusing. Software should follow a process to execute a specific action. A performance review software should have a concrete procedure to carry out performance evaluation, without affecting other activities in an organization. It should be simple and understandable and shouldn’t take employees hours just to get familiar with the software. So a simple user interface and a clear procedure are must-haves!
Continuity Of Performance Evaluation
Performance evaluation is not a ‘one-time in a year’ activity. It is important to continue it at regular intervals throughout the year. Choose a performance review software that supports performance evaluation anytime throughout the year.
This helps you keep track of employee performance efficiently and perceive their personal development.
Performance Review Competencies
When you evaluate the performance of an employee, it is important to list out the performance review competencies.
Competency: Analytical Thinking
- Approaches a situation or problem by defining the problem or issue; determining its significance; collecting data; using tools such as flow charts, Pareto charts, fish diagrams, etc. to disclose meaningful patterns in the data; making inferences about the meaning of the data; and using logic and intuition to arrive at conclusions or decisions.
- Approaches a complex task or problem by breaking it down into its component parts and considering each part in detail.
- Carefully weighs the priority of things to be done.
In some software, there are competencies that are already listed for you to choose from and some software allow you to create performance review competencies yourself. Having an option to choose/ create competencies gives you an opportunity to add more to a performance review.
Associated With Goals And Objectives
When evaluating the performance of an employee, you need all the details of their performance over a particular period of time to keep the review accurate. Not many software give this option but associating individual/organizational goals and objectives with their performance review can help improve the quality of the review.
Choose a performance review software that allows you to associate employee goals and their progress with the review for reference.
Sometimes it is very important to assess yourself accurately. Self-evaluation gives you a chance to improve yourself and contribute to organizational productivity. You cannot do it without having a proper system to measure your performance.
A performance review software must allow you to assess yourself accurately by allowing you to create your individual goals, check in to them, and use these as references to measure your own performance.
If you want to know how Engagedly can help you with performance reviews, request for a demo!
If you’ve been keeping your ear to the ground with respect to HR Tech news, you’ll know that there’s a slow revolution taking place.
Performance review, whether you love it or hate it, is there to stay. Most employees deny the validity of them because they presume that the process act as an excuse for managers to put their salary increments on hold.
How can a performance review ever help an organization if its employees do not believe in them?
Do you want to change the mindset of your employees and restore their faith? Well, here is a list of the dumbest possible mistakes you should avoid.
1. Not Informing employees in advance about the ‘Big Day
This is one of the dumbest mistakes a manager could make. A performance review meeting requires prior preparation both by the manager and the employee. You cannot go to your office one day and announce a surprise performance review meeting. So, inform your employees in advance about the ‘Judgement Day. So that it can help both the employees and the organization.
2. Focusing only on negatives in a Performance Review
Never assume that employees don’t need to hear about the things that they do well. Don’t always focus on their negatives. Give them meaningful feedback where you appreciate them for their good work and point out their mistakes, giving them a chance to correct them.
3. Talking too much
You should encourage your employees to speak up about their performance, instead of being a boss who talks too much and doesn’t allow the employee to provide his perspective. If you don’t allow the employees to provide self-evaluation and go on with your assumptions about their performance, the very purpose of performance reviews will be lost.
4. Absence of goals and plans
It is not only about reviewing the past performance of employees. It is more about setting goals for the future and helping employees improve themselves based on the past reviews. Having no goals or follow-up plans after a performance review is as useless as not having a performance review at all.
Do you want to know how Engagedly can help you with performance reviews? Request a demo to know more.