What Is A Performance Management System?

What is a Performance Management System?

A robust performance management system diligently monitors and records employees’ job performance through the integration of advanced technologies and methodologies. This system guarantees a consistent and accurate assessment, aligning employees with the strategic objectives of the business. By leveraging a combination of cutting-edge tools and strategic approaches, the performance management system facilitates employees in making valuable contributions toward the overall success of the organization.

Performance management comprises various vital HR functions like continuous progress review, real-time feedback, frequent communication, training employees to improve performance, recognizing good work, rewarding improved performance, goal-setting, etc.

A performance management system, a.k.a. HR performance management system, helps HR managers establish clear performance expectations through which employees can easily understand what is expected of their job. It enables managers to instill in their employees the importance of individual accountability for meeting goals and evaluating their own performance.

Also read: Importance of employee performance management system

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Performance Management System for the Modern Workplace

The changing technical landscape, irregularities in the global supply chain, the great resignation, and the sudden shift to a hybrid workplace setup are putting forth innumerable challenges to businesses. To remain competitive in the current global market, it is necessary to have a continuous performance management system. Such a system will help in realigning resources towards organizational objectives and also provide warning signs to highlight problems in workforce performance and practices.

Businesses need a flexible, smart, and technically advanced performance management system that forms the foundation of conversations, changes, and progress. That’s why companies such as Google, Microsoft, Netflix, Adobe, Uber, and many others have transformed their performance management systems. They no longer work on an annual performance grading system but on a continuous system that can help employees stay productive and make them accountable for their transformational growth.

Furthermore, more than productivity and efficiency, consumers are now valuing innovation, creativity, and problem-solving. To live up to these expectations, organizations need to continuously improvise their performance management strategies.

Organizations must rethink and redefine their performance management practices as new-age workplaces replace traditional work setups.

Performance Management Cycle Stages

There are 4 stages in a performance management cycle.

  1. The planning phase is where leaders and managers create SMART goals for their teams
  2. Monitoring through check-ins and feedback to track the progress made on goals
  3. Reviewing the overall performance of teams to contemplate what worked favorably and what didn’t
  4. Rating and rewarding involves rating employees based on their performance and rewarding them suitably to motivate them.

Performance Management System Components

An employee performance management system includes multiple components that are essential to creating an engaging and productive work environment. They build on the foundation of performance management by providing a platform to manage, track, and assess employees’ performance. Let us understand the different components of the performance management platform and how they help in employee growth and development.

1. Objectives And Goal Setting

Planning is a crucial component of performance management. Setting challenging goals motivates employees to improve their performance rather than having no goals at all. Goals aren’t just meant to be set for individual employees; they work better if you have departmental goals and align them with your organizational goals. A performance management system that doesn’t allow you to set goals or plan doesn’t contribute to improving organizational productivity.

Performance goals should be set in collaboration, both by the manager and their direct reports. Discussing and setting goals together helps managers and their employees gain a better understanding of their current performance and their future performance abilities.

Also Read: Guide To Setting Employee Goals Through Engagedly

2. Ongoing Communication

The next component of the performance management system is communication. Having an effective performance management system in your organization helps you create a culture of ongoing communication about your team’s goals, training, etc. Having an internal communication tool can simply do all this.

It is always good to follow up on what your direct reports are working on and how they are managing to meet their goals. This keeps them motivated. As a manager, you can help them improve by giving them suggestions about their work without having to wait for the next performance review.

Also Read: Download the ultimate guide to employee engagement survey and templates

3. Performance Review

This is the part where managers give their reviews of the performance of their direct reports. These reviews are generally annual or quarterly. The general review procedure is a self-evaluation done by employees, followed by a thorough review by a manager.

An important aspect of performance reviews that has changed recently is peer evaluation: 360-degree feedback. 360 feedback and peer evaluations allow employees to evaluate their managers and help them understand where they can improve themselves and how. The process of rating one’s manager can be complicated, but once it becomes a practice, the overall team productivity increases.

4. Recognizing Good Performance

Recognizing good performance is as important as identifying bad performance. When employees do not meet business expectations, it is important for them to understand where they are lacking. This helps them do it better the next time.

In the same way, when employees accomplish something or go out of their way to accomplish a goal, as a manager, you should recognize their effort. Most performance management systems come with employee reward programs that allow managers to reward their employees or publicly praise them for their contributions. This may seem small, but it is one of the most crucial components of a high-performance culture.

5. Feedback & Suggestions

A performance review does not end with either “good work” or “needs improvement.” Giving proper feedback and suggestions to improve performance is the next important component of a performance management system.

This component allows you to tell your employees exactly where they need to improve and how to make it possible. Studies state that employees who receive frequent feedback on their performance are more likely to contribute to organizational success. Therefore, it is a good practice to have a feedback process in place to help improve organizational performance.

Also Read: How Important Is Feedback In Today’s World?

6. Learning & Development

Learning and development are critically important for the success of any organization. Inculcating a learning culture can motivate employees to reskill and upskill themselves and be a part of a dynamic, skilled, and knowledgeable workforce. Additionally, it helps in retaining employees and creating a brand image.

Integrating a performance management system with multiple individual platforms enhances active learning within the organization. Through interactive features like course design and assignment, managers can assign courses and modules to employees. Furthermore, it can also be used to conduct check-ins to understand the progress made by employees. Either way, L&D should be a continuous process, and managers should encourage employees to learn more and develop their performance potential.

Performance Management Tool

Frequently Asked Questions

Q1. What is a performance management system and how is it important?

Ans. Performance management is a system of processes and tools that helps leaders track and analyze the performance of their employees and mentor or coach them to help them work at their highest potential.

Q2. What are the stages of a performance management cycle?

Ans. The different stages of a performance management cycle are as follows:

  • Planning
  • Monitoring
  • Reviewing
  • Rating

Q3. How does a performance management system help?

Ans. It helps by providing real-time analysis of employees’ performance and helps leaders understand the learning needs of employees. It helps in the achievement of organizational goals by aligning employee activities to the company’s objectives.

Q4. What is the role of the performance management system?

Ans. The role of the system is to align employees’ activities to achieve optimal performance and fulfill the organization’s goals. This is done through constant tracking, analyzing performance, and providing coaching to employees based on the requirements and observations.

Q5. What is PMS in HR?

Ans. PMS in HR is a systematic and objective method for consistently measuring employee performance. This approach empowers companies to monitor progress towards strategic goals, ensuring effective collaboration among employees and departments to achieve desired outcomes.


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Evolution Of Performance Management System

Organizations these days have become more employee-focused and less process-driven. Performance management has changed in many ways over the past few decades. Many organizations have ditched their annual performance reviews. This has been the era where continuous feedback became popular as one of the most effective ways of managing performance.

What led to the evolution of performance management? There are many early references to performance appraisals in America that date back over a century. Here’s a timeline of how performance management has evolved over the last century.

Continue reading “Evolution Of Performance Management System”

Top 10 Performance Management Software In 2024

The Global Human Capital Trends report by Deloitte highlighted that 49% of executives found their Performance Management Process to be ineffective and required a complete overhaul.”  The statistics highlight the importance of using the right performance management software to derive effective results. In the last two years, organizations have remodeled their business processes to contain the impact of the pandemic and thereby boost the productivity of their employees working remotely and from the office.

However, regarding performance management, the achievement is not significant. A survey conducted by Kronos found that 95% of HR leaders feel that employee burnout is sabotaging their workforce retention. The problem calls for robust performance evaluation software that uses crucial parameters in managing and monitoring the workforce. 

This article will help you understand the intricacies of performance management systems and will explore the various features of top 10 performance management software. We will unpack the following in the below sections:

What is a Performance Management Software?

Performance management is a tool used by organizations globally to increase employee productivity and help them become successful in their job roles. The process encompasses continuous communication between a manager and employees for the mutual achievement of organizational goals. 

Changing business needs and the latest technological developments have given rise to new-age performance management software that helps in holistic workforce management. The traditional practice of annual performance review is now transitioning into continuous process management. The latest developments in performance management involve setting clear objectives and goals, task assignments, frequent check-ins, providing feedback at regular intervals, and analyzing the results. Through this, managers and leaders can track the performance of their employees and provide them feedback in real time to help them perform better at their jobs. 

Performance management helps organizations in utilizing the complete potential of their employees and provides effective measures to increase employee engagement, collaboration, and retention. Through the analytics feature offered by the tools, executives can look into the intricacies of performance management and create an actionable plan for performance improvement. 

Importance of Performance Management Software

The primary aim of business performance management is to align leaders, managers, team members, and resources to meet the strategic goals of the business. By providing metrics to measure the performance and productivity of the system, leaders can gauge the early signs of a potential threat and create way-outs to get business on track. 

Continuous Performance Management (also known as Agile Performance Management) helps in creating a productive and skilled workforce by analyzing the performance gaps and offering solutions to increase productivity through training and mentoring. Performance management tool is becoming increasingly important for organizations to be successful in the current business environment. By adopting performance management measures, leaders can understand the factors that are working well for the business and seek better results through proper implementation. 

Employee performance management software can be highly beneficial to organizations. The following points highlight its importance in the workplace.

Also Read: How continuous performance management can help improve productivity?

Boost Employee Engagement and Productivity

(Globally, 85% of employees are disengaged or not actively engaged at work, resulting in massive loss of business and revenue- A report by Gallup). Employee engagement and productivity are directly linked to the success of an organization. Engaged employees are involved actively in their work and can create strong bonds with their colleagues. By utilizing continuous performance management, organizations can create an environment of trust, support, and encouragement. Strategic implementation of a performance management solution helps in aligning the individual goals with the organizational goals.

Employee Reskilling and Upskilling

A LinkedIn 2021 workplace learning report shows that 94% of employees would have stayed longer at their last organization, had the company invested in their learning and development. The report also highlighted that the interest and zeal to learn is highest among the younger workers belonging to Gen Z. 

Providing mentoring and coaching to employees not only helps them perform better at their jobs but also motivates them to take up more responsibilities. By reskilling and upskilling employees, organizations can attract new talent and train existing employees to take up managerial positions. Employee development is at the heart of business performance management solutions, and organizations can reap numerous benefits by using them effectively.

Also Read: How to build a successful upskilling and reskilling program?

Improves Workplace Communication and Collaboration

A report by McKinsey highlights the importance of communication in the workplace. It states that improved communication can increase the productivity of interacting employees by 20-25%. Another report by CMSWIRE states that 85% of employees use more than one device for communication. The statistics outline the importance of clear and efficient workplace communication. The major difference between a performing and a non-performing team is efficient communication. By improving communication in the workplace, organizations can improve employee efficiency and mitigate critical risks that lead to the failure of the organization.

Features of Top Performance Management Software

While selecting the best performance management software for the organization, it is imperative to look for some desirable features in the tool. The crux of implementing a system is to ensure performance improvisation throughout the organization and automate several manual tasks to avoid critical human errors. 

Looking for the right performance management tool can be a lengthy process if the desired objectives and goals of the performance management system are not clearly defined. Conducting surveys and interviews within the firm can shed some light on the objectives. Once the objectives are enumerated, HR managers should relate them to the below features and zero in on the tool that will meet organizational requirements. Check out the below features while selecting the best performance management platform.

Continuous Feedback Mechanism

The mechanism calls for a continuous, open, and cyclical feedback exchange between the manager and employees. It helps in finding the performance gaps of an employee and starting an improvisation plan. Through this process, managers can ensure project deliveries are not hampered and employees are getting continuous feedback on their work.

360 Degree Feedback

Also known as multi-rater feedback, it involves taking anonymous employee feedback from the colleagues he/she has a working relationship with. Managers, peers, direct reports, and subordinates all submit their feedback through a specialized mechanism. 360-degree feedback provides insight into the behavior, attitude, and work relationships of employees. The unbiased nature and subjectivity of 360-degree feedback make it more acceptable to employees.

Also Read: How to effectively review employee performance?

Automated and Intuitive

A performance management solution should be user-friendly and easy to understand. The system should help in automating tasks that require regular check-ins and error-free delivery. By sending automated reminders, it can help reduce the turnaround time and delays in submissions. Business performance management software offers customizable surveys and dashboards that aid in the easy collection and visualization of employee feedback.

People Analytics

Also referred to as talent analytics or HR analytics, it is a data-driven method to study people, processes, challenges, and opportunities in the workplace. The talent insights collected through the rigorous process aid in making smarter decisions, succession planning, and improving the capabilities of the workforce. Many organizations are heavily focused on people analytics to make HR business strategy decisions like recruitment and selection, learning and development, project management, and KPI creation and setting.

Also Read: Why companies should invest in people analytics?

Social Performance Management

Social connection and engagement go a long way in today’s virtual business environment. In the last 2 years of the pandemic, employees working remotely have faced a lot of disconnect from their teams and organization, leading to proximity bias and reduced productivity. Social performance management, or SPM, is a part of the software that provides a solution to stay connected within the organization by letting employees share ideas, opinions, and thoughts with everyone in the organization. Employees can ask for real-time feedback from their colleagues or managers. 

Employee Reward and Recognition

(As per a survey conducted by Achievers, more than half of 1,700 respondents are actively looking out for new jobs, citing lack of recognition in the workplace). Employee reward and recognition is one key parameter that organizations need to look for in retaining potential employees. A well-implemented reward system helps in boosting employee productivity and makes them feel valued in the workplace. Through gamification, performance management software encourages employees to reward each other for their contributions and outstanding performance.

Also Read: How to set OKRs for success?

Setting SMART Goals

A report published by Gallup highlights that over 50% of employees are not clear about what is expected from them at the workplace. Introduced in 1981 by George T Doran, SMART refers to Specific, Measurable, Achievable, Relevant, and Time-bound goals that help organizations in measuring employee performance through a defined metric.

Goal setting is one of the most critical and time-consuming processes in an organization. Yet, it has many advantages, such as providing clear expectations to the employees, reduced turnaround time, and higher productivity & engagement. It helps in quantifying the performance of employees and offers insights to managers for plugging in performance gaps. A performance management solution aids in setting SMART goals that help in measuring employee performance in real-time.

Learning Management System

Learning is at the core of a performance management tool. It helps in assessing the current skills of an employee and charts out a defined path to develop and grow in the organization. Employees can use the module for self-assessment and set goals for themselves to hone their skills. Managers can assign certain learning modules to their employees to help them learn new skills.

Most of the employees are concerned about their skill development and career progression, so having a learning module in the system makes them feel cared for. 

Also Read: Top 5 reasons to have a learning management system at workplace

Customization, Security, and Integration

An important aspect of performance review software is its integration with other HR technologies and tools. As organizations these days use multiple tools for employee management, it is a fundamental requirement for software to seamlessly integrate with these tools for a better employee experience.

The various modules available in the system can also be customized as per the business needs and provide data security as per the business standards.

Talent Management Software

Top 10 Performance Management Systems in 2023

Successful implementation of software can cause a ripple effect in the organization. It helps in aligning the workforce towards the business goals and makes employee engagement and collaboration easier. As many organizations are paving their way to digitizing and modernizing their performance systems, the below list of employee performance management software will be helpful to them in selecting the right tool that matches their organizational needs and objectives. 

Engagedly

Engagedly is a people enablement platform that offers a range of features for workforce management. It is a scalable platform that is available to organizations of all sizes. The automated tool works on the E3 module- engage, enable, and execute, to help HR managers create a continuous feedback mechanism to enhance employee engagement, collaboration, and productivity. The platform is user-friendly and meets the needs of the modern organization by allowing managers to assign goals and tasks to their team members and provide feedback through frequent check-ins. It is loaded with multiple features to find performance gaps and offers a learning path to the employees to nurture and train them for higher responsibilities. 

Solutions offered by Engagedly:

  • Performance reviews and competency assessments
  • OKR alignment and tracking
  • Ongoing check-ins and project reviews
  • Leadership assessment and succession planning
  • New employee onboarding
  • Drive cultural alignment
  • Measure and improve employee engagement
  • Training and development of employees
  • OKR consulting and certification

Performance Management Tool

15Five

15Five is a tech-powered platform that offers employee engagement, continuous performance management, and manager effectiveness. The solution combines software, education, and community to build effective managers and improve employee performance.

Solutions offered by 15Five:

  • Increasing Engagement
  • Improving Manager Effectiveness
  • Remote Team Development
  • Aligning Company Success
  • People Development

Tiny Pulse

Tiny Pulse is an employee engagement tool that assists organizations in developing an engaging, connected, and performance-driven team. The tool makes use of intelligent insights to create surveys and gather continuous and transparent employee feedback.

Solutions offered by Tiny Pulse:

  • Employee surveys and pulsing
  • Recognition and rewards
  • Annual surveys
  • Performance and coaching
  • Diversity, equity, and inclusion
Also Read: Performance management in a hybrid work culture

Leapsome

This software provides a continuous cycle of performance management and personalized learning through features like OKR management, performance reviews, employee engagement surveys, feedback, and praise. It helps in aligning the workforce towards organizational goals.

Solutions offered by leapsome:

  • Goals and OKR management
  • 1:1 and team meetings
  • Personalized learning and development
  • Engagement surveys with real-time insights
  • Development framework for employee growth

Reflektive

Reflektive is a comprehensive performance evaluation software that assists in business growth through continuous improvement. The tool helps increase productivity through constructive employee engagement and driving growth through high-performance-driven teams.

Solutions offered by Reflektive:

  • Real-time Feedback
  • Easy and quick employee recognition
  • Multiple user tagging
  • Performance and talent calibration
  • Increase and measure employee engagement through surveys
Also Read: Seven reasons why goal setting is important

PerformYard

PerformYard is a scalable performance management platform that provides intelligent insights about the workforce through data-driven features.It helps in executing performance reviews, frequent check-ins, real-time feedback, and inputs from throughout the organization.

Solutions offered by performyard:

  • Managing qualitative, quantitative, individual, and team OKRs
  • Supports upward, downward, lateral, and external reviews
  • Continuous feedback management
  • HRIS and new employee onboarding workflows
Also Read: How to build performance management metric strategy?

Betterworks

Betterworks helps enterprises scale up their performance by providing intuitive and directional insights. This performance management tool helps create a vision with the right set of goals, reviews, and continuous feedback from the employees. Managers can use features like reviews and check-ins, goal management, and continuous feedback for performance enhancement.

Solutions offered by Betterworks:

  • Deploy and track progress
  • Individual progress tracking
  • Dashboards for clear visualization
  • Gathering intelligent performance insights
  • 1:1 feedback mechanism

Lattice

Lattice provides engaging features for enterprises and supports employee growth and development. The software uses intelligent methodologies to combine performance management, employee engagement, and employee development into one holistic solution.

Solutions offered by lattice:

  • OKR and goal management
  • Continuous performance tracking through 1:1 reviews, feedback, and praise
  • Actionable people insights
  • Continuous employee development through growth plans
Also Read: How to set OKRs for healthcare professionals?

7Geese/Paycor

It is a human capital management tool that offers a range of services, like HR & payroll management, talent management, workforce management, and employee experience. It helps in building an engaging and collaborative culture to enhance the organizational performance.

Solutions offered by 7Geese/Paycor

  • 1:1 and feedback tools
  • Automated workflows to eliminate repetitive tasks
  • Customizable dashboard for coaching sessions
  • OKRs and goal management
Also Read: Steps to creating a performance based culture in your organization

ClearCompany

ClearCompany offers a platform that combines recruitment, onboarding, performance management, and workforce planning into one ambit. It offers a range of solutions that help organizations develop and nurture talent for higher performance. 

Solutions offered by ClearCompany:

  • Workforce planning and analytics
  • Application tracking
  • Employee onboarding
  • Employee engagement tools and surveys
  • Performance management system

Concluding Words

Performance management software are the key to building a skilled, motivated, engaged, and performance driven workforce. In the highly competitive and rapidly changing business environment, the success of an organization lies in how well it is managing the employees. By shifting from traditional tools to the modern tech-loaded systems, organizations can bring a real impact on their business. We hope the information shared in this article will help you in selecting the best performance evaluation software.

Performance Management System


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9 Signs Your Business Needs a Performance Management System

What is one sign that indicates that your business would benefit from a performance management system?

To help your business identify the signs that point to a much-needed performance management system, we asked business owners and HR professionals this question for their best insights. From employees repeatedly asking for reviews to high staff turnover, there are several signs that indicate a business would benefit from a performance management system.

Here are 9 signs your business needs a performance management system:

  • Employees Repeatedly Ask for Reviews
  • Numerous Missed Deadlines
  • Lack of Organization and Collaboration
  • Lowered Attendance
  • If You Know Your Metrics
  • Helps Track Goal Status
  • You Know Your Team’s Work Habits
  • Company Targets Are Constantly Being Missed
  • High Staff Turnover

Also Read: Leadership In Times Of Crisis: How To Lead Efficiently

Employees Repeatedly Ask for Reviews

When a pattern of employees asking for feedback emerges, then it may be time to implement a performance management system. Most modern workers value professional development and want to improve. Many employers fear employees being unreceptive to constructive criticism, yet overlook employees’ eagerness to receive input on performance. Team members should not need to chase down managers and beg for an evaluation. There should be a regular review process in place. Otherwise, employees may feel uncertain about their work or their future within the company. 

Also, contrary to common assumptions, hearing nothing but “you’re doing a good job and we’re happy” can frustrate ambitious employees who want to improve and would benefit from their manager’s advice and guidance. A performance management system can help leaders deliver feedback at regular intervals. It can also provide insights to better structure those conversations.

Michael Alexis, TeamBuilding 

Also read: 5 Common Teamwork Challenges In Workplaces

Numerous Missed Deadlines

Nothing indicates a lack of performance management more than numerous missed deadlines do. It is important as a company leader to monitor the turnaround time on each individual project and compare this data over time. More missed deadlines are an indicator of an opportunity to introduce a performance management system to boost your team’s performance. A performance management system helps in tracking projects and their deadlines easily.

Harriet Chan, CocoFinder

Lack of Organization and Collaboration

One of the most beautiful things to see in organizations is how they comprise multiple units, yet they collaborate together seamlessly. However, this can be nearly impossible to achieve without the proper coordination. Hence, this is where a performance management system can bring a structured framework.

When it comes to employee development, learning basic organizational skills really doesn’t cut it anymore. Instead, expand those techniques to include working with others across the company, and implementing everything you’ve learned from your traditional office environment, or from your remote working space anywhere across the globe.

Lauren Kleinman, The Quality Edit

Also read: Building A Successful Upskilling And Reskilling Program

Lowered Attendance

A performance management system does exactly that – it manages your overall team performance. And one sure sign that your company is in need of this system is when attendance begins to drop. In a business environment where employee retention is at an all-time low, monitoring your employees’ attendance may be more important than ever.

If an employee begins to miss a lot of days, be sure to schedule a meeting with them, or perhaps a quick call. If they’re not happily engaged and actually enjoy coming into work, then you need to understand why – and quickly find a way to change the scenario.

Lindsay McCormick, Bite

If You Know Your Metrics 

A performance management system is a tool. Similar to a hammer, it won’t do you any good if you don’t know where you want to drive your nail in and to what avail.
Here are a couple of questions you might wanna ask yourself:

– Could you define a single metric per role, which would serve as KPI?
– Are role responsibilities aligned between employees and management?
– How do you recognize performance?
– Do you have your processes documented?
– Do you have a continuous process review process?
– How does performance matter on a daily basis? How experienceable is performance in your daily operations?
– What are the consequences for the individual, the team/department if performance is high or low?
– How many different performance systems do you currently have?
– How transparent are your goal-setting and review processes?

Go for a performance management system if you can answer these questions, but please don’t expect the tool to answer them for you.

Reinhard Guggenberger, Soaring Fox

Helps Track Goal Status

Performance management systems are all about efficiency. One sign that your business could benefit from a new system is if you are constantly asking your team questions regarding goal or task status. Calling meetings just to gauge the status of your team’s work can really put a wedge in overall workflow and affect productivity. Project management systems relieve the need to call mundane meetings and make progress updates accessible to leaders at all times.

Peter Robert, Expert Computer Solutions

Also read: Hr’s Guide To Select The Right Goal Setting Software

You Know Your Team’s Work Habits

When some business owners think about performance management systems, they usually think of a big brother type oversight system that’s all about maintaining and optimizing efficiency. However, performance management systems can have a more empathetic use case. Instead of trying to optimize efficiency towards certain workflows, performance management systems can help business owners track and maintain workforce trends that are best for select teams. 

It’s impossible to improve business efficiency without knowing what’s actually working for your team members. As a business leader, you’re sometimes removed from what actually works for your employees, and what processes work in live business settings. Performance management programs can track what your employees are doing in real time. So you can actually follow the trends that work for them and make relevant suggestions, encouraging employee buy-in.

Kyle Risley, Lift Vault

Company Targets Are Constantly Being Missed

When the targets and goals of a company are being missed consistently, you know it’s time to implement a performance management system. HR teams and corporate leaders may not have the metrics they need to identify why company targets are missed in the absence of a performance management system. A performance management system can help close the gap in plan execution by detecting issue areas and ensuring that everyone is on track.

Sudipta Gupta, WebTopic

High Employee Turnover

If your business is experiencing a higher than expected employee turnover rate, this is a certain sign that a performance management system is required. Regularly losing staff to competitors is a costly issue. It can be detrimental to those employees who remain within the business, possibly leading to further resignations.

The reasons for large numbers of resignations can be varied, but normally they will be related to either insufficient compensation for the work performed, unsuitable work conditions, poor communication or leadership within the business, or a company culture which does not promote or encourage diversity and inclusion.

Also read: Continuous Feedback: What is it and its benefits 

A properly executed performance management system will help identify the reasons for your failure to retain staff, offering solutions which will provide greater satisfaction to the employees and reverse the trend.

James Crawford, DealDrop


Want to know about Engagedly’s Performance Management System? Request for a demo with us.

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We created this article in association with Terkel. It is a community-driven knowledge platform that creates content based on expert insights.

Your Guide To Performance Management

In the past year, many things have changed, including the way employee performance is managed. With everything gone virtual, most organizations digitized their performance management efforts. They shifted from traditional performance management practices to using performance management software. Not only this, they adopted a more holistic and comprehensive approach to performance management. In our recent survey, we asked leaders from 5 key industries to report the degree of change for different performance management processes.

‘Overall, 20% of respondents were very satisfied with the changes they experienced related to performance management and people development processes’.

But choosing a performance management software for your organization is not easy; it is a daunting task. With so many options available, it can become a difficult decision for organizations. This article will act as a guide before you or your organization invest in a performance management tool.

Supports Real-Time Feedback

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

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

Gamification and Rewards

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 appreciation and praise 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: Employee Rewards and Recognition For An Engaged Workforce

Goal Setting And Management

Goal Setting is one of the most important features of any performance management tool. So what makes goals important? It helps employees to stay focussed, keeps them engaged, and helps them measure success and productivity. Moreover, it motivates them, improves decision making and time management skills, promotes teamwork, and gives them direction.

An effective goals module would be one where employees can set, track, and manage SMART goals and OKRs. Employees should have the option to align their goals to business and team goals. They should be able to cascade their goals and add objectives and key results to their goals.

Also Read: 10 Things To Look For In A Goal Setting Software

360 Degree Performance Review

Multirater or 360 degree performance review 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 has 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.

Professional And Personal Development

Learning is an essential component of any performance management tool. This module aims at employee development, and 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. As a result, employees will tend to stay with the organization for a longer time.

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: Importance Of Continuous Feedback In The Post COVID Era

Employee Survey Tool

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.

Supports Easy Integration With Other Softwares

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: The Benefits Of  Diversion and Inclusion In The Workplace

Employee Analytics and Insights Tool

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.

Performance Reviews


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Six Tips for Choosing the Right Performance Management Software

What are the components of a good performance management system? This is a good question to ask yourself before you embark on the hunt for performance management software.

Continue reading “Six Tips for Choosing the Right Performance Management Software”

What Should I Look For In My Performance Management Software?

Traditional performance review methods are deeply flawed. And if you recognize that, more power to you. However, before you blindly pick out performance management software on the basis of the fact that anything is better than traditional performance review methods, here are few things you need to think about.

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Performance Management – Are You Doing It Right?

Business leaders are often seen talking about employee engagement, performance reviews, and management. Organizations constantly strive to standardize their administrative processes and tools to improve their overall efficiency. But why is it important to have a performance management system?

Continue reading “Performance Management – Are You Doing It Right?”