“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 a 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 system and will explore the various features of top 10 performance management software. We will unpack the following in the below sections:
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 the 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 the performance management involves 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 realtime 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 a 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.
(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 involve 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.
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 an insight into the behavior, attitude, and work relationships of employees. The unbiased nature and subjectivity of 360 degree feedback makes it more acceptable to employees.
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 offer customizable surveys and dashboards that aid in the easy collection and visualization of employee feedback.
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.
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, a performance management software encourages employees to reward each other for their contribution and outstanding performance.
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, 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 helps in measuring the 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.
An important aspect of a 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 a 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.
Top 10 Performance Management System 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 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
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:
Improving Manager Effectiveness
Remote Team Development
Aligning Company Success
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.
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 is a comprehensive performance evaluation software that assists in business growth through continuous improvement. The tool helps in increasing productivity through constructive employee engagement and driving growth through high performance driven teams.
Solutions offered by reflektive:
Easy and quick employee recognition
Multiple user tagging
Performance and talent calibration
Increase and measure employee engagement through surveys
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
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 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
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.
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
Employee engagement tools and surveys
Performance management system
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.
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 2023.