Performance Management Software

What is Performance Management?

Performance management software allows human resources (HR) departments and managers to assess the performance of employees, ensuring alignment with company goals. A type of talent management system, performance management software empowers companies to keep an eye on employee performance at an organizational and individual level.

Generally, performance management software offers features for setting employee goals and expectations, tracking employee performance in real time, coaching, conducting one-on-one meetings, collecting feedback, and recognizing employees’ accomplishments with rewards. After gathering performance management data, management can make more informed decisions around employee compensation and career advancement.

A performance management solution can be a standalone application that integrates with other HR systems, such as payroll. Alternatively, it can also be a module within a complete HR management platform.

Features of Performance Management Software

Employee performance management software helps align your workforce to corporate objectives, measure and evaluate individual employee performance, and continually measure organizational results. The software digitally tracks all activities that ensure employee goals are consistently met in an effective and efficient manner.

Traditionally, companies conduct performance reviews at least annually. However, it’s important for employees to receive continuous feedback in order to understand how they perform and contribute to corporate goals and how they can take the next steps in their career development. This means aligning and assessing performance regularly by gathering feedback from a direct manager, team members, peers, and indirect managers.

An employee performance management system will offer the following functions, which the company and manager can use to gain insight into an individual’s overall strengths and potential:

Coaching management

Managers use coaching management tools to organize the goals of each of their reports, build career plans, track training and assessments, and store communication and employee evaluation. Many modern coaching management features also provide a place for reports to message and interact with their manager directly via chat.

Performance appraisal management

Many companies have moved from the annual employee performance appraisal model to more frequent performance assessment periods including weekly and monthly. A performance appraisal module gives companies a centralized location to store, analyze, and track changes in their employee performance from year to year and across appraisal periods.

Goal-setting, alignment, and management

Goal tools help managers and individuals write goals and track their performance toward them in a centralized and consistent manner. Today’s tools prompt individuals to update their progress toward goals, solicit feedback from the managers, and compare progress to benchmarks.

Feedback management

Feedback management tools collect and organize real time feedback around employee goals or performance metrics, giving both the employee and their manager a place to document updates and thoughts regarding goals.

Competency management and skill assessment

Employee competencies and skills management tools track certifications, skills tests, and licenses that keep the organization compliant with local and state regulations. These tools can also be used to understand an individual’s most valuable skills, plan training, and map succession within the organization.

Development planning

Career mapping and development planning are key components of any employee engagement plan, and robust performance management software will include tools that support human resources teams and managers in planning long-term career moves with individuals.

Performance and productivity analytics

Analytics tools help companies determine whether their efforts are paying off. Performance and productivity analytics aggregate performance metrics and employee productivity KPIs to better plan for the next steps and assess the success of current projects.

Pay for performance

Many companies base bonus and commission rates on individual performance toward and above goals. Pay for performance modules in performance management systems help teams tie pay directly to accrued metrics and progress toward goals.

Mobile capabilities

As with everything in tech today, portability improves both the manager and employee experience by giving them the freedom to complete performance tasks outside of the office, on a commute, or at home. Mobile capabilities also bring performance conversations to a context where many individuals are more comfortable sharing honest feedback: their phone apps.

Reporting and analytics

No modern app is complete without reports and analytics that provide insight into the tool’s effectiveness, the employee’s performance, or the company’s improvement. These modules are a must for proving the worth of the HR tool to a CFO or CEO and can give actionable insight for teams to use when planning future initiatives.

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