September 7, 2021

The Importance of Performance Management

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A good performance management system that supports employee recruitment and development can be the competitive edge a company needs to win and retain top talent. The right solution will promote transparency in conversations with employees, provide actionable data, and lay a foundation for growth and success. 

As businesses tackle the intersection of retention, engagement, culture, and learning, modern performance management software is an essential tool in the HR toolkit. 

Top HR Software for Performance Management

Performance management isn’t easy, but the right HR software can help. Here’s a short list of the top HR software for performance management.

1 Paycor

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Paycor’s HR software modernizes every aspect of people management, which saves leaders time and gives them the powerful analytics they need to build winning teams. Paycor provides a full suite of HCM solutions with a single source of truth for employee data, so users never have to switch platforms, log-in to multiple systems, re-key data or open multiple spreadsheets. Everyday processes become simplified, allowing organizations to focus on their most important work.

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2 GoCo

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GoCo is modern HR, benefits, and payroll, built for flexibility and ease-of-use in mind. Manage records, performance, time off, onboarding, benefits, and more all in one place. GoCo is a secure, compliant hub for sending, digitally signing, and organizing your sensitive HR documents and data. Unlike other HRIS platforms, GoCo is built to be flexible enough to support existing processes, policies, and providers, so you don't have to change the way you work just to adopt a modern HR system.

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3 Rippling

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Rippling is the first way for businesses to manage all of their HR, IT, and Finance — payroll, benefits, computers, apps, corporate cards, expenses, and more — in one unified workforce platform. By connecting every business system to one source of truth for employee data, businesses can automate all of the manual work they normally need to do to make employee changes.

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4 intelliHR - Intelligent People Management

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Our strategic HR platform helps you create a culture based on continuous feedback, enables performance by empowering employees, and gives leaders real-time HR analytic insights like never before
- Centralize all employee data
- Seamlessly onboard new team members
- Automate and transform team performance processes
- Align, track and celebrate goals
- Develop culture with continuous employee feedback
- Customize engagement surveys and eNPS
- Self-service team details and compliance

Learn more about intelliHR - Intelligent People Management


Visit website Work OS is the flexible, no-code Human Resources software that allows HR managers to manage the entire employee lifecycle in one place. Track the recruitment process, onboard new employees with the help of pre-made templates, safely store personal information, plan team-building activities, and use automations to speed up and simplify all these workflows and many more.

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6 Leapsome

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CEOs and HR teams at forward-thinking companies (including Spotify, Northvolt, and Babbel) use Leapsome to create a continuous cycle of performance management and personalized learning that powers employee engagement and the success of their businesses.

As a people management platform, Leapsome combines tools for Goals & OKRs Management, Performance Reviews and 360s, Employee Learning & Onboarding, Employee Engagement Surveys, Feedback & Praise, and Meetings.

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Many companies are guilty of treating performance management as a yearly event where supervisors only give feedback at an annual performance review. 

However, a Betterworks survey shows that organizations focusing on continuous performance management performed 24% better on average than their competitors. They were also 39% better at attracting the best candidates and 44% better at retaining them. 

Companies where employees revise or review their goals quarterly or more frequently have:

  • Better data quality
  • Higher employee engagement
  • More efficient performance review processes
  • More input from employees

But these results aren’t really that shocking. It’s time to stop equating employee performance management with a dreaded annual appraisal. In reality, there is much more to performance management than that.

The Benefits of Ongoing Performance Management

Performance appraisals and assessments are just one piece of the talent management puzzle. In order to build an empowered and skilled workforce that meets its goals, companies need to do more than audit employee achievements. 

Organizations should work toward a management cycle where judgment isn’t the sole focus. Ongoing feedback and improvement should be just as important, if not more.

So, what exactly does “continuous performance management” look like? It’s a series of ongoing events that include the following processes and benefits:

Goal setting and revising

Every employee needs a clear understanding of expectations for their work. They also need context, which includes an understanding of where they fit into the company and how they contribute to the overall success of the organization. This starts with goal setting for the company and executive team, which cascades into manager, team, and individual goal setting.

Aligning the entire workforce with higher arching business goals sets clear priorities and direction. This ensures each employee can feel ownership in the business through individual goals and organizational objectives.

Management and coaching

Goals that are completely out of reach may need to be adjusted, but other times, employees may not have the skills to achieve their goals yet. 

Individual performance appraisals were originally intended to identify gaps in employee skill sets. But, it’s self-defeating to identify the gaps without offering any type of solution on how they can meet performance standards. 

Improved employee performance and engagement are results of consistent feedback and coaching, not a single effective performance appraisal once a year.

It’s common to hire for potential and not experience, so organizations need to provide the proper training and development programs that address performance and skill gaps. Plus, many companies like to promote from within rather than make outside hires, meaning they need to train candidates that show the most potential for leadership roles.

Also read: Succession Planning & Tackling the Bus Problem

Development planning

Employees need regular, quality feedback on their performance and specific details on how they can improve. Once the employees have identified their skill gaps, they have clear insight into the skills they need to develop if they wish to progress in their careers.

Employees should know the purpose of performance management systems is to aid in their development and have control over their career development. According to The Institute for Employment Studies, employees that receive opportunities for learning and development are more engaged at work, which is better for a business’s bottom line.

Rewards and recognition

Recognition helps employees receive a balance of positive to negative feedback. A little unexpected appreciation can go a long way. It satisfies a fundamental need for praise, reinforces the right behaviors and culture, and leverages social engagement. Rewards and recognition can improve employee retention and engagement, creating ambassadors of an organization and its culture.

Also read: Top 5 Digital Rewards & Recognitions for Remote Workers

What Performance Management Should Include

Effective performance management doesn’t end once a performance appraisal is delivered. Managers should take an integrated approach to employee feedback and learning. 

This means creating development plans that support an employee’s goals, career interests, and potential as well as the organization’s business and talent needs. Performance evaluation is only effective when used as a tool for employee growth and success.

Increased focus on driving business results

Since all goals are aligned, an employee’s day-to-day work supports the company’s mission. This promotes a year-round focus on key business results and driving profitability. Additionally, employee productivity is likely to rise because they will see the impact their work has on the organization as a whole.

An empowered and engaged workforce

Companies can deepen employee engagement by creating a culture of shared accountability for career growth and development. When employees have some measure of control over their career path, they’re more likely to take the necessary steps to advance their careers. In turn, this will improve employee satisfaction and employee morale.

Also read: 6 Ways to Reduce Employee Attrition That Have Nothing to Do with Beer

Foundational knowledge of talent

With insight into its workforce’s skills and abilities, an organization can ensure all employees are getting the direction, feedback, and development they need to succeed. It can identify high and low performers and track and evaluate the effectiveness of employee development activities.

How HR Software Can Help With Performance Management

HR software offers many helpful features that support the overall organizational goals of performance management. 

Goal setting

Managers can use the software to create employee professional development plans, while employees can use it to set their own goals and track their progress toward achieving them. This allows performance management to measure two-way, participatory progress, rather than a set of top-down directives based solely on supervisor feedback.

Coaching support

Ideally, HR software should also provide coaching resources and reminders for managers, so they have the support they need to succeed as supervisors and to help their employees improve. These documents and resources can be created by an HR manager, then uploaded to the performance management portal for all supervisors to access.

Document management

Furthermore, performance management software also centralizes all the professional development documentation for a single employee. Even if their manager changes over or they move departments, all of the notes and analytics on the employee’s past performance can still be found in the software, allowing for more comprehensive and streamlined performance management.


Implementing HR software also expands performance management beyond the immediate supervisor-employee relationship. Many HR software platforms allow for multi-rater functionality, which means that people other than HR or the employee’s direct manager can leave constructive feedback about the employee’s performance. This feedback is usually collected through anonymous surveys to allow for transparency.


HR software can also automate performance management tasks that previously had to be done manually. This makes it easier to keep track of employee progress and regularly check in. Additionally, the reporting and analytics features make it possible to track employee goals and quantify performance, which in turn enables equitable employee rewards via bonuses or other forms of compensation.

Competence management

Some HR software platforms also include competence management capabilities. This means that the performance management software tracks certifications, skills tests, licenses, and other professional qualifications that employees need to keep current. The software makes it easy to add a new certification and can issue reminders when a license needs to be renewed.

choose performance management software

To find the best performance management software for your business, check out our Employee Performance Product Selection Tool. After filling out the short survey, you’ll get a customized list of software recommendations.

Read next: Building a Strong Executive Team: Creating Consistent Talent Management Standards

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