Let’s face it: the world of employee performance management software can be a confusing place. With so many solutions in the market, it can be difficult to figure out what to look for in a software product, what features to prioritise, and how to get the best value for money.
Demand for employee performance management software is at an all-time high. According to a Verified Market Research report, the global performance management software market is predicted to grow from USD 2.29 billion in 2019 to USD 5.82 billion by 2027, a huge leap in just a few years.
This growth is hardly surprising. Effective performance management is the holy grail for many organisations. For instance, GE’s two-decade transformation under the leadership of former CEO Jack Welch is attributed to his uncanny ability to get 250,000 employees working to the best of their abilities and “pulling in the same direction.”
The rise of employee performance management software is just the next step in the evolution of performance reviews. These solutions offer several notable benefits, such as but not limited to:
Automating repetitive tasks
Providing access to real-time employee performance data
Scheduling tasks such as employee feedback, helping managers meet expectations for when and how to provide feedback
Collating all information in one place
Providing an accessible view of performance and review history
Creating consistency and standardising the approach across the organisation.
But the sheer variety of software products on the market that can be used for performance management — ranging from dedicated platforms to all-in-one HR systems — can make it challenging to find a solution that works for your organisation. At Appraisd, we regularly advise our clients to determine what’s most important in their performance management process and draw up a list of requirements that are “must-haves” in any software. In other words, there is no such thing as one size fits all. You’ll need to be clear about what you need so you can assess how an employee performance management system delivers against your needs. It is vital that you have a clear process in mind before looking for your software solution. If you don’t have this in place, even the best tool will not give you the outcome you want.
If you’re unsure where to start, here’s a short list of performance management software features to look out for.
Key features of effective performance management software
1. Goal-setting features
Whether it’s OKRs, Rocks goals or SMART goals, nearly all performance management software solutions offer goal-setting features that enable managers to work with employees and:
Set performance targets
Monitor their progress
Hold them accountable for generating results
Provide motivation to achieve these goals.
For best results, look for systems that make it easy for employees and their managers to link these to the company’s goals. This benefits your organisation and also motivates your team members. Case in point: the BBC reports that a 2022 study by McKinsey found that 70% of employees say that work defines their sense of purpose, and when that work feels meaningful, they perform better and are much more committed to their organisation.
Aligning individual performance goals with your company’s wider business goals creates shared objectives that drive your business forward, ensuring that the work your people do contributes to the success of your organisation.
2. Manager check-ins
Look for software that simplifies the process of scheduling manager check-ins, whether initiated by the employee, manager, or anyone else. Manager check-ins provide a valuable opportunity to connect with individual team members, identify potential issues early and take appropriate action.
Key questions to ask when assessing this feature in employee performance management software include:
Can it set up different types of check-ins?
Can these be easily updated?
Can these be initiated through other communication platforms like Teams or Slack?
3. Organisation-wide reporting
Your performance management software should provide reports where individual employees, teams, managers and department heads can view clear and easy-to-understand data. Also, systems should allow for integration with 3rd party data analysis tools such as Microsoft Power BI for combining and analysis of system data. This may seem common sense, but you’ll be surprised at the number of software products on the market that keep performance data in silos.
Appraisd Tip: Look for software that lets you tailor reports and filter information as needed. Software should make life easy for you, allowing you to extract and export data whenever you want.
4. Flexible performance reviews and feedback
One of the frequent criticisms of performance reviews is that they happen too infrequently. The build-up to the big annual performance appraisal is why many find them so stressful.
The answer is to move towards a more agile approach to performance management — one where reviews happen more often, such as bi-annually or quarterly and employees can check-in frequently with their line manager to review their progress. . In fact, 46% of British workers say that more regular check-ins with their managers would make them feel more engaged and focused at work.
You want employee performance management software that lets you go beyond the traditional annual review and conduct appraisals at intervals that work for your business.
5. Automated scheduling
Another reason employees (and managers for that matter) take a dim view of performance reviews is that they often take up too much time. With nearly half (42%) of employee performance appraisals in the UK still being documented in printed format, it’s no surprise that many people are still drowning under paperwork.
Employee performance management software should remove or significantly reduce the administrative burden of scheduling and arranging performance reviews. Look for software with a healthy range of automation features, including scheduling, reminders, etc. At the very least, it should support your existing tools, such as email, calendars and communication systems.
6. Coaching conversations
Look for software that enables you to provide continuous coaching conversations that allow your employees to receive regular or ad hoc feedback using real-time data. This capability is especially attractive to younger people in the workforce, 51% of millennials said that feedback should be given continually or very frequently, according to a report by PwC. Meanwhile, 66% of Gen Z workers say they want feedback from their line manager at least every few weeks to stay focused and happy in their roles.
Coaching conversations allow employees to fully understand their job requirements and see a clear path forward for continuous improvement. They have the freedom and autonomy to find their own solutions, rather than relying on line managers to provide all the answers.
7. Talent profiling features
It’s not enough for your performance management solution to feed you raw data about your employees’ performance. It should also help you get a clear view of trends, assisting in identifying top performers and those needing more support and coaching. The idea is to use your employee performance management software to help spot, train and retain great talent, showing employees there are opportunities to progress within your organisation.
Appraisd Tip: Software that lets you share admin-level reporting with HR can help you identify potential leaders and create an internal pipeline for career development and advancement. This is particularly important for younger workers, 61% of whom actively seek opportunities to move up the ladder or increase their work responsibilities.
8. Employee development features
Conversations about career growth and advancement with team members should happen more than once a year. Look for employee performance management software that helps your managers better understand employees’ career concerns, whether it’s skills development or progression. Your software should also enable you to set career milestones and personal development goals across all kinds of timeframes, allowing you to keep growth opportunities top-of-mind across the company. Remember, nearly three-quarters of millennial and Gen Z workers are likely to leave their roles within the next 12 months if they don’t have access to skills development opportunities.
Make your software work for YOU
Effective performance management software promises to digitally transform your performance appraisal processes, introducing new efficiencies that make life easier for workers and line managers. However, your choice of software solution should adapt to your needs rather than the other way around. It’s why out-of-the-box performance management software rarely generates the same results as a system tailored to your specific circumstances. Be clear about what features are important to you and don’t get distracted by bells and whistles that are irrelevant.
If you need a dedicated performance management platform that complements your ability to execute strategic goals through data-driven staffing decisions, let Appraisd help. Speak with one of our experts to discuss your performance management goals.
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