5 Main Components of the Perfect Performance Management System

Here’s How to Choose the Best Employee Performance Management System

Shivasankari Bhuvaneswaran

January 15th, 2019 Performance Management  

More and more, successful organizations are leaving behind their existing manual and time-consuming approaches to appraising their employees’ performance. These companies are choosing to invest in a performance management system that can streamline their processes, improve consistency, and potentially save them valuable person-hours.

But with so many options out there, how can you pick the best performance management system? We’ll look at some of the most critical areas for savvy organizations who are considering moving their current process to a digital performance management system.

performance management system

What is a performance management system?

A performance management system is a mechanism for tracking the performance of employees consistently and measurably. It allows the company to ensure that employees and departments across the organization are working effectively towards achieving the business’ strategic goals. Successful businesses gain an advantage from having employees better aligned with corporate goals.

Top features of the best performance management systems

Most performance management systems have several different components built into them.

1. Past performance details

This allows managers and employees to review achievements and successes and put the current performance in context. It also shows how they have performed against their role profile, and gives set objectives for the year.

2. Feedback mechanisms

A good performance management system includes a section for capturing 360-degree feedback on an employee’s performance.

3. Personal performance objectives for the future

You and your co-workers will set SMART goals for the coming year, along with agreed actions on how to achieve them.

4. Ratings and scores

You will be able to assign ratings to your team’s performance, and a good performance management system will allow the business to customize these options to fit in with their existing performance scoring process.

5. Development plans

This part of an employee performance management systems allows employees and managers to detail the expectations relating to what they should work towards and achieve in the future, as well as capturing any associated information about potential future training needs, promotional opportunities or other development related topics.

How can a performance management system benefit my organization?

Switching your existing processes to a performance management system can yield a much more efficient performance management process among these other benefits:

1. Better consistency across the performance management process

By tracking performance, you can make sure you are using the same metrics across all employees.

2. Objectively identify high performers and training needs.

A transparent performance management system will clearly show which employees are doing the best based on a fair system, and where training gaps exist.

3. Review training effectiveness.

You can note how well a training course impacted the performance over a certain period.

4. Increased motivation and morale of employees.

Employees feel more engaged where they know people actually care about their performance and where they get consistent feedback.

5. Better employee retention.

Many people will leave jobs where it is clear that what they do doesn’t matter. When you clearly link performance to corporate and individual goals, it gives people yet another reason to stay.

6. Time savings.

Without painful paperwork, evaluations can be filled out, shared, and processed much faster, making the process easier and repeatable.

Traditional performance appraisal vs performance management

Performance management system

Performance management systems does more than just performance appraisals. A good performance management system has the following components.

  • Manager Reviews
  • 360 Feedback
  • Engagement Surverys
  • Social Recognition
  • SMART Goals
  • Succession Planning

Top 5 performance management systems

There are a variety of systems on the market that offer organizations digital performance management solutions. Here is a summary of the top five out there:

1. UltiPro

UltiPro offers a range of online HR software services (including an automated performance management process) for organizations seeking to integrate several of their HR functions with one provider.

2. Kissflow HR Cloud

Organizations around the world use Kissflow HR Cloud for their HR processes because it’s so easy to make your own system rather than adapting to someone else’s. By creating your own forms and workflows, you can come up with a performance management tool that fits your organization like a glove.

3. Zoho People

This system is ideal for smaller or medium-sized businesses. It provides straightforward HR tools to oversee the performance management system.

4. ADP

ADP is a high-level solution that works with a range of businesses across a number of sectors to provide digital HR solutions, including performance and talent management processes.

5. HRLocker

This system offers an easy and intuitive way to automate the performance management process by eliminating paper forms and allowing managers to set digital reminders for performance conversations with their team.

Take performance management system to the new level

Whether you are building yours for the first time, or just looking for a change, having a great performance management system is essential to great work culture. Sign-up for Kissflow HR Cloud’s free demo and use it as a benchmark against other performance management tools to see what it’s like to have a fully automated system to evaluate your team!