Performance Management System

Ongoing feedback, continuous growth

Turn periodic performance reviews into an ongoing conversation that generates constructive feedback and meaningful, measurable improvement throughout the year.

Establish

Establish a common language across a company’s global talent management initiatives.

Recognize

Recognize key drivers within your organization to increase employee engagement levels.

Assess

Assess employee capabilities to identify strengths, gaps and opportunities for learning.

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As your business grows, you will want to integrate a structured oversight system that will help you manage employees. A performance management system is going to include software that helps track employee activity and enables regular feedback. The right system will speed up performance management and make it easier to deliver fair reviews.

With an effective performance management system in place, employers can:

  • Track training progress and requirements
  • Detail plans and expectations
  • Set up reminders, notifications and checkpoints
  • Clarify performance ratings and scores
  • Increase timely feedback
  • Incorporate a compensation model
  • Access performance appraisals and reports

Managing employees in a way that encourages top performance can sound deceptively simple and tools are only as good as the hand wielding them. To increase productivity and quality, companies of all sizes could benefit from a performance management system. Examples of best practices to utilize your performance management system effectively include:

Defined Goals: Identifying leaders, clarifying tasks, improving remote productivity—performance management systems can do a lot, so determine what your company wants to accomplish.

Specified Roles: Always clarify expectations to give employees the best chance for success.

Appointed Monitors: Determine is in charge of watching employee progress and monitoring the system data to ensure things don’t fall through the cracks.

Frequent Coaching: Use the system to provide regular feedback and suggestions, rather than a yearly review that might come as a surprise and offers little chance for adjustment.

Actionable Feedback: Give clear guidelines for how performance can be improved with measures that define success or failure.

Professional Communication: Everything should stay professional and not be made into a personal attack. Focus on behavior and performance—not personality or characteristics.

System Integration: From alerts to learning resources, choose a system that will incorporate other tools seamlessly for more convenience.

Performance Management Process

Companies that start to hire larger teams may be starting to ask, “What is a performance management process?” The performance management process is going to come down to the individual company and many will take different approaches. Performance management methods will differ based on industry standards, company culture, employee job requirements and team size.

Once you’ve established what your performance management system is in place to accomplish and you’ve defined roles, you will start in on the process of managing performance. Common performance management steps include:

Planning: Using the goals as a starting point, management will consider the details of the system and how to best motivate employees. Most systems will include defined tracking, clear scoring and even rewards for improvement or top performance. It is important to gather employee feedback to have a system in place that is as effective as possible.

Coaching: Meetings should be regular and feedback frequent. Everything should revolve around solutions and opportunities, not negativity for failures. Keep things upbeat with actionable plans for improvement or employees may avoid being honest about struggles and feel frustrated by a lack of clarity.

Assessing: At the end of the year, an employee review or performance appraisal should be completed to look at overall progress and productivity. This is the time to examine if the coaching, rewards and tracking were effective or if the process needs adjustment. The employee should feel no surprises with the review, since coaching has stayed on top of providing regular feedback.

Recognition: From financial bonuses to special opportunities, leadership opportunities and corporate acknowledgement, recognition is the key way to keep employees motivated for improved performance. And then, gather feedback from employees to start the planning step for next year’s performance management process.

Performance Management Models

Performance appraisal methods have changed dramatically in the past decade with new technology. The data and capabilities of today’s performance management tools have increased the accuracy and efficiency of employee tracking, resulting in better performance management techniques. Older performance management models are still followed in many respects, but the tools are far better for assessment.

In 1964, Victor Vroom penned the Expectancy Theory which held that individuals acted because of the satisfaction they would feel with meeting set goals. This model for performance management holds that employees are motivated by the expectations of future events (or reward systems).

In 1968, Edwin Locke put forward the Goal Setting Theory that believed individuals were only truly motivated if they accepted the goals as valuable. This performance management model requires employees to “buy-in” to the direction of the company and their goals as a cog within the machine.

Companies often try to implement combinations of these theories. For some tasks, management will motivate employees with intrinsic rewards through feelings of professional value and accomplishment. Other tasks that are harder to buy into may be backed with extrinsic reward systems that offer value in exchange for meeting goals, like bonuses, earned time off or recognition from management.

Performance Management Tools

There are various types of performance management systems that could be used to track employee activity, relay information and assist management with reporting. Performance management tools can offer a number of different features and package options. You may be able to access customizable forms, compensation modules, budgeting tools, user-friendly dashboards and more.

Finding the best performance review software for your business will really come down to your organizational needs. Some tools are going to fit more companies than others, but everything is going to come down to the priorities and goals of your company.

When considering performance management tools, choose a tool that is widely recognized as accurate and easy to use. You will probably want a tool backed by a team that offers continuous performance management software support and is highly responsive if you need help.

Your system shouldn’t just record occurrences, it should encourage company culture. The best performance management tools are going to:

  • Offer consistency and accuracy
  • Identify improvement or struggles
  • Track training and compliance requirements
  • Review training effectiveness
  • Motivate employees with clarity
  • Streamline management processes
  • Enable better feedback cycles

Tools might offer a wide range of elements you don’t need and won’t use, costing you more for unnecessary features. So, look for software that sticks to the tools you need to meet your goals.

With a good tool in place, it will still be crucial that the planning and implementation is carefully considered. The tools themselves will help automate and streamline tasks, but they won’t be able to motivate and coach on their own. Management has to be on board with turning the tool into an entire performance management system that aligns with corporate goals and company culture.

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