Performance management software is a vital HR tool designed to automate the various processes associated with employee performance evaluations, goal setting and creating individual development plans.
Fundamentally speaking, employee performance management systems (also commonly referred to as performance management tools) are digital solutions specifically tailored for HR teams and managers, giving them the ability to measure how well each individual employee is performing; i.e. how they’re doing in their assigned role and the tasks that come with it. Performance management is often integrated with more comprehensive HR software suites, along with other solutions that have to do with managing an organization’s human capital, such as workforce management, talent management, payroll, accounting, etc.
There are a number of data points that are often used in order to figure out an individual’s value and effectiveness within an organization, resulting in the creation of a complete profile of that employee that can then be referenced at any given moment when making key staffing decisions, such as whether to terminate an employee, give them a salary raise or promote them to a higher position within the company. A performance management system can collect, organize and analyze data from multiple performance reviews and appraisals. Gone were the days of the annual employee performance review, as nowadays the review process is being conducted almost continuously through ongoing performance tracking and 360-degree feedback tools.
Before we can discuss how performance management systems can be utilized more effectively by a small business or startup, we must first understand how performance appraisals and employee performance software solutions work. When it comes to performance management, which is also known as performance review software, it’s best to consider them as a sum of all their parts. What does this mean?
A performance management system consists of a variety of functions that are designed to work together in order to help managers track and measure a team member or employee’s performance and productivity. All the information is digitally captured, organized and maintained either on a local server managed by the organization or through a cloud-hosted service. Performance management software is merely a single aspect of a much larger human capital management platform and it aims to analyze and quantify critical employee and workplace data.
An annual performance review, for example, is an effective strategy for measuring an employee’s competency, but this process only occurs once every year. While this particular performance review process works on a yearly basis, a more granular approach where employee performance data is captured on a more frequent or continuous basis can provide a more meaningful impact on the personal and professional development of individual employees.
The modern employee evaluation process that many of today’s cloud-based performance management solutions offer can help workers improve their performance, boost employee engagement and enhance their productivity within the organization. Coincidentally, this will also play a significant role in increasing workplace morale.
Additionally, a cloud-based performance review solution can provide managers as well as HR teams with relevant information as to whether or not a particular employee should get a promotion. The data this kind of software delivers could also be used to identify underperformers and determine whether they deserve the opportunity to improve or if their lagging performance warrants the act of finding a replacement.
It is through switching from annual performance reviews to ongoing performance tracking and 360-degree feedback that you will get a much more consistent flow of information regarding the performance and productivity of your employees. This applies to organizations of all sizes, even small companies and startups. Modern performance management systems can also help businesses and organization to move away from paper-based performance reviews to a fully digital and cloud-based employee evaluation process.
Among the core functions of performance management systems that are useful to small businesses are goal setting, 360-degree and ongoing feedback tracking, as well as employee development tools, also referred to as coaching. Performance management software gives you the ability to track the performance of individual employees through ongoing performance tracking and 360-degree feedback. The ongoing performance tracking feature allows you to collect and analyze manager-employee feedback in real-time. You can then use the information to map employee productivity and compare it to your preset objectives and goals.
Now, the set goals and objectives can be set through the objective/goal setting function that is often offered natively in most cloud-based performance management systems, including software for small businesses and startups. This is the feature that you will most likely use to set and configure objectives and goals for every employee or member of your team. This approach will help individual employees develop their personal and professional acumen.
The 360-degree feedback function is where you will often get a deeper understanding of employee performance and productivity. It can open the communication channels between the managers and their subordinates. This feature allows managers, supervisors, co-workers and teammates to leave anonymous feedback on specific employees. Basically, employees can provide feedback about the performance of different individuals and vice versa. They can also comment on their managers and supervisors and provide useful insights.
A feature like 360-degree feedback will not only give you meaningful insights into the level of performance your employees are putting out; the tool can also provide employees with valuable insights into how others perceive the quality of their work and their overall performance. Once they can identify their strengths and weaknesses, they can begin to slowly work on their shortcomings while nurturing their perceived personal and professional assets.
For most HR departments and teams, the need for actual meaningful workplace information remains a constant struggle, especially when it comes to talent management. Not too long ago, filing cabinets filled with folders containing every employee performance reviews, employee development plans, compensation and payment information, as well as other sensitive personnel data were a common sight in the workplace.
Today’s modern HR teams, however, use cloud-based performance management systems to help optimize and simplify employee performance appraisals, performance tracking and goal setting processes. One of the biggest advantages to using performance management software is that it allows your human resources department to be more efficient. HR management can be difficult and time-consuming without the right tools. The paperwork alone that is involved in workforce management is a challenging prospect, especially for smaller companies with limited personnel.
With performance management software, you can start moving away from paper-based employee evaluations. The advent of digital file management and searchable databases has made almost every business process more efficient, including performance reviews. A cloud-based performance management system enables your HR department, managers and even employees to get a deeper understanding on the strengths and weaknesses of each individual employee. With the self-assessment feature, individuals can also give insights into how they see themselves within the company and how they gauge their own performances and the quality of their work.
Consistent and ongoing performance tracking provides useful motivational information. This is another significant benefit to implementing the right performance management software for small businesses. In today’s work culture, many individuals rely on continuous feedback to help them improve their performance and productivity. This applies to all types of businesses, regardless of size. It is, however, crucial for smaller companies to help their employees improve faster and more consistently, so the business can quickly grow and expand. The success of a startup or small business depends on the personal and professional growth of its workers.
For modern employees, understanding where they excel at and which aspects need more improvement can provide a huge advantage. As performance management systems capture, organize and analyze employee performance data, the employees themselves can gain actionable insights that will help them figure out what they’re doing right and what they’re doing wrong. Having a better appreciation of their weaknesses can motivate them to do better in the future.
This software can help you identify and acknowledge good employee performance. Identifying good performance and giving acknowledgment to those employees who are performing exceptionally well in their job is a vital aspect in human capital management. When an employee, for example, accomplishes a goal or an objective, they need to be rewarded for their efforts so they will do even better in the future. This will give each and every employee great motivation to perform and deliver the best quality of work, which will ultimately reflect on your business performance.
Good performance management software for small business has the capacity to deliver the results that you want as a small business owner, an employer or a manager. It has all the basic functions that you need to effectively capture performance review data, set goals and objectives for individual employees and build a workable development plan that they can follow.
As small businesses and startups begin to scale up their operations, the need for a suitable performance management system becomes more apparent. Now, performance management software that is designed for small businesses with basic employee evaluation needs is a lot more common than you think.
In fact, a lot of commercial cloud-based solutions in the market do offer pricing plans and packages that are tailored for small businesses and startups. They are user-friendly and often equipped with all the basic features and tools that you would need to effectively track and manage employee performance. A free version or a free demo can help you understand the product and determine whether or not it’s the right fit for your current operation.