What is Performance Management Software?

 

What is performance management software?

Headlines for the last few years have been proclaiming that the performance review is dead. Companies are abolishing reviews entirely or radically modifying the process to adapt to these new expectations. The truth is, you can’t entirely remove performance management from your business--it’s an important part of any people strategy. What you can do is approach performance management in a modern manner.

 

At the core of this need are generational shifts. Younger members of the workforce are calling for--if not demanding--advances in performance management processes and tools. In response to this shift and demands, companies that are leveraging technology to support performance management are seeing an increase in employee engagement, performance, and retention.

 

“We are using technology to measure and analyze employee performance. By moving to an online performance review, we are able to better manage employee goals and evaluate their progress throughout the year. We are also able to communicate much easier with employees about their goals by moving performance appraisals online, so they can view their performance year-over-year,” one HR leader told Forbes

 

As companies strive to remain competitive, implementing a performance management system helps them to achieve and maintain an edge. In this article, we’ll answer the question what is performance management software, and why you should consider it for your organization.

 

The State of the Current Workforce 

 

We have seen ideological shifts between every generation and the Millennials are no different. However, the variety of needs between the Millennials and Gen Z vs. the Baby Boomers and Gen X is especially significant. This variety is driving major shifts in the workforce today. In particular, given that Millennials account for around 35% of the workforce and estimates show that number is expected to almost double by 2030, businesses must make it a priority to understand what this group needs. Millennials are demanding emphasis on remote work with work-life balance, self-development, transparency, culture, and leveraging technology more than prior generations. 

 

The Millennials and Gen Z members of the workforce are pushing for things that are changing the future of work as we know it. Though they often get criticized for their perceived lack of commitment, the Millennials’ drive for planning ahead for both flexible talent strategy and technology investment cannot go unnoticed. Interestingly, many Boomers and Gen X’ers are jumping on board appreciating the employee-focus shift.

 

The Increased Need for Performance Management 

 

Generally speaking, younger generations are more likely to be vocal about their wants and needs and will not hesitate to switch jobs when they are not met. Organizations that don’t adapt will risk losing top talent. To remain competitive, businesses must redesign from the bottom up, with a focus on creating a company culture which actively demonstrates they value their employees.  

 

The new approach to performance management is the solution. Rather than an archaic rating system or hierarchy based on tenure, performance management is a process of communication between a supervisor and an employee. It supports the organizational strategic objectives and provides a critical, ongoing communication loop that helps to set objectives, identify goals, clarify expectations, provide feedback, and review results. 

 

There have always been performance management system benefits as part of business, and with the growth of the Millennial and Gen Z generations in the workforce, a strategic approach to performance management is now more imperative than ever.

 

The Benefits of Performance Management 

 

When performance management is an ongoing process, it helps employers to understand their employees’ priorities, aspirations, thoughts, and motivations. This enables employers to determine the right strategies to drive recruitment, retention, and continued employee engagement. Following are four performance management best practices: 

 

  1. Employee goal management — Provides a sense of direction and drives higher performance. By tracking employee progress regularly and monitoring based on established goals, leaders gain insight into building employee accountability towards achieving organizational goals.

 

  1. 360-degree feedback — Presents unbiased feedback to all employees on performance, competencies, and leadership abilities. By soliciting development-focused feedback from multiple audiences including superiors, subordinates, peers, customers, and others, employees gain valuable performance insights. 

 

  1. Employee development — Millennials especially crave the opportunity for growth and development. Continuous coaching and feedback empowers employees to identify their career aspirations and goals and to work with their supervisor to create a plan to achieve them.

 

  1. Continuous performance management — Leaders gain insight into employees’ goals, competencies, and achievements with a framework for continuous real-time coaching and feedback. This includes performance appraisals with an ongoing feedback loop. 

 

Some managers may feel apprehensive about moving from one review a year to this type of ongoing strategy. However, by using technology-enabled performance management tools, the entire process is simplified and adds much more value for the manager, employee, and the organization. 

 

Reasons to Implement a Technology-Based Performance Management Process 

 

Performance management technology has revolutionized the way employees are engaged and the handling of reviews and feedback. The digitization of the process positively influences strategy development and management processes since more precise data is available. Some benefits of a technology-based performance management process include that it:

 

  • Helps employees gain alignment with the organization’s mission

  • Simplifies the evaluation process for managers

  • Helps managers establish and share clear expectations for employees and monitor performance

  • Provides data to support the growth of training and career development programs

  • Assists in rewarding and top performers and recognizing employee accomplishments

  • Encourages employees to actively participate and contribute in their performance and development 

 

Knowing that HR technology can improve performance management in your organization, the next thing to consider is how it can be applied to a modern approach.

 

Technology Options for Performance Management Tools

 

As you consider what HR Tech you need to make your performance management process come alive, there are many performance management software benefits. Look for tech tools that support the following components of performance management: 

 

  1. Performance management framework — A  tech-powered strategy and execution tool helps companies to define and communicate business priorities and objectives as part of performance management. It should also allow you to define and manage action plans to drive initiatives to deliver on them. With these in place, managers and leaders alike can monitor progress by measuring successful delivery in accordance with established business priorities and objectives.

 

  1. Performance appraisals — Your technology should allow you to align corporate strategic goals against and individual goals. To be most effective, a platform should also enable honest, fair, regular, and constructive two-way discussion. 

 

  1. 360-degree feedback — A technology-enabled system can support performance assessments by streamlining the feedback process. For 360-degree feedback, you can request input from multiple sources: managers, direct reports, peers, customers, and more. Reminders can be scheduled and results compiled easily and confidentially to share with employees. Then, insights may be used for employee training and development. 

 

  1. Reward and recognition programs — Recognize and celebrate high performers and promote continued performance through bonuses, financial rewards, and praise. Technology can simplify the communication and administration of recognition programs as well as offer options that make it easy for day-to-day recognition between peers.

 

  1. Personal Development Plans (PDP) — An HCM can simplify the process of creating tailored action plans based on individual performance involving setting goals that support personal development. The insights identify training and development needs and provide concrete steps to drive future performance. 

 

  1. Key performance indicators (KPIs) and metrics — Leverage technology to measure performance relative to strategic goals and objectives. Use learnings and data to inform decision-making and foster data-driven performance conversations.

 

Ideally, to create a streamlined, efficient process, these performance management capabilities should exist within your HCM. Thankfully, there is performance management cloud software that can deliver you the tools you need in one platform. 

 

Through our partnership with Instructure, all of your performance management needs are covered within SynchHR. In one effective and accurate HCM, you can efficiently handle HR performance management software needs, as well as payroll, benefits, and other core HR functions. As you look to answer the question: what is corporate performance management software in our organization, schedule a live demo so we can show you how the platform simplifies performance management for our clients.

 

As the Millennial and Gen Z generations become a larger portion of the workforce, they will continue to demand an employee-centric company focus. Implementing performance management programs is a necessity to attract and retain a competitive workforce. Leveraging technology to support the necessary process is a great way to improve the experience and to gain an advantage in this competitive employment environment.
 

 

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