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Simply put, performance management software is technology that helps companies better understand employee productivity. It allows leaders and managers to track, analyze, and evaluate workers’ performance in order to ensure goals are met and problems are addressed proactively. The data collected by performance management software can inform decisions about compensation, career trajectory, company goals, hiring, and just about anything else related to human capital management.

Why Implement Performance Management Software?

There are many reasons to implement performance management software, but they can all be summed up as “better, clearer communication and expectations.”

Imagine a highly talented employee. She has worked for her organization for over a year and has demonstrated obvious success in her role. During her performance review, her manager discusses with her the possibility of a promotion, and she expresses her interest in becoming a leader.

Unfortunately, after the review, the employee’s appraisal is put into a folder and set aside. No firm plan is created. Her leader, though convinced she will be an amazing asset in management, has to choreograph her professional movement through numerous meetings and conversations. It takes a significant amount of time to create actionable goals and assess the employee’s progress toward them. Because there’s no structured performance management process, many of the employee’s goals are spur-of-the-moment assignments with little strategic impact. Throughout all of this, the manager has 10 other employees to lead as well.

The employee feels confined to her role. She is unable to see how her work contributes to her future as a leader in the organization. After months of hitting and exceeding her goals with little reward, she decides to look for a new job outside the organization.

If this organization had adopted performance management software, the employee would have had a better idea of the goals she needed to meet and their impact on her future promotion. The supervisor would have been able to create a structured career plan the employee could follow. The employee may never have felt she needed to consider new employment to have the career she wanted.

Performance management software addresses these issues and more, thanks to features like:

  1. Easily Navigable Dashboards: The top advantage to performance management software is its ability to organize key performance data in one central location. Performance management tools make it easy to navigate and understand the data, helping leaders make better decisions for their employees. Employees, too, can track their own performance through the software and receive real-time feedback from supervisors.
  2. Coordinated Performance Review Cycles: Whether your organization follows a traditional annual review cycle or uses another process, performance management software can help coordinate, organize, and schedule reviews.
  3. 360-Degree Reviews: The power of 360-degree reviews, in which employees receive feedback from their peers in addition to their supervisors, can be incredible. Performance management software makes it exponentially easier to conduct such reviews, allowing for anonymous assessments and an easy way to track feedback from multiple sources.
  4. Customizable Review and Assessment Scripts: It is a best practice to base performance reviews on the unique values and goals of your organization, which means one size doesn’t fit all when it comes to review structures. Many software solutions come with customizable scripts and assessment scales so that your performance management process fits the needs of your workforce.
  5. Performance Tracking: Continuous tracking of employees’ goals allows leaders to see progress clearly while identifying employees in need of guidance and intervening as needed. If continuous performance information is made available to the employee as well, everyone will be on the same page — so there are no surprises.
  6. Employee Development and Succession Planning: Employees need continuous support in order to become effective contributors to the organization, especially in the long run. With performance management tools, you can track employee development, assign long-term goals, and align individual workers with the direction of the business overall.

Do I Need Performance Management Software?

You should consider investing in performance management software if:

  1. Employees complain about your current performance management process.
  2. Your HR team spends a lot of time organizing performance paperwork and knocking on doors to track down completed documents.
  3. You have a manual performance review process that involves printed documents and Excel spreadsheets.
  4. You’re experiencing low employee engagement and/or high turnover rates.
  5. Too many employees consistently miss goals and deadlines.
  6. You are concerned your current process may leave room for risk when deciding on promotions, compensation plans, and terminations.

If there is one thing HR teams understand, it is that hiring a new employee means making a long-term investment. No matter how experienced or educated a hire happens to be, they will require guidance, training, and support to reach their full potential at your organization. Performance management is critical to both employee and organizational success — and the right performance management software can ensure you get the most from your performance management process.

A version of this article originally appeared on the ClearCompany blog.

Sara Pollock is head of the marketing department at ClearCompany.



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