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Performance

Performance Management System– Key Characteristics, Benefits, And Other Important Things to Know About

18 November 2022

8 min read

Lynette Teo
Lynette Teo

Employee engagement is one of the crucial things for an organization. It can have a severe impact on the business’s overall productivity. According to a recent survey by Gallup, employee engagement will continue to fall in 2022. As a result, organizations might experience some issues with their overall productivity. 

Effective performance management plays a vital role in employee engagement and development. It ensures that the employees can get performance appraisals that motivate them to perform better. However, managers have a lot of these things on their plate to deal with. 

Therefore, it might be difficult for managers to evaluate the performance of each individual. That is where 360 review software comes into play. It streamlines the performance review process for managers by automating various steps.

So, what is performance management software? What are the vital elements of this tool? And how can managers benefit from it? We’ll discuss everything in this article to give you a clear idea. Let’s get right into it. 

What is Performance Management Software?

Performance management software is a tool that allows managers to assess the overall performance of their employees. It makes things easy for HR departments and managers to set criteria according to the company’s aims and values.  

Having a good 360 review system by your side can make the evaluation process easier for you. Managers can monitor and evaluate employee performance according to the set KPI standards. It also makes it easy for managers to provide training and guidance to their employees.  

Additionally, employees also have a clear idea about the expectations the company or the managers have for them. They can work with the managers to meet the KPIs and achieve the goals. Moreover, the HR manager can also clearly communicate the goals of each department.

Key Characteristics of an Effective Performance Management Software

According to a study by Deloitte, effective performance management can lead to a more satisfied workforce. As a result, they have a better chance of meeting their financial targets, encouraging risk-taking, coming up with innovative solutions, and effectively managing change.  

However, having a robust performance management tool is vital to reap all these benefits. Therefore, there are a few qualities that you need to look for when choosing effective 360 review and communication software

  • 360 Degree Reviews

The most critical characteristic of an employee review system is that it should allow you to provide an accurate and proper review. Simply sharing bad or positive reviews won’t cut the deal. 

HR managers need to focus on the areas that need improvement and where employees have done exceedingly well. They should give tips to employees to tell them how they can work on areas that need improvement. 

  • Goal Setting

Having a clear idea about the goals and objectives can allow people to grow. It also becomes easy for HR managers to calculate how the employees are doing. According to a study, having clear goals can increase the likelihood of achieving them by 42%

Therefore, the employee performance review tools should make it easy for you to set and track the goals. Employees can keep track of how well they are doing. It will also assist you in setting goals that align with the company’s long-term plans.  

  • Communication Channel

Communication between the employees and management is vital. Whether you want to give positive feedback or constructive criticism, you need to have a digital solution that makes it easy for you to communicate and provide feedback to your employees.

Also, communication should be two ways to help you foster a cohesive environment. Therefore, the tool you choose should also allow the employees to give feedback and suggestions about different things. 

  • Automate Performance Reviews

Performance management is simply incomplete without appraisal reviews. Nevertheless, it is imperative to give the employees appraisal according to their efforts and hard work to boost the overall morale. Since managers have a lot on their plate, they might forget when to conduct one or miss out on the due date. 

That is where a robust employee appraisal system can keep track of the dates for the appraisals. It will send you notifications about the appraisal so it is done on time. Additionally, the tool will give you access to the employee’s previous performance, making it easy to carry out an evaluation. 

  • Recognition of Good Performance

Lastly, recognizing and rewarding your employees for good performance is vital so they feel valued. It will ensure that the hard-working employees get what they deserve and continue to work with the same commitment and dedication. 

The employee productivity and evaluation tools can allow you to keep an eye on the best-performing employees. You can boost their morale by rewarding them with some benefits or recognizing their hard work in front of their peers. 

Benefits of Using a Performance Appraisal Software

Performance appraisal software can help managers, entrepreneurs, and even CEOs evaluate their subordinates’ performance. In addition to that, they can also enjoy various other benefits, such as: 
  • Track Goals

Keeping a record and monitoring the goals of each individual and department also becomes easy because of the performance review software. This way, managers can quickly identify hardworking employees who have performed exceptionally well. They can reward these employees, so they feel valued for their hard work and efforts.   
  • Streamlined Process

Managers won’t have to go through the hassle of filling out documents or doing any other type of paperwork. They can assess an employee’s performance through the software and then give them an appraisal accordingly. 
  • Provide Regular Feedback

Managers can give their employees constant feedback about their performance. If an employee is performing well, they can give them positive feedback. On the other hand, constructive criticism can help employees to improve in areas where they are struggling.  
  • Identify Areas of Opportunity

The great benefit of a performance management review is that it helps them uncover areas that need improvement. They can understand the areas employees need help with and develop relevant training and resources to assist them.  
  • Employees Can Identify Their Performance

The managers and employees can also keep a record of how they are performing. The performance management software makes it easy for them to monitor the KPIs and success metrics to see their achievements.  
  • Bridge The Communication Gap

Through performance management software, managers can uncover the areas that employees are struggling with. They can adequately communicate with their subordinates to deal with this issue. 
  • Better Engagement Through Analysis

Constant reporting and data analysis can help managers keep a check on the employee’s and the department’s performances. This way, they can increase overall engagement by ensuring everyone is putting in all their efforts.

Signs of an Ineffective Performance Management System

An ineffective and counter-productive 360 review system can lead to adverse outcomes. It is essential for managers, entrepreneurs, CEOs, and other decision-makers to look for signs indicating that they have an ineffective system for appraisal evaluation
  • Doing Evaluation Manually

Businesses’ biggest mistake is that they continue to follow the traditional methods of paper and pen sys­tems for employee evaluation. It might be surprising to see businesses still following the traditional approach in the age of digitalization.  If your business follows the same practice, you should change your approach. At affordable pricing, finding robust performance management software is more than easy today. 
  • Lack of Seriousness

Another issue is when managers consider evaluating employees and performance review as a “Box-Tick­ing” exercise. They would only do the review to get through the process without contributing anything constructive.  It is a massive warning sign if the managers don’t actively participate in the performance review process. Businesses can face serious issues due to this behavior, such as high labor turnover.
  • The System Isn’t Fair

There is a difference between performance management and annual reviews. Performance management focuses more on the future growth of an employee, whereas annual reviews are an assessment of individual achievements in a period.  So, managers must conduct annual reviews once a year to create a trusting relationship with their employees. As a result, they would consider the system to be unfair. This warning sign is critical for managers to note before it creates more problems. 

The Bottom Line — Performance Management Software

The robust performance appraisal software can streamline the evaluation process for managers. It can also ensure that your employees receive appraisals and recognition for their efforts and hard work. Consequently, it will boost overall morale and lead to improved productivity. 

We hope you now have a clear understanding of the key characteristics that good performance management system should have. Also, it is essential to set clear goals for your employees that motivate them. With clear goals in mind, they can quickly and easily achieve targets.  

An essential thing to note is that the performance management tools should update you about the appraisal schedules. Carrying out appraisal meetings is vital since it can directly impact employee motivation and satisfaction. The great thing is Omni HR performance management is able to help you with that.

If you’d like to know more about what Omni HR can do for your company, do get in touch with us today.

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