There are many HR software systems available, both in the form of dedicated performance management software platforms and performance management features within HRIS or HRMS software. Because the wrong software could slow down the performance management process as well as cost money, it’s essential for companies to choose the right pm systems the first time.
But how do you know which performance management system is the right one?
What Are Performance Management Systems?
The first step is to understand exactly what a performance management system is and how it can help your organization. A performance management system doesn’t just digitize the annual review process. It helps organizations set clear goals and expectations for employees to follow. On top of that, a pm system can help companies to recognize successes, reward employees, and provide feedback regularly when it’s most useful.
What Is the Purpose of a Performance Management System?
Secondly, understanding the purpose of a performance management system is essential to find the right one. When you know how such a system is meant to help your organization and your employees, you can start to see how it can work to better your company. A performance management system’s purpose is to track employee performance more frequently and consistently in a measurable way that can provide valuable insights that can be used to grow your company.
What Types of Performance Management Systems Are There?
The third step is to understand the different types of performance management systems that are available. Each type meets a different set of needs and it’s important to determine which type you need to look for before you start your search.
The different types of performance management systems include:
- 360-Degree Feedback System
- Management by Objectives (MBO)
- Competency-Based System
- Forced Distribution
- Graphic Rating Scales (GRS)
What Are the Elements of Performance Management?
Fourthly, you’ll need to understand exactly what elements performance management encompasses. This is so you have realistic expectations of what a pm system can do for your company and how it can improve your existing performance management processes.
A lack of clear goals and expectations can negatively impact employee performance. This is because they can’t meet objectives they don’t know exist. It can also reduce morale because employees don’t feel like they understand what they’re supposed to be doing and never know whether they’re doing a good job. Using a performance management system can fix this problem with its goal-setting features.
Performance Monitoring and Employee Feedback
Performance appraisal systems can play an important role in monitoring employee performance and providing feedback. Most companies already offer annual reviews, but these often aren’t timely enough to make a real difference in employee performance. These features of a pm system monitor performance continually and enable managers and coworkers to give helpful feedback when it’s most likely to make a real impact.
With a performance management system, everyone can get involved. Employees can use it to leave feedback for each other and to manage their goals and objectives. Managers can monitor employee progress and performance.
At a higher level, a performance management system can also help to develop employees over their careers. The data gathered over time by a pm system can help managers see how employees have grown and where they may still need improvement.
Rewards and Recognition
Employees who do a good job deserve to be recognized and rewarded for their efforts. In fact, compensation for a job well done is an excellent motivator for employees to improve their productivity and work quality. Failing to recognize or reward performance can decrease employee motivation to work more effectively.
What Factors Should You Consider in Choosing a Performance Management System?
When you’re ready to start looking for a performance management system, any software you choose should:
- Be compatible with your existing software platforms
- Align with your company’s objectives and strategies
- Be easy to use for all employees
- Promote employee development and improvement
- Provide reports and analytics you can use to guide future decisions