If you’ve ever seen an advertisement for a pizza shop, then you’ll likely have heard them say something about how they use the best ingredients. That’s because we all know that using high-quality ingredients is how you make the best pizza. When it comes to enterprise operations, your individual employees are the ingredients you’re cooking with, and the performance of your business is the pizza. High performing employees will result in better overall business performance — but how can you ensure that your employee performance is the best it could be?
The overall performance of your organization depends solely on the performance of your employees — but it can be very difficult to track employee performance using paper-based systems. That’s why many businesses turn to employee performance management software. However, selecting the right product for your company can be difficult. You’ll need to determine your own performance management system requirements to help guide your search.
Benefits of Performance Management Software
The right performance management products make it easier to inspire workers to improve their performance. A good process for giving employees feedback on their performance requires far more than just an annual review. Fortunately, a performance management product can assist with that.
Performance management software makes it easy to provide ongoing feedback to employees and encourage constant improvement. This ability will also help increase employee engagement by providing you with data about which employees are disengaged, making it easy to start a dialogue about where the disconnect is. Tracking performance will also provide you with information about which employees are most effective and which employees may need some help to reach their potential.
What to Look for in a Performance Management System
A good performance management system will help you provide your employees with ongoing updates on their performance and offer opportunities for recognition and feedback. This allows your employees to actively contribute to progress and even give input themselves. The net result of this is that the system of performance is a lot more collaborative, which improves engagement between workers and management.
One of the ultimate goals of investing in a performance management system is to encourage a culture of improved performance and engagement across your entire organization. To assist in this process, the best performance management systems usually have a social aspect that allows you to easily share achievements with every employee (or with groups of employees). When looking for software, be sure to consider features like this that will boost employee engagement.
Your employees will also benefit from the opportunity for skills development all year round. When selecting a new product for your HR department, you’ll want to have a good idea of your own specific performance management software requirements, which will help guide your search. In order to do this, you’ll need to assess specific challenges within your current business practices and determine which software features can help you tackle those hurdles. Below are some of our key requirements for any performance management solution.
One of the biggest criticisms of management by workers is that they have no idea what their employer expects of them, which makes them unsure of their part in achieving the overall goals of the organization. A good performance management system should be able to rectify this problem.
Look for a system that provides a goal setting facility that’s straightforward to use and tracks progress. Managers should be able to set goals for individual workers so that the organization can use them to set departmental goals, as well as their overall goals for the long- and short-term.
Customizable and Configurable Goals
Alerts and Notifications
Performance Evaluation System
Among the variety of functions you’ll want to look for to gauge performance is 360-degree feedback. What does that mean? Well, an employee works with many other people, such as customers, suppliers and colleagues. Any feedback provided by those that the employee interacts with needs to be added to the employee’s record so that a holistic performance appraisal system can function properly.
A good performance management system makes it easy to collect and record 360-degree appraisal data. The HR team can relate the survey questions that have been prepared in advance with the flexibility to create their own. The HR team can also send out status updates so that all parties are up to date. A performance management system can even produce summary reports after the entry of the data. These reports can be very useful for managers and employees alike.
Performance-Based Review Tools
Configurable Appraisal Forms
Sign-In and Sign-Off
Automatic Alerts and Reminders
Employee Lifecycle Management
The best performance management systems provide consistency for every organization and ensure that all managers and employees follow the same process, regardless of what level they are and where they’re located.
Take a very close look at the way that a performance management system handles job descriptions. All employees, no matter if they’re at management or sub-management levels, need to have a very clear understanding of what’s expected of them. Without a clear job description, there’ll be confusion, so people won’t be clear on what their responsibilities are. A good job description isn’t just a list of tasks — it needs to include the essential elements of every position and the qualifications that are required to perform that job.
However, while important, the best performance management systems won’t stop at helping you create job descriptions. A great performance management product will provide tools that can help you through every stage of the employee lifecycle, from when you begin evaluating candidates to when an employee leaves your business.
Applicant Tracking System (ATS)
Job Requisition Management
Inevitably, your employees will leave their position within your company. Whether it’s because they’re relocating, ready for a new job or it’s time to retire, you will eventually be faced with the task of filling these open positions. One of the best ways to prepare for this is to plan ahead and develop the employees that you already have. This way, they’ll be ready when promotion opportunities present themselves.
A succession management feature can help plan ahead so you know what kind of development different employees will need based on their goals within your business. After all, no one knows how your company operates better than your employees — so planning to promote internally makes a lot of sense.
Talent Pool Management
9-Box Talent Matrix
Career Development Planning
Succession Reporting Tool
More and more organizations are now linking good performance to compensation. Even some of the top performance management systems don’t have the capability to accommodate this, which is very surprising.
When you can’t link compensation with good performance on your system, manual systems have to be implemented, which creates additional work for field managers and HR staff. Payroll mistakes are then likely to happen, at which point your employees very well may become disgruntled if they don’t receive their compensation in a timely manner.
So look out for a compensation management tool when you’re evaluating performance management systems. It can take into account the pay grade of the worker and the ratings that they receive in their performance reviews. The system then makes automated recommendations for compensation.
What are the advantages of a compensation management function? Well, the first is that the approval of pay raises happen a lot quicker, which is very good for employee morale. Secondly, it improves the consistency of compensation throughout the organization.
Total Compensation Planning
Base Salary Admanistration
Budgeting and Reporting
Reporting and Analytics
The best performance management systems prompt managers to hold regular discussions with employees about their performance. Shortly after these take place, the key points from the discussion can be noted using reporting features. Your system must have these capabilities so that the manager can record any performance-related ideas and suggestions. This should be very easy to do anytime, and there should also be a facility to include any attachments to the notes that are relevant.
Having a reporting feature for each employee record can be a great tool for the continuous improvement of employee performance. It allows you to paint a more accurate picture of the employee’s performance throughout the year and can help make the annual reviews a lot easier and quicker. This is especially true of systems that provide you with analytical capabilities.
Managers should be able to analyze and consolidate real-time data about their team members. For example, you might want to measure the impact of a training initiative on the team’s performance as a whole, as well as individually. You may also want to look at performance trends and identify any inconsistencies in the system. There are countless other analytics reports that would be useful, so find out what the flexibility is for creating them. If you find that a vendor’s system is lacking in this area, then you might want to consider exploring other options.
Multiple Reporting Options
9-Box Reporting Tool
Employee Performance Related Report
Learning and Development
All organizations should offer their employees the capability for skills development, as this provides additional motivation for them to improve their performance. If employees want to advance, then this also serves as a good way to get them to the next level.
Most of the performance management systems available enable employees to upload their own skills development documents, as well as other media. The best systems even provide access to external libraries of online training that can enhance employee education.
When workers use these facilities, they’re showing that they’re keen to improve themselves and grow as an employee. It helps the organization retain their employees for a longer period of time, as there’s a defined career path that they can follow. It’s your duty to provide all of the tools possible for employee development, and as such, it’s an essential tool to have as part of your performance management system.
Mentoring and Feedback
The Wrap Up
Performance management software is a valuable tool for any business. The ability to evaluate and enhance employee performance is a major benefit that will help drive your business’ success. Because of the importance of effective employee management and development, you’ll want to ensure that whichever system you decide to implement is the best fit for your organization.
In order to thoroughly evaluate all your options, you’ll want to develop a list of requirements. Consider what your pain points are and determine which performance management features can remedy them. You can then use this employee management system requirements list to guide your search and compare vendors to ensure that whichever product you choose meets all of your needs.
Which feature is most important for your performance management system requirements? Let us know by leaving a comment below!