What is Employee Performance Software?

In a study of C-level and senior executives, the Economist Intelligence Unit found that people management is the biggest HR challenge today.  In addition, the study found that it’s expected to be the second-biggest problem in five to ten years.  This is due to several factors, such as globalization and more remote workers.  Whatever the cause, businesses are searching for ways to more effectively manage their employees.  That’s where employee performance software comes in.

Employee performance software is also known as performance management software or performance management systems.  But no matter what you call them, they help managers evaluate employee performance.  Specifically, it tracks, analyzes and evaluates performance for managers.  In turn, this bolsters your talent management efforts by making it easier to get and keep your best employees.  Let’s take a closer look at what it does for businesses and how it benefits them:

Insights into Employee Performance

The insights from employee performance software helps identify your most effective employees.  The system is able to track every employee’s performance by collecting and analyzing data in real-time.  McKinsey Quarterly notes how several companies use this data to save time.  “[Companies are] focusing specifically on individuals who are a step function away from average—at either the high or low end of performance—rather than trying to differentiate among the bulk of employees in the middle.”

Now managers can concentrate on bettering the poor performers and rewarding their most productive.

Increase Employee Engagement

A Gallup survey found that worldwide, 87% of employees aren’t engaged in their work.  As you can imagine, a lack of engagement leads to lower productivity and poor performance.  Performance management software is one of the best tools to help solve this issue.  By looking at the data, you can find which employees are your most and least productive.

This allows you to talk to each of them and find out both what engages and disengages them.  You can then take this information and adjust your business accordingly.  To increase employee engagement, common changes include reassigning tasks and adding small, fun breaks or events.

A Benefit for Everyone

The most beneficial piece of employee performance software is that it’s good for everyone.  The business benefits from better retention and productivity, plus goals can be reached faster.  Managers enjoy easier communication and save time by automating performance reviews.  With automated performance reviews, managers can focus on making decisions with their insights.

Automated reviews are more objective than when done manually, which benefits both managers and employees.  Because of this, employees are more likely to take them to heart and apply the feedback.  Managers also get more consistent performances from their employees because of this.  Lastly, employees benefit from the clearer goals and expectations set using these insights.

Even more enticing for them is that the best employees stand to benefit the most.  As their productivity and potential becomes clearer, they’re more likely to receive bonuses and promotions.  This obviously keeps these employees happy, and therefore more engaged and productive.

Top Solutions

Interested in buying employee performance software?  We can help jump start your search with some recommendations below.


A cloud-based solution with a mobile app, BambooHR is the number one performance management system for SMBs.  BambooHR provides core HR services, including an employee performance module.  Some of the best features provided by BambooHR are its self-service and reporting capabilities.  The reports in particular make employee reviews very easy.


Namely is one of the biggest competitors to BambooHR, with powerful core HR features for any size business.  The talent management module is especially strong, with one of the best performance reviews on the market.  This is aided by tracking tasks, defining competencies and creating custom reviews for each employee.


CoreHR has the highest community rating in our HR Leaderboard.  They chose a pretty self-explanatory name, as they too offer core HR functionality.  But CoreHR is definitely no slouch when it comes to employee performance management.  It offers separate dashboards for employee performance management, goal management and competency management.