Employee performance management software

Employee performance and business performance go hand in hand – as one improves, so does the other. Reaping the rewards of this dynamic, however, means enabling a workforce to reach its full potential. In other words, employers must assess and manage their employees’ current performance, help them feel connected to their work and encourage them to stay focused on their goals. All these objectives and more are possible with employee performance management software.

What is a performance management system?

A performance management solution is a software tool for helping employees understand what is expected of them, how they are currently performing and ways they can improve their work. Leading solutions are flexible to suit an organization’s evolving needs and can help employers perform the following:

• Enable continuous conversations between managers and employees, with the ability to provide feedback on a set schedule or as needed.
• Create a simplified, intuitive process that engages employees and managers to increase the adoption of performance processes and tools.
• Clarify role priorities and contributions to team and organizational success, i.e., goal alignment.
• Equip managers with dashboards that make it easy to understand real-time team performance and better identify the needs of their people.

What are the types of employee performance management software?

Depending on their employee performance needs and organizational objectives, employers may be able to take advantage of the following:

• Basic employee performance management solution
  Web-based applications allow employers to create performance factors and goal measurements, which can then be used to develop employee performance evaluation forms for managers.
• 360 leadership feedback surveys
  Business leaders can better understand their effectiveness by receiving feedback from those who experience their leadership on a regular basis, such as direct reports, managers or peers.
• Advanced talent management system
  Organizations that require succession planning, pay-for-performance or learning and development programs might benefit from a full talent management suite.

The business impact of employee performance evaluation software

Employers are interested in performance management because individual contribution drives business results. Financial earnings, business processes, quality assurance and customer products or services may all be impacted by employee performance.

With such critical outcomes on the line, businesses rely on performance review software to help managers and employees discuss development goals and jointly create plans to achieve them. As employees pursue those goals and further their professional growth, the organization is more capable of achieving its objectives.

Top employee performance management software benefits

Managers and employees using performance management software solutions can engage in a year-round process that helps keep the entire organization on track and productive. To that end, some solutions make employee performance information connected and actionable. ADP’s talent management solution, for example, allows employers to perform the following:

• Integrate performance management with the HR system of record for end-to-end sharing of critical performance data.
• Keep feedback and review cycles moving forward with minimal need for HR support.
• Get at-a-glance insights into group and employee performance status, progress and needs.
• Enable HR teams to assign competencies at a company, group or job level.

Common challenges of performance management

Modern expectations of work and productivity have made performance management more complex for managers. Many of them are hindered by an outdated, inflexible infrastructure built for the last century’s workplace.

A performance management process may be antiquated if it:

• Is one-size-fits-all or a check box
• Happens too infrequently
• Is top-down and one-directional
• Hinges on a single relationship
• Is tied to compensation rather than employee development
• Focuses most on correcting deficiencies

What is performance management software used for?

Organizations use performance management tools to drive greater productivity, collaboration and growth. There are six phases where the technology may be deployed for this purpose:

1. Performance and development planning
   Managers and employees review principal job responsibilities, identify company and team objectives, decide upon projects, and discuss performance standards.
2. Goal setting
   Managers and employees establish goals that reflect each worker's key business priorities. They may also create a developmental plan to ensure employees have the knowledge, skills and abilities to achieve the performance expectations.
3. Monitoring performance and development
   Throughout the year, managers monitor their employees’ performance based on the documented job responsibilities and developmental plans. If expectations change at any point, the plans may be revised to reflect those alterations.
4. Coaching and feedback
   Managers provide ongoing feedback to employees to help them identify strengths and areas for improvement. To be effective, these communications must be rooted in honesty and objectivity.
5. Performance review and discussion
   At year’s end, managers and employees meet to discuss accomplishments and any needed improvements. Specific results and objective examples of performance should be cited with each assessment.
6. Recognizing and rewarding performance
   Managers reward employees for high performance throughout the year. Simple verbal recognition and other nonmonetary forms of acknowledgment, such as greater autonomy, can be highly motivational.

Who uses performance management software?

An interactive, intuitive experience is critical with performance management software because it can potentially have a more extensive user base. HR administrators, as well as managers and employees, may leverage the solution at different phases of the performance review process.

However, there may be different levels of access. HR administrators typically have a high degree of visibility within a performance management system, whereas managers and employees tend to have narrower access with more specific, associated views.

Frequently asked questions about HR performance management software

What are the key components of a performance management system?

The capabilities of a performance management system depend on the software provider. For example, ADP’s performance management software includes these key features:

• Dashboards provide at-a-glance insights into group and employee progress, performance and needs.
• Touchpoints enable continuous dialogue, re-align goals and deliver coaching outside the traditional annual cycle to drive employee engagement and productivity.
• Talent insights help managers assess the risk and impact of losing talent so they can make informed decisions and improve succession planning.
• Integration with ADP Compensation Management allows employers to create pay-for-performance programs.

What is the performance management process?

Performance management is how employers maintain or improve employee job performance. The process usually involves performance assessments, coaching, counseling and continuous feedback.

How do I choose the best employee performance management software?

Employers shopping for performance management software may want to look for flexibility and a full spectrum of capabilities, including pay for performance, talent insights and performance evaluation. In so doing, they are more capable of curating a process that suits their organization’s needs, delivers improved performance and fuels the development people crave.

What are performance management best practices?

Managing a productive workforce that can transform a business and help it accomplish its objectives is not always easy, but it can be achieved with best practices, such as these:

• Determine an employee’s work performance goals and expectations
• Align the goals with the department or company’s long-term objectives
• Encourage ongoing, two-way conversations between managers and employees
• Identify what employees accomplished and how goals were achieved
• Provide feedback and give employees objective assessments of their overall performance
• Identify developmental opportunities for continuous improvement

This article is intended to be used as a starting point in analyzing employee performance management HR software and is not a comprehensive resource of requirements. It offers practical information concerning the subject matter and is provided with the understanding that ADP is not rendering legal or tax advice or other professional services.