Performance review software

Constructive feedback isn’t always easy to give, but many employees value it. They may want to know when they’re doing a good job and when there may be room for improvement.

Employee evaluations are also beneficial to employers who need to determine if a merit-based promotion, transfer or raise is warranted. Performance review software can make these assessments easier. Solutions are available with a range of capabilities, from simple forms to complex coaching and rewards systems, and can often be customized to fit different scenarios.

What is performance management software?

Employee performance management software is technology that helps employers evaluate whether their team members are meeting expectations and improving. It can assist with:

• Setting professional and personal goals
• Tracking strengths, weaknesses, and accomplishments
• Sparking meaningful conversations between managers and direct reports
• Reinforcing performance expectations

How does an employee performance review tool work?

Software that automates performance management eliminates excess paperwork, improves managerial visibility, and streamlines processes. For instance, these systems can prompt employers to regularly provide feedback to their team members. They may be reminded to chat with an employee each week or send a monthly email reporting the employee’s strengths and weaknesses.

Why is it important to have a system in place for reviewing employee growth?

Most people would not want to be left in the dark, unknowingly doing their work incorrectly. Conversely, employees are more likely to be happy and engaged if they feel they are progressing in their careers. Setting goals and tracking achievements also helps inform performance-based raises.

What are the goals of HR performance management software?

Performance management is about helping people thrive. Software designed for this purpose empowers employers to fulfill the following objectives:

• Emphasize employee strengths and how they benefit the organization
• Identify opportunities to improve that may enhance the employee's work experience
• Track progress made against any short- or long-term goals the employee set

What should employers look for in employee performance review software?

The best performance review software will accurately reflect performance, make administration efficient for managers and be accepted by employees as a valuable tool. Providers who meet these expectations tend to:

• Use cascading goals and multi-rater feedback to sync employee performance with business objectives
• Support various performance processes, including annual reviews, ratings systems and continuous feedback
• Provide in-depth visibility into employee performance, productivity and strengths
• Deliver real-time coaching and collaboration capabilities

What are the benefits of performance management software tools?

When managers are empowered with the right tools – assessments, personalized reports, coaching resources, etc. – they develop as leaders, their team members grow as individuals, and the whole organization benefits. Helping people achieve their goals and recognizing them for it can also improve employee engagement, productivity, and retention.

Types of performance and appraisal software

Performance management software may support any of the following appraisal techniques:

Performance rankings

This traditional approach ranks employees from highest to lowest performers. Although seemingly simple, performance rankings may be difficult to interpret, particularly if employee goals are not properly aligned with organizational objectives.

Rating scales

Another time-tested method, rating scales measure employee performance on a scale of one to five. The challenge with them is defining each of the numbers, which can sometimes open employers to potential bias.

Regular check-ins

Instead of reviewing performance annually, managers and employees meet on a more frequent basis, e.g., monthly or quarterly. A traditional form may not be required since technology can document the discussion online.

Real-time feedback

Often used in conjunction with check-ins, real-time feedback allows employers and employees to connect outside of their regularly scheduled meetings. However, organizations must ensure that both managers and direct reports are adequately trained in delivering and receiving constructive feedback.

360-degree reviews

Employees may receive targeted feedback from their supervisor, peers, staff and sometimes even customers. The results are used as a coaching and development tool, but like real-time feedback, proper training of all parties involved is necessary.

Future impact of performance management software

Although some companies still use performance rankings and rating scales, many others have found that these methods don’t work well for them. The future of performance management software lies in alternative approaches, like frequent check-ins with real-time feedback.

Already coaching has taken on a profoundly expanded role in business and is now a key component of maximizing the productivity and engagement of an organization’s employees. In fact, it is one of the most effective methods for growing and retaining top talent at every level.

Frequently asked questions about performance management software

Who uses performance management software?

At its core, performance management software is designed to facilitate constructive feedback between managers and their direct reports. However, HR representatives and executive leaders may also access these solutions to analyze performance data and make decisions about compensation.

What is the performance management process?

There isn’t one definitive way to conduct a performance review. However, by considering their organization’s needs and including essential components, employers can likely develop a way to deliver performance feedback that’s useful and effective. Traditional methods include rankings and ratings; modern techniques include check-ins, real-time feedback and 360 degree reviews.

What are performance management best practices?

Some effective strategies for evaluating employee performance include the following:

• Challenge managers to set specific goals and milestones that can be measured throughout the year.
• Make performance management a constant process even if annual review cycles are still relied on as a guiding light.
• Identify developmental needs that offer ways to help employees improve rather than rehashing old disciplinary incidents.
• Be prepared with timely questions and relevant data when employees arrive for their evaluations.

What are the key components of a performance review system?

Performance management systems generally give employers the ability to:

• Customize their employee evaluation process, e.g., annual reviews, frequent check-ins, 360 feedback, etc.
• Help employees set performance goals that align with larger business objectives.
• Track employee development with clear visibility into their strengths and weaknesses.
• Facilitate coaching and real-time feedback between managers and direct reports.

What is the difference between performance review software and a performance management program?

Performance review software is designed to help employers measure their employees’ performance during a prescheduled evaluation. These meetings usually take place annually or quarterly. Performance management programs promote coaching and on-demand feedback in between formal review sessions. They may leverage performance review software for optimal effectiveness.

Should I use software for employee performance evaluations?

Using technology to track employee performance allows everyone involved to focus on the true purpose of performance reviews – having meaningful conversations that help people improve in their roles. Performance management software also helps reduce paperwork, improve visibility, and streamline processes.

This article is intended to be used as a starting point in analyzing performance review 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.