There is no denying the fact that performance management is an integral part of organizational functions. It is a mechanism to stimulate, evaluate and sustain employee performance by aligning the individual goals with the macro organizational goals. Nevertheless, organizations need productive tools to monitor and measure performance skillfully.
The traditional manual, paper, or spreadsheet-based annual performance management techniques have become obsolete. The new-age digital, cloud-based performance management systems or software have replaced the old PMS techniques to evaluate performance periodically. However, with various performance management software available in the market, selecting the one that best meets the requirements of your organization is a challenging task. This article aims to help you choose the right performance management system (PMS) for your organization.
Before investing in a PMS, you must research the objectives it will serve your organization (why do you need it?) and the specific features that will deliver positive outcomes (what do you want?). Together, it forms the characteristics of an optimal performance management system that you must consider before making the final decision.
Characteristics of a Good Performance Management System
An ideal performance management system comes with an extensive range of features. Thus, it is prudent to invest in a PMS only if it offers a wide range of services through its set of functional attributes.
Here is a comprehensive list of recommendable PMS features to take into consideration-
- Simple, user-friendly, and flexible (customizable as per organizational needs).
- Compatible with all business devices and functions and fits existing systems.
- Prompts timely reminders of the performance targets and deadlines to the employees.
- Provides projects live progress updates and raises red flags to avoid last-minute surprises.
- Facilitates smooth, two-way communication between the employer and employee.
- Incorporates skill development learning materials for new and existing employees.
- Generates real-time automated performance reports and easy-to-understand dashboards.
- Safeguards confidential employee and company data.
In conjunction with the specialized features, ascertain that the new PMS performs the following ancillary functions to track and manage the employee performance -
- Aids in setting employee goals
The ultra-modern PMS facilitates setting dynamic and SMART (Specific, Measurable, Achievable, Realistic, and Time-Bound) goals for employees. It gives direction to their performance and helps managers gauge the extent of their accomplishments.
- Serves business requirements and goals
The primary objective of settling on a PMS is to meet the employee-specific requirements of your business. It must resolve the current challenges in conducting performance appraisals, administering employee work, identifying skill gaps, motivating employees, and aligning employee goals to organizational objectives. Thus, choose a software that best fulfills your organizational needs and helps achieve business goals.
- Provides past performance information for comparative evaluation
Automated PMS puts forth a report of how far an employee has come from their previous performances. Past performance analysis forms the baseline for comparing the current achievements and evaluating the progress made so far. It helps forecast future performance and makes strategic decisions relating to employee training, promotion, etc.
- Promotes fair employee evaluation
New PMS uses algorithms and data science to measure and rate employee performance. It develops transparency in the entire evaluation process, thus fostering fairness in employee evaluation.
- Enables continuous and comprehensive feedback
The traditional rigid annual appraisals are a thing of the past now. The digitized PMS takes a data-driven approach to deliver automated 360-degree performance reviews and constructive feedback frequently (weekly, monthly, quarterly, or half-yearly). It facilitates instant feedback to stimulate continuous performance management.
- Expedites career planning
The new-age PMS focuses on the holistic learning and development of employees. It draws attention to specific training requirements, new projects, future promotion opportunities, and other growth prospects. It charts out a career development plan for the employees and drives their performance towards realizing their long-term career goals.
- Allows employees self-evaluation
Employees are self-driven if they have the means to evaluate their performance. The advanced PMS functions empower them to analyze and assess their work and the results it delivers. It encourages them to take ownership of their development and growth. They introspect their strengths and weaknesses and self-manage for enhanced future performance.
In a nutshell, check out the characteristics and functionalities listed above before getting your hands on a PMS.
Ground Plan to Choose a Performance Management System
- Identify organization requirements and goals
Set out in detail the mission of your business and the specific provisions in the new PMS that will help realize the short-term and long-term organizational goals.
- Note current Performance Management System snags
List the pain areas and the solutions you are contemplating. The traditional PMS suffers from the drawbacks of conducting annual reviews where managers merely evaluate the work done in the past year and give feedback or ratings based on age-old metrics. It lacks the fundamental driving force to employee performance - transparency, effective communication, and engagement. It sets inapt and vague goals not directed to achieving the larger organizational mission. If your organization is struggling with these issues, it is time to upgrade your PMS to a new digital version.
- Prioritize requirements
Assort your product specifications into good-to-have and must-have categories. It will help identify solutions for critical and improvement areas and complementary features to add value to your performance review processes. Deploy a PMS that addresses most of your performance management issues.
- Engage employees
Once your organization resolves to deploy a digitized PMS, it is imperative to bring in employees, share the plan with them, and take their opinion. After all, the new system is for managing and measuring their performance. Hence, involve them from the inception stage to get their affirmation and instil a sense of responsibility. It will also guarantee smooth adaptation and enduring commitment.
- Vendor research
The digital technology market is brimming with companies engaged in designing the new-age performance management system or software. Carry out extensive research of the vendors, products, price, features, after-sales services, and data privacy policies. Prepare a comparative report, gather and analyze feedback or reviews, and study the advantages it brings to your organization. You can also request demo sessions from a few shortlisted vendors before zeroing in on the final purchase.
To Sum Up
A dynamic and exhaustive performance management system is an indispensable tool for organizational growth. But to choose an appropriate one is a challenging task. The primary decisive factors are the distinctive performance management features and the employee-specific requirements it fulfils.