The 5 Best Performance Management Systems of 2025

We’re at a crossroads when it comes to our performance management systems. They’re not working for anyone, from executives to employees, according to Gallup research and Deloitte’s 2025 Global Human Capital Trends Report: 

• Only 2% of CHROs say their systems inspire real improvement. 
• 72% of employees don’t trust their company’s performance management processes. 
• Just 32% of executives said their systems helped them make more informed, faster decisions about high and low performers.  

Instead of driving engagement, fostering growth, or informing crucial decisions, many systems are creating barriers. That can put your business at a competitive disadvantage to those prioritizing adaptability and alignment. It’s clear that we need more effective performance management in 2025 and beyond, and that starts with better systems. 

It’s time to reimagine performance management, combining strategy with the right software to deliver actionable insights and greater efficiency. The best software solutions aren’t just powerful tools for tracking performance, automating review cycles, and aligning goals — they’re drivers of innovation, retention, and growth. 

Find out why you need a system supported by performance management software and how to choose a solution that works best for your organization.

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What Is a Performance Management System?

A performance management system refers to the processes a company uses to align, measure, and improve employee performance. It’s the framework that ensures your team understands their goals, takes accountability for achieving them, and continuously develops their skills. Your systems are key in making sure employees are contributing to impactful work that moves the needle and are motivated to do their best.

A well-rounded performance management system incorporates processes like:

• Setting measurable goals that are aligned with organizational goals
• Tracking progress toward goals 
• Giving regular feedback on progress outside of formal reviews
• Formally evaluating performance with employee reviews, including self-assessments and 360-degree feedback
• Recognizing and rewarding big accomplishments and great work
• Offering learning and development (L&D) opportunities
• Identifying areas for improvement and skills gaps, as well as strengths 
• Creating employee skill development plans 
• Mapping career paths and succession planning
• Monitoring performance trends to get ahead of potential issues and understand improvement

Historically, managing these processes required a lot of manual work, from creating employee evaluations to coordinating review cycles to analyzing the results — if you ever got that far. You’re left with performance systems that don’t scale, limited insights, and inconsistent outcomes.

Today, you can leverage performance management software to automate your workload and give you the depth of insight you’ve been missing. Importantly, “performance management system” doesn’t refer exclusively to processes. It also encompasses the software that brings those processes to life and makes them more efficient, scalable, and data-driven. 

The right technology isn’t just for optimizing your performance management processes. It also adds transparency and structure, which builds trust and boosts employee engagement. A true performance management system includes both the strategic framework and the toolset you use to bring it to life. Don’t just monitor performance — actively improve it at every level of the organization.

Why Should Companies Use Performance Management Software?

Take another look at the stats we opened with in this article. There’s a major disconnect between the types of performance management systems that work and the ones we’re actually using. Between executives, managers, and employees, no one is happy with the current state of their systems. 

On the bright side, companies realize the need to address their broken performance management systems — 65% said they know it’s important. Unfortunately, only 6% are making real progress, despite the fact that it’s worth it to focus on your people’s performance. When they do, companies report 30% higher revenue and 5% lower attrition rates.

Did you know the right performance management system can boost revenue by 30%? 💡 Find your best-fit solution today with ClearCompany’s Buyer’s Guide. 🏆

Performance management software is the missing link, bridging the gap between knowing there’s a problem and solving it. You use software to automate repetitive tasks like tracking goals, coordinating reviews, and consolidating feedback. That allows your HR team and managers to focus on what really matters: improving engagement, spotting high performers, and making informed decisions.

More importantly, performance management software doesn’t just make systems faster or easier to manage; it makes them actionable. You gain real-time insights into your workforce, empowering you to make data-driven decisions that boost productivity and retention. Meanwhile, your employees can see clear links between their efforts, goals, and recognition. That builds a culture of trust and motivation.

You don’t have to stick with outdated systems that frustrate and demotivate. Replace them with modern software equipped with the tools you need to make real performance gains for both the business and its people.

The 5 Best Performance Management Systems in 2025

1. ClearCompany

ClearCompany Performance Management is designed to empower employees and drive real results. Our system streamlines your workflows, automating the repetitive tasks, while giving you access to tools and data that drive collaboration and engagement. 

With ClearCompany, you’re not just managing performance efficiently, saving tons of time for managers and your HR team. You’re building a culture of growth and recognition where employees are empowered to thrive — developing new skills, doing their best work, and driving your business forward. 

Key Features and Benefits

• Customizable Performance Reviews: Easily create tailored review cycles with pre-built templates for annual reviews, 360 feedback, and more. You can also design your own performance evaluations. Save time and ensure reviews are meaningful and aligned with your goals.
• Mobile-Friendly and Inclusive: Employees can complete reviews on their mobile devices and in their preferred language, making the process accessible and seamless for everyone.
• Goal Alignment Tools: Keep employees and managers on the same page with tools for setting goals, defining success metrics, and tracking progress. Give every employee a unified vision to work toward. 
• 1:1 Collaboration Workspace: Strengthen manager-employee relationships with a dedicated space for sharing updates, action items, and continuous feedback to reference during one-on-one meetings and performance reviews. 
• Employee Recognition Tools: Build a positive workplace culture where recognition is consistent and amplified with features like digital Shout Outs and automated Celebrations for milestones and achievements.
• AI-Powered Reporting and Analytics: Gain actionable insights with ClearInsights, AI talent analytics sidekick from ClearCompany. Identify top performers throughout your organization, understand performance dynamics, and monitor review cycle progress.
• Connected Learning Management System (LMS): Link performance management and employee development with ClearCompany Learning. Offer personalized learning experiences, use performance data to inform compensation decisions, and create targeted L&D programs to close skills gaps. 

ClearCompany combines powerful tools with an employee-first approach to help your company unlock your team’s full potential. Make performance management a strategic advantage with ClearCompany. 

2. BambooHR

BambooHR is a popular choice for small businesses and startups, built to help small HR teams stay organized and efficient. Its performance management tools emphasize streamlined feedback and easy goal tracking. 

Key Features

• Easy-to-use goal-setting and review interface
• Email reminders and completion notifications
• Innovative peer feedback capabilities

3. SAP SuccessFactors

SAP SuccessFactors is an enterprise-level solution that combines performance management with talent development. It’s well-suited for organizations that want to link employee development to performance outcomes.

Key Features

• Continuous feedback tools
• Performance tools that tie to employee learning initiatives
• Customizable workflows

4. Trakstar

Trakstar offers simple performance management features with an emphasis on easy goal-setting and review cycles. Its user-friendly tools are ideal for small to mid-sized businesses looking to streamline performance tracking.

Key Features

• Simplified templates for creating reviews
• Dashboards to track team goals and performance data
• Automated notifications for keeping employees on task

5. Culture Amp

Culture Amp blends performance management and employee engagement tools, making it a good choice for companies focused on building a positive company culture and improving performance. Its surveys and 360 feedback tools help companies improve relationships and outcomes.

Key Features

• Peer and 360-degree feedback tools for well-rounded reviews
• Easy-to-use platform to reduce learning time for teams
• Combines culture-building features with performance tools

Best Practices for Implementing a New Performance Management System

1. Define Your Goals

Success isn’t possible without first defining it. As always, your first step in any big project or investment is setting a goal for what you want to achieve. Start your search by answering this question: What’s driving your search for a new performance management system? 

Is it a need for a structured review process and cycle automation? Are you looking to increase lagging productivity? Does your company need to close growing skill gaps? Whatever the reasons, start with clear goals. 

2. Launch in Phases

Instead of an abrupt switch from the old system to the new one, roll it out in phases. Start by launching the software with a few employees or a small team, get their feedback, and work out any kinks before full deployment. 

3. Train Your Teams

To get the most out of your new system, make sure everyone knows how to use it. Provide training sessions tailored to different user groups, like managers, HR staff, and employees. Interactive tutorials, guides, or even short how-to videos can help encourage adoption and make sure no one feels overwhelmed.

The best performance management systems offer training during implementation and ongoing resources, including interactive webinars, a library of help articles, and live customer support.

4. Focus on Transparency

A new performance management system can feel intimidating without clarity. Make sure employees understand how the system works and how it benefits them. Share how performance data will be used to help add new skills and grow strengths. Open communication builds trust, the foundation of employee engagement. 

5. Monitor and Refine

Your tech implementation strategy is really an ongoing process that shouldn’t stop at launch day. You need to be sure your system continues adding value, employees are trained on new features, and your team has the tools it needs. Get regular feedback from your HR team, managers, and employees on performance management tools and strategies, then use those insights to inform constant improvement. 

Find the Best Performance Management Software 

The perfect software solution is out there — but how do you know which is the best performance management system for your business? With so many options available, you want to be sure you choose a solution that matches your goals and supports your team’s success. The right software doesn’t just make performance management easier — it transforms it into a powerful driver for growth, engagement, and retention.

Take the first step toward smarter performance management. Find the best-fit software with ClearCompany’s Performance Management System Buyer’s Guide.