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Performance Reviews Performance Management Employee Experience

A Guide to the Best Performance Review Software of 2024

June 29, 2023
10 min read

Performance Management System Buyer's Guide


Performance reviews have long been the cornerstone of assessing employee performance. Annual reviews rose in popularity in the 1940s and were being used by around 90% of companies by 1960, according to Harvard Business Review.

Over the past decade, and especially in the past few years, we’ve watched reviews evolve beyond the traditional once-annual evaluation process. 82% of employees said their company was giving annual reviews in 2016, a number that dropped to just 54% by 2019. Most recently, SHRM reported that 49% give annual or mid-year performance reviews.

Fewer and fewer companies are giving up #annualreviews. Find out how to use #PerformanceReview software to give more frequent and useful reviews:

Today, growth-minded companies understand that they can only scale successfully when their employees are growing, too. At these companies, HR teams need to take a proactive approach to performance reviews to ensure that employees are consistently aligned with the organization's goals, vision, mission, and core values. They also need to create reviews that both track and encourage employee development.

This is where performance review software comes into play.

We’ve talked about the definition of performance reviews, how they’ve changed, and why they matter. We’ve also touched on how to approach performance reviews today and the role the human resources department plays in fostering an employee-first process.

In this post, we’ll explore the importance of software for proactive performance management, enabling continuous feedback loops, and promoting a strong company culture. We’ll also delve into the key features, benefits, implementation strategies, and some of the top performance review software solutions available today.

What is performance review software?

Performance review software is a tool that enables human resources teams to create, send, and manage regular review cycles for their employees digitally. Traditionally, performance appraisals were done on paper and largely relied on what employees and managers could remember from the recent past. That’s probably why only 28% of CHROs said annual reviews were accurate, and 55% of employees said reviews didn’t help them improve. 

Today, we know employees want reviews more than once a year and want to discuss their performance often. They’re also looking for opportunities to grow. We also know that when companies review and discuss performance often and reskill or upskill their employees, it pays off.

Get 7 performance review tips for managers for your best review season yet.

Software tools make it possible for HR teams of all sizes to pull off a continuous performance management strategy and effective performance review cycles. Software enables reviews that both make it easier to keep track of accomplishments and progress and actually improve overall performance on an individual, team, and company level.

The best performance review solutions for reviews aren’t just for giving the reviews themselves. Instead, they’re modules of a performance management system, which are used to manage all the moving parts of employee performance. That includes setting, aligning, and tracking goals, giving continuous feedback, analyzing performance company-wide performance, and more.

Features of the best performance review software

Many performance review software features are must-haves, and some are nice to have depending on your business needs. But your list of wants vs. needs isn’t the only thing to look out for when you’re choosing software. You should also take note of whether the software has characteristics that make it a good fit for your company.

Take a look at this list of important elements and decide where each falls for employee reviews.

1. Templated and tailored reviews and rating scales

Employee reviews are typically role-specific, which ensures that workers doing the same jobs are evaluated according to the same criteria. However, creating one effective review is also challenging and time-consuming, let alone reviews for each role. Although you wouldn’t use the exact same standards to rate performance for an HR generalist and a customer service representative, you want to be able to make broad comparisons about performance across the organization.

That’s why you need software that offers ready-to-use and completely customizable options for ratings and reviews. Software that comes with its own library of templates removes the roadblock of building your own, offering a variety of templates you can use right after implementation or customize to your needs.

If you want to build your own review from scratch, use examples of performance review questions from the template library or write your own. You can also choose a rating scale to use across the company.

With software, you can ensure that your performance reviews and ratings are standardized across roles or departments, that employees are rated fairly, and that you can analyze company-wide performance.

2. Automation tools

One of the most difficult — and important — parts of employee reviews is keeping them on track and consistent. But it’s also difficult for HR to stay on top of review completion and manage multiple cycles and review types. With software, your team can automate email reminders and review cycles and send the right reviews at the right time of year effortlessly.

3. Accessible on mobile devices

85% of Americans own a smartphone, and for around 15%, it’s the only device they use to access the internet. Look for review software that has mobile capabilities to make it easier for your employees to complete reviews whenever and wherever they have time.

85% of Americans own a smartphone, which is why your #PerformanceReview software needs to offer mobile reviews to increase completion rates:

4. User-friendly and intuitive

While your payroll software might only be used by a few HR team members, performance review software is used by every single employee. When you’re evaluating potential software solutions, make sure to test the software as an HR user, a manager giving a review, and an employee review subject.

5. Robust reporting and analytics capabilities

Data collected by your performance software is only useful if it’s presented in a way that makes sense. Look for software that offers a variety of performance reports that can drill down into the data on a granular level. If you can create custom reports, that’s an added bonus for your business.

6. Part of a complete Talent Management System

The most valuable review software is not just part of a larger performance management system but of a comprehensive Talent Management System. A talent management system has tools for managing the entire employee lifecycle, from recruiting and onboarding to engagement and workforce planning. These systems help you create a cohesive experience that attracts top talent, engages and develops employees, and makes accurate plans for the future.

Top 5 benefits of performance review software for HR and employees

While there are very few benefits of traditional methods for conducting reviews, there are countless benefits of performance review software. Your HR department — and your employees — will quickly begin to see these advantages of using HR software for a tech-powered approach to appraisals.

1. Start review cycles quickly

Employee review software offers all the tools you need to kick off a review cycle as soon as you implement the solution, as well as the ability to create your own reviews. Pre-built templates lower the barrier to entry for busy HR teams who may not have time to put together custom reviews.

2. Give fair reviews

The templates we mentioned also help your team design and conduct fair reviews that ensure employees are evaluated on the same criteria as their peers. Decrease bias and support diversity, equity, inclusion, and belonging (DEIB) at your organization.

3. Engage employees

Performance reviews are not just a means to spot high performers and address productivity issues. Reviews done well can be the difference between disengaged employees who are costing you money and thriving employees who are interested in their work and growing steadily. Performance management statistics show that employees who get feedback from their managers daily are three times more engaged than those who get only yearly feedback.

Get examples of performance review goals to use to boost employee productivity, morale, and engagement.

4. Save time and money

Traditional performance reviews will cost you — company-wide, Deloitte was spending 1.8 million hours on reviews; at Adobe, 2,000 managers spent around 80,000 hours. It’s not necessary, according to employees — 55% of managers say they could save time on HR tasks if they had the right tools. At a time when HR is spending nearly $200 per employee on administrative tasks, software is the time- and money-saving solution for the long term.

5. Gain insight

Software is capable of collecting tons of data — take your phone, for example. It can accumulate data about you and your daily habits, including how long you sleep, the number of steps you take each day, and your age. It uses the data to send you lifestyle suggestions, like what time you should go to bed and when to take more steps.

Review software does something similar, gathering an astonishing amount of performance data and aggregating it so you can easily make connections and comparisons. Your HR department can use what they learn from the data to make suggestions to HR leaders, executives, and other departments.

For example, your performance data can reveal managers who are consistently over- or under-scoring employees. You can then adjust scores to ensure they’re fair and reflective of actual performance as well as retrain the manager on how to evaluate employees.

5 Best Performance Review Software Tools

Performance review software is expected to be a $5.8 billion market by 2027, so there is no shortage of software providers and innovation in the space. Here’s a closer look at five of the top performance review software solutions available today.

1. ClearCompany Performance, Engagement, & Goals

ClearCompany Performance, Engagement, & Goals is holistic performance management software that not only enables seamless reviews but supports an employee-first strategy. It offers tools for different types of performance reviews, peer-to-peer recognition, employee surveys, collaborative goal planning and alignment, and continuous feedback tools.

ClearCompany was built with expert advice and best practices in mind, and it integrates seamlessly with our full-platform Talent Management System.

With ClearCompany Performance Management software, you can:

  • Get started with review cycles instantly using our robust library of performance review templates and best practices guides curated by experts.
  • Customize your own performance reviews, choosing from a variety of formats and rating scales that suit your organization's unique needs.
  • Streamline the review process with automated reminders and notifications, ensuring that review cycles stay on schedule and taking these tasks off your HR department’s already full plates.
  • Establish and monitor weighted employee goals that align with your business objectives, enabling clear performance expectations and tracking progress effectively.
  • Foster collaboration and engagement by scheduling one-on-one meetings, providing ample coaching opportunities, and promoting open communication between managers and employees.
  • Create comprehensive performance records by documenting private and shared notes, capturing meeting action items, and updating goals to maintain a complete performance history.
  • Boost employee sentiment and engagement through surveys, Shout Outs, and Celebrations, creating an inclusive and motivating work environment.
  • Utilize performance and engagement data analysis to measure and evaluate employee performance, identify trends, pinpoint areas for improvement, and recognize top performers.
  • Gain valuable insights into the factors that drive high engagement and exceptional performance within your organization, allowing you to enhance your overall employee experience.

2. TalentLMS

TalentLMS is employee learning software specifically designed for remote teams. Users can create their own courses for onboarding, compliance, sales, and more to help their employees grow. TalentLMS boasts fast implementation timelines and a mobile- and user-friendly interface.

3. Officevibe

Officevibe is employee experience software that offers tools for performance management and employee engagement. Its performance reviews pull in past recognition and goals data to inform the conversation.

4. THREADS Culture

THREADS Culture allows users to measure employees’ performance against business values and discover which employees add to company culture and which ones detract.

5. Monday.com

Monday.com isn’t just a task management system — you can also use it to manage your employee reviews. You can also create workflows to manage and track employee performance and development. HR, managers, and employees can privately communicate within the platform.

How to implement performance review software

Once you’ve chosen a top software vendor, you can start the process of adopting a solution to handle performance reviews. Any new business software comes with a learning curve, but there are lots of ways to make it easier for your team. Here’s what to do for a successful software implementation:

  1. Make your team aware that you’re looking for new software, and ask for their input on wants and needs.
  2. Determine the date by which you need to have the software fully implemented so you can choose the right vendor.
  3. Purchase the best review software for your business.
  4. Create an implementation plan to keep everyone on the same page.
  5. Train all employees who will be using the software.
  6. Outline a plan for what to do when software updates and upgrades require further training, ensuring you get the most from your investment.
  7. Make the switch!
  8. Follow up with employees to see if they’re learning the software and get their feedback on how it works.

Choose the Best Performance Review Software for Your Business

Performance review software is a powerful tool to add to your HR team’s repertoire. It helps them save valuable time, gain unprecedented insight, and deliver an engagement-boosting, employee-first strategy. It provides the best practices, tools, and advice that help your employees grow while offering deeper insights you can’t get from traditional reviews.

If you’re a company with goals for growth that wants thriving employees and an empowered HR team, you need performance review software like ClearCompany. Discover how our software can revolutionize your approach to employee performance evaluations, fostering a culture of continuous improvement and propelling your organization toward excellence.

In addition to our award-winning suite of features, with ClearCompany, you get:

  • Fast, guided implementation
  • Stellar customer support
  • Regular product updates and feature releases
  • A collaborative relationship with your software provider

Get a demo of ClearCompany Performance Management with one of our experts today.

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