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Employee Engagement Performance Reviews Performance Management

What Makes a Good Performance Management System for HR?

July 26, 2022
8 min read

Performance Management, Supercharged


Technology has quickly become a necessity for handling every function of HR, including performance management. Although human resources technology hasn’t always been what you’d describe as cutting-edge, that’s quickly changing — it’s expected to be a $35 billion industry by 2028. 82% of HR leaders say they’ve upgraded their tech stack since the pandemic to keep up with the competitive talent market. 

If you’re part of the majority of HR professionals upgrading your team’s software tools, consider adding performance management software to the toolkit. Learn what to look for to find a technology solution that can evaluate, engage, and retain your employees and streamline performance management processes for your HR team. 

But first, find out how performance management has changed post-2020.

Did you know that 82% of HR leaders have upgraded their #HRTechnology recently? Join them with a top-notch #performancemanagement system — here’s what to look for:

Performance Management Has Changed in 2022

You’re not alone if performance management strategy makes you shudder — 95% of managers are dissatisfied with their company’s review process. 22% of employees have even cried because of a performance appraisal. And of course, it’s extremely time-consuming for HR teams to create and send reviews, along with reminding employees to fill them out. 

It’s not surprising that amid the increased stress, burnout, and turnover of the pandemic, performance management changed.  Companies canceled performance reviews or gave perfect scores to every employee. Managers began checking in with their suddenly-remote employees more frequently and adjusted goals to accommodate the uncertainty.  

Turns out, the increased communication and dynamic goals are far more popular than traditional processes. Employees want lots more feedback, and frequent check-ins help build engagement and trust. Now in 2022, performance management trends are solidly employee-first, with a strong emphasis on continuous feedback, employee development opportunities, and overall engagement.  

But, how can you find a performance management system that can reliably support a high-touch process? Find out the features you should look for in a HR performance management system.

“It's time to burn the boats, leave old performance practices behind, and create a performance management strategy that is adaptive, responsive and calibrated to the new workplace.”

(via Gallup)

What You’ll Find in an Effective Performance Management System

There are many types of performance management systems built for companies of all sizes in a variety of industries — but the top software solutions have a few things in common. 

The best HR performance management systems have both a suite of tools your team can start using right away and the ability to accommodate future growth and changing demands. Your team should be able to both perform daily tasks and do strategic planning with the system. Above all, it should enable your team to continuously streamline, monitor, and improve performance management processes.

Let’s dig into the features and traits that good performance management systems share.

Manage A Variety of Performance Review Types

Only 13% of employees would say that annual performance reviews are useful — probably because that’s the only time they get feedback on how they’re doing.  A vast majority of employees want to get performance feedback more often so they can apply it to the work they’re doing and start producing better results right away. Employees are usually only reviewed by their direct manager, even though peer feedback can increase productivity by up to 14 percent.

Give your employees frequent, regular feedback and add peer reviews into the mix with a system that supports more than just annual reviews. A good performance management system will make it easy for your HR team to run useful, engaging reviews:

  • New Hire Reviews
  • Annual, Bi-Annual, and Quarterly Performance Reviews
  • Competency and Roles-Based Reviews
  • Time-Based Reviews
  • Peer and 360-Degree Reviews

Download ClearCompany’s 5 expert-built performance review templates to start having more productive performance conversations. 

Track Review Cycles and Automate Reminders

An important part of building a performance management framework that works is establishing a review cadence — and sticking to it. But historically, that’s meant HR teams have to spend hours tracking down incomplete reviews, sending reminders, and then doing it all over again for the next cycle. 

Automate these tedious tasks with a performance management system. With a dashboard to check review completion in real-time and automatic notifications to remind managers and employees to wrap up reviews, HR can regain valuable time in their day.

Support Goal Creation and Monitoring

Goals are one of the best ways to engage employees — they provide clarity, and motivation, set performance expectations, and set benchmarks for success. People are inclined to work harder toward difficult goals, and you can rest assured that employees who consistently meet their goals are A Players. When individual goals are aligned with company goals, employees feel more connected to their work and company wins.

That’s why you want to look for a performance management system with goal-setting tools. Your system should give employees and managers the ability to:

A great #PerformanceManagement system will have tools that benefit #HR and employees, like #goalsetting and tracking features:

Send Employee Engagement and Pulse Surveys

Employee engagement and performance management are closely related, and as a result, engagement tactics can do double duty as performance boosters. An example of this phenomenon is the employee survey. Asking for feedback is an engagement strategy on its own — employees are 4.6x more empowered to do their best work if they feel their voices are heard.

A good performance management system for HR can send several types of surveys to learn about how employees are feeling or get their opinions:

  • Employee Engagement
  • e-NPS
  • Onboarding
  • Diversity, Equity & Inclusion
  • Emotional Wellbeing
  • Quality of Hire
  • Quality of Recruiting and Onboarding

Responses to engagement and pulse surveys can reveal new knowledge, identify pain points, and help you find ways to create better processes and improve company culture. 

Find out what employees really think of recruiting and onboarding at your company: download the employee survey templates.

Tie Recognition to Performance

Motivate your employees by showing your appreciation for their contributions and achievements. Performance management statistics show that recognition is an extremely effective way to promote retention and show employees that they’re valued. In fact, it’s their preferred method of encouragement: 37% of employees say personal recognition is their top motivator. 

Performance management systems with built-in recognition tools help execute this strategy with ease:

  • Send Shout Outs that appear on employees’ performance reviews and in a company feed where their peers can add their voices to the encouragement. 
  • Announce employees’ big days, including birthdays and milestones, so everyone can celebrate. 

Evaluate Performance Data with HR Analytics

The best performance management software can generate stories with your people data — custom dashboards and detailed reports that reveal patterns, pain points, and insights. With your new knowledge, you can learn if performance management strategies are effective and make data-informed decisions about where they could be improved. 

Analyze performance data to find important answers including:

  • Are managers correctly applying your company’s performance rating scale?
  • How do peer and manager feedback compare?
  • Who are the standout high performers at your organization?

Collaboration and Support from Software Provider

When you’re looking for performance management technology, remember to consider more than just what the software can do right now — ideally, you’ll use the same system for years to come, and software isn’t static. It gets regular updates and feature additions, you’ll hire new employees who need to learn how to use the system, and you may even have ideas to improve the software. 

You need a performance management system provider that’s there to answer your questions and help you get the most from the technology — and that’s open to hearing your suggestions. Top providers are there when their clients need troubleshooting, training, or an idea to share, and they view you as a collaborative partner rather than a pesky customer. Does your performance management system need an upgrade? Take the quiz to find out!There you have it: a great performance management system is made up of a robust set of features that engage employees and improve their performance while helping HR work more efficiently. The software is updated regularly and backed by outstanding customer support, and client suggestions are often integrated into feature updates. 

ClearCompany’s Performance Management Platform fits the bill: it’s designed to help you evaluate performance regularly, conduct useful performance reviews, motivate your A Players, and retain them long-term. Not to mention, our Customer Success team earns rave reviews from our clients for their rapid response time and problem-solving skills.

Sound too good to be true? It’s not! You can partner with a proven, award-winning performance management system — see how when you sign up for a demo of ClearCompany’s Performance Management Platform

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