How To Choose A Great Employee Performance Management System
post-template-default,single,single-post,postid-24627,single-format-standard,ajax_fade,page_not_loaded,,qode-title-hidden,hide_top_bar_on_mobile_header,qode-child-theme-ver-1.0.1,qode-theme-ver-10.1.2,wpb-js-composer js-comp-ver-7.2,vc_responsive
performance management system

How To Choose A Great Employee Performance Management System

The power of a modern Performance Management System comes from aligning technology, human resources and the company’s top C-suite executives in efforts to ensure that the system works as intended. Managers and staff in today’s corporate environments often dread annual performance reviews that can be subjective, demeaning, disregarded and excessively time-consuming. However, designing an effective competency framework positions any business as an agile, flexible operation where Baby Boomers, Millennials and Gen X and Y workers can count on their work being valued on output and performance instead of how their work is accomplished logistically. Annual reviews have given way to more frequent feedback and guidance for most companies that use a performance management system.

Research shows that the performance management process is expected to improve productivity by at least 25 percent. Using a competency framework for each skill and job position can increase productivity even more dramatically. Companies can get this kind of result when they create a sustainable organisation that values coaching and mentoring, rewards people for making progress in the performance management process, uses dynamic competency framework tools and monitors analytics with the latest tools and technology.

Designing the Right Competency Framework for a Performance Management System

Employees inevitably waste a certain amount of time on the job, but a well-designed performance management system can help channel energy into constructive pursuits, motivate workers to high levels of performance and encourage workers to develop new skills. Any performance management system needs support throughout your organisation if you hope to succeed. The following are essential elements for designing a competency framework for performance assessments and development:

  • Enlisting support from the company’s executive leadership
  • Designing the right infrastructure for planning, measurement and control
  • Developing HRIS technology and human resources to attract, hire, develop and compensate top talent
  • Engineering workplace conditions to support manager-driven development, collaborative work processes, competency framework development and team efforts


 Strategic Company Goal Alignment

Essential design efforts for achieving strategic company goals depend heavily on the performance measurement strategy and your company’s procedures for capturing, storing, processing and disseminating data and performance information to users. Your performance management system needs to measure the right key performance indicators, or KPIs, to build an effective reporting system that aligns with company goals.

Incorporating Competencies, Skills, Values, Behaviours…or Anything

A competency framework can help to guide strategic planning by linking employee performance to greater long-term company goals. Defining essential competencies across various departments and job descriptions helps to ensure that your people develop the essential skills and expertise your work demands. You can recruit staff, cross-train them and evaluate their performances more effectively. A competency framework provides the criteria for identifying skills and competency gaps, planning for succession and handling change management more competently.

HRIS Flexibility for Agile Performance Management Processes

You need a responsive and flexible system to handle today’s agile development processes and the preferred value-added performance strategies of younger workers. Your system should include the following elements:

  • Easy methods for setting, changing and updating company goals
  • Integrated technology tools for monitoring the performance management process
  • Regular ratings and feedback instead of offering only semi-annual or annual assessments
  • Inbuilt HRIS systems for encouraging employee development
  • Using the HRIS system to reward, incentivise and compensate employees for extraordinary levels of performance
  • Crafting short sprints and using stakeholder feedback to enhance agility
  • Connecting the performance management process with other processes for talent management


Build Your Own Forms

You can use your performance management system and HRIS software to design your own forms for performance assessments. Designing your own forms allow you to customise job descriptions, assess both soft and hard skills, align jobs with current business trends and corporate strategy and set more effective goals.

Establish Your Own Rating System

Depending on your business, industry and company goals, it can be a tremendous advantage to establish your own rating system. After all, your business is unique, and you want your performance management system to identify high performers, find people to promote and align job performances with company goals. A rating-less system might work better for your company, or you might prefer a numerical system of ratings averaged from multiple manager and supervisor and stakeholder assessments.

Design Custom Workflows

The right performance management system enables your HRIS team to design powerful workflows and flexible task templates that can automate any business process or employee development strategy. You can control status, approvals, evolving business rules and time-based and event-based notifications. Customisable workflows can be used for self-appraisals, peer-to-peer ratings, customer and stakeholder input and assigning different factor sets to each department, job type, demographic group or other work-based distinction.

Powerful workflow functionality, customizable business rules, and flexible task templates work together to automate and manage any business process. You can automate follow-ups, simplify answering performance-based questions, streamline record-keeping and track core competencies for each job position and succession management project.

Cascading Goals

Cascading goals complicate performance appraisals due to overlapping accountabilities, redundancies and conflicting work projects. It’s critical for your employees to understand the nature of cascading company goals and how the process affects performance across the board. Each worker should understand how his or her performance relates to company goals and how team performance affects decision-making, goal-setting and business priorities. An advanced performance management system enables HRIS staff to adopt goals at different levels within a given company to align multi departmental objectives, employee activities, recruiting efforts, development strategy and other key business activities.

Value of Regular Check-Ins and Feedback

Today’s agile worker no longer benefits as much from a formal performance management process or annual review. Most employees respond better to direct, ongoing feedback from their managers. That doesn’t mean long-winded speeches or formal reviews – a quick conversation over a cup of coffee can prove immensely valuable. Statistics show that employees who receive regular feedback have 14.9 percent lower turnover rates that those who don’t get regular performance advice. Employees are twice as likely to become disengaged when they get almost no performance feedback.

The Conversation

The conversation is critical in the performance management process. Many workers feel that their managers aren’t genuinely interested in them, and people can easily detect when managers are just going through the motions. That’s why it’s critical to show empathy, learn about your team members holistically, know what each person is doing and craft development plans that genuinely try to improve performance. Providing ongoing feedback in real-time (and using automated alerts and reports to stay on top of performance issues) is a great way to show genuine interest in each team member.

Crowdsourced Feedback on the Performance Management Process

Today’s technological advances can transform the performance review process into a dynamic, collaborative effort involving multiple stakeholders. Crowdsourced feedback in employee performance appraisal has become an increasingly popular way to generate holistic performance reviews. These assessments can incorporate social media technologies, independent reviews, peer-to-peer assessments and interoffice ratings from stakeholders in different departments and branch offices.

Customers can provide deep insights into employee performance, and companies increasingly depend on what their business associates, stakeholders, suppliers and customers think about their customer service, job performance, ethics and other issues. That’s why incorporating crowdsourced feedback into performance reviews can be so useful to businesses.

Organising an Integrated and Holistic HCM System

Human capital management describes your company’s overall approach to managing its most critical asset: people. Best practices for managing your HCM system include using strategic, technological and human resources in an integrated HRIS system. The more information you have, the better HCM decisions will be. Your performance management system is the ideal platform for managing, monitoring and developing critical employee resources. Integrating HR, talent pools, development strategies, succession planning, HRIS systems and HCM strategies helps to ensure that your organisation has the right people, places, systems and data to manage all your company’s business goals.

Employee Position Descriptions

Organising well-researched, accurate and descriptive intelligence for job descriptions can eliminate misconceptions, motivate employees to strive for advancement and prevent unqualified candidates from pursuing jobs for which they just aren’t currently qualified.

Employee Development Plans

An effective and dynamic performance management system includes individual, team, departmental and companywide development plans. These include earning certification, cross-training in new skills, learning from coaches or mentors, pursuing educational opportunities and working in other departments to broaden business skills. Leaders are often trained and nurtured by assigning them additional responsibilities and special projects. Plans can be developed to improve skills to minimal competency levels, to develop professional skills, to become qualified for succession to key company positions, to pilot new initiatives and projects and even to develop interpersonal skills.

Employee Recognition Module

One of the key benefits of an advanced performance management system is that you can use the platform to tailor your process with OKRs, KPIs and other criteria. An employee recognition module can use information from diverse sources to provide critical information about employee work activities, customer feedback, performance measurements of individual, group and team efforts. You can provide your managers with real-time feedback, automated data collection, targeted performance assessments, stakeholder reviews and other critical information so that each manager can recognise, reward or discipline staff based on objective data.

Recruitment Strategy

Your performance management software can make the difference between an engaged staff and disengaged and unhappy workers. Your staff is your most important recruiting tool and best source for job referrals. Listening to your employees, making them feel valued and engaging them with the company’s culture provide invaluable insights into the recruitment process. Research shows that more than 50 percent of new recruits will leave a given company within two years. About 88 percent of these cases involves reasons other than compensation, so it’s useful to use your performance management system to monitor employees and their reasons for job dissatisfaction. Common reasons for job dissatisfaction include:

  • Mismatching people with the wrong jobs
  • Providing too little feedback and/or coaching
  • Becoming too stressed from demanding work expectations
  • Discovering that the job wasn’t what the worker expected
  • Developing disenchantment with managers or supervisors
  • Feeling undervalued
  • Job Safety



Although remuneration is seldom the primary driver for job turnover, it is important – especially if employees feel unappreciated or undervalued. One of the primary benefits of a strong performance management process is the ability to automate pay raises, simplify requesting a raise and earning rewards and bonuses based on job performance.

Engineering a Social Performance Management System

Today’s employees almost never work in isolation. Even scientists working on top-secret technology stay on top of social trends in their industry and share noncritical information through social platforms. In today’s global markets, company employees often work in different time zones, countries and continents. Peer-to-peer networks share information through social media such as LinkedIn, Facebook, Twitter, Google + and many others.

Making your performance management process more social and accessible generates many benefits for business. You can get 360-degree profiles of employees, find out what community interests your workers support, get data from customers, third-party business associates and independent intelligence sources and monitor reviews, online reputations and other critical performance benchmarks.

Some managers and employees will always greet the performance management process and HRIS tools with the enthusiasm that patients have for getting root canal work. Traditional approaches and formal performance reviews are giving way to ongoing feedback, crowdsourced information, social information and frequent, genuine conversations about ongoing performance issues. Setting annual goals has given way to agile approaches that make incremental gains. Matrixed management is increasingly across business environments where employees might deal with multiple managers, cascading business goals and flexible development opportunities. Your performance management system can get the most out of the process when you have integrated technology, executive support and manager commitment to the performance management system and strategic HRIS processes.

Ari Kopoulos

CEO at EmployeeConnect