10 Key Performance Management Software Features, Traits

10 Key Performance Management Software Features

Employees are the most important part of any company. It is for this reason that the management of employee performance and development is essential to long-term growth. As a manager it is often difficult to find the time to stay up-to-date with KPIs, goals, and individual performance reviews. Software solutions for performance management can keep employees on the right track. These solutions not only streamline your processes but also manage and automate your reviews.

The employee performance review has never been more important. It is unfortunately more difficult. Even in tough times, software can optimize and streamline the performance review process to make it more effective and efficient.

Employers and employees work together to evaluate the performance of a particular employee. This is a great way for managers to assess how well employees perform and to determine how they can contribute more to the company.

Performance management must be a continuous process. You don’t only hold a performance review every year. You constantly look at things, assess goals, and so on. Is a system that helps you to manage employee performance? It’s important that your system has the features you need to get the best out of it.

What is Performance Management Software?

A performance management tool is an easy-to-use tool that allows companies to better manage and understand the performance of employees. It allows HR departments to set goals for individuals and teams that align with the values and aims of the company. Employees are motivated by the strategic development and growth of their skills.

A good employee management software system allows human resource managers to track and evaluate employees’ performance in relation to established KPIs, and provide them with the relevant training and guidance. The solutions include features such as tracking and monitoring reviews, reporting and goal setting. They also provide real-time feedback and reward for improved performance.

The general consensus is that traditional performance review systems are outdated. Good business performance management solutions help HR departments communicate and create clear performance goals to departments and employees. This system ensures that employees know what’s expected of them.

The Main Characteristics of Effective Performance Management

A performance management system that is effective will include several key features, such as performance expectations, appraisals and disciplinary policies. It may also include recommendations. It encourages managers to identify, track and improve employees’ performance. For the best results from the best HR Performance Management Software, companies must align the software to their fundamental corporate goals, culture, and values.

You should invest in a performance-management system if you do not already have one. Switching to digital will streamline your work if your HR team is spending a lot time on performance appraisals and you are still using manual processes that rely on Excel spreadsheets. The tools that measure employee performance can also be used to understand why your staff is leaving or why KPIs and goals are not being met.

What is the best solution for performance management?

  • 360-degree reviews with feedback from peers, managers and direct reports provide a complete view of an employee’s performance.
  • Organisational tools that simplify performance management
  • Individual development planning processes for employee performance management
  • Training. Training can be designed using the data obtained from appraisals to meet the needs of each individual employee.
  • Career development tools to plan and execute regular appraisals, which measure team performance and identify strengths and weakness and provide feedback on employee career development.
  • Data analysis. Regular reporting helps managers to determine organizational goals, and allocate bonuses and promotions.
  • Talent management. Motivating and rewarding employees who consistently meet goals.
  • Communication between team members and managers

Three Types of Organizational Performance Management Systems

The term organizational performance management, also known as corporate performance management, is used to describe methodologies and processes which help you define your strategy, measure it, and finally achieve it. 

The Balanced Scorecard

The Balanced Scorecard is, in our humble opinion one of the most effective performance management tools available.

The main components are:

  • Objectives: High-level organizational goals that describe what your organization aims to achieve strategically, divided into the four perspectives
  • Measures: Key Performance Indicators (KPIs), which help you determine if your strategic goals are being met.
  • Initiatives: Key Action Programs developed to achieve your goals, also referred to by the term projects.

The BSC is a key component of the BSC.

  • You can also link the departmental goals to the organization’s overall objectives. You can also see the connections between measures and projects, as well as organization-level measurements.
  • A structured reporting process is required. It is important to review your strategy regularly in order to create a BSC. This can only be done if you have a well-organized strategy.

Management by Objectives

Management by Objectives, a management philosophy created by Peter Drucker and his influential consulting firm, has many variants. It is based on creating (between two and six) organizational goals, which then serve as a guide for setting individual employee objectives.

Its key features include:

  • The objectives are not always linked. This is not the BSC method, which aligns objectives within a strategy.
  • As part of a collaborative initiative between leaders and their employees, objectives can be defined. Employee participation is meant to create buy-in and help clarify the path towards achieving the objectives.
  • MBO is primarily focused on the objectives; it places less importance on how they will be achieved. Most organizations rely either on measures or projects, but rarely both. To make MBO successful, you need to have a structure which clearly distinguishes between measures and projects. The two don’t operate in the same manner, so combining them will lead to confusion.

Management by Objectives is a term that has been used for a long time, but it’s not always found in strategy documents. This approach can be recognized by looking at a strategic plan that may have goals and objectives. The organization will then list the activities and actions it is grouping to achieve its goals and objectives.

Budget-Driven Plans for Businesses

Sometimes the budget is the one that drives the performance management program, rather than the strategy. In this situation, “workplans” are linked to an organization’s overall budget, and the spending is allocated to projects and programs which deliver results. 

Its key features include:

  • Income sources and expenditures (line items), can be grouped by categories to help leaders identify areas where they need to downsize or invest.
  • This may include a mix of existing and new projects.
  • Finance is the driving force, unlike other approaches which are organized by strategy departments.

Personnel Performance Management Systems Categorized

Personnel performance management systems, also known as human resource performance management (HRPM), provide a framework to evaluate the performance of employees and link and align those levels of performance with the strategy of divisions, departments and the enterprise. Two types of performance management are available for employees: HR-driven review systems and Objectives and Key results (OKR).


OKR, currently the most popular framework for setting, tracking, and measuring progress towards goals, is an easy way to do so on a regular schedule. This is how it works:

  • The key results and objectives of each individual are tied to the organizational goals. OKRs will be set up in a hierarchy, starting with the employee. Then, the manager and then, the manager’s boss, etc. When employees reach their goals, the managers will also achieve theirs. Then, division chiefs and so on.
  • Reporting is usually done quarterly. Many normalize their reports on a scale from 0-1 to 100%. OKRs can be completed weekly or in other reports.
  • The weighting of key results for an individual can be rolled up and applied to the manager.
  • The strategy office may conduct reviews, or the OKRs could be decentralized.

With the right controls, you can get great results with OKR. The system also outlines the responsibilities of employees so that everyone is aware of their roles, has measurable goals and works quickly to achieve them.

HR Review-Driven Systems

A performance management system based on HR reviews is not an alternative to the OKR framework, but an additional method of evaluating individual performance. OKRs tend to be strategy-driven and focus on factors that will impact the achievement of an individual’s objectives. Sales department OKRs, for example, could include things like how many people an individual reached out to in order to schedule a demo.

Human resource review systems also consider aspects of performance that are not directly related to the objectives. For example, whether a person is developing a particular skill set or whether they fit well with their team. 

An HR-driven approach has some characteristics:

  • Reviewing is usually done annually or biannually.
  • The HR department is often in charge of reviewing the results, rather than a strategy office as with the OKR System.

Why is Performance Management Important to Business?

It’s important to manage performance because it is a crucial part of employee retention and development. Regular performance reviews help organizations retain their best talent and find opportunities for their employees to take on new responsibilities.

You can track key performance indicators (KPIs) to measure your employees’ progress. To measure your employees’ progress, you can use key performance indicators. You can use KPIs to measure the performance of your organization, or that of your employees.

You can use performance management if your metrics indicate that employees aren’t meeting expectations. It can be used to acknowledge employees’ achievements, no matter how big or small.

It is crucial to recognize your employees because they play a major role in their engagement. Employees who are engaged will be more likely to remain with your business.

Also Read:- Benefits Administration Software With 401(K) Tracking

How to Measure the Effectiveness of Performance Management

Performance management is constantly evolving. The need for businesses to manage employee performance effectively and reliably is universal. Here are five ways you can measure your performance management.

Performance Management Cohorts

A cohort is an informal group of people or organizations who share a similar goal or characteristic. Cohort sessions provide significant opportunities for collaboration, creativity and problem solving.

It could be beneficial to create a performance management plan with businesses that share similar goals. You can have regular meetings to discuss challenges, successful strategies and ambitious goals. Knowing what other companies are doing in terms of performance management is a good way to set a realistic benchmark.

Peer-to-Peer Reviews

Peer reviews are a way to get direct feedback from coworkers on the creation and implementation of performance management initiatives.

Peer evaluations can provide valuable insight from different perspectives. They also help to make it clear what the current performance level is, from the perspective of the relevant employees or stakeholders.

Self-Evaluation of Employees

Self-evaluation is a crucial tool for measuring performance. This practice involves the development of objective standards that can be used by an organization to measure its progress towards its performance goals.

Surveys, questionnaires and graded assessment are all forms of evaluation. Self-evaluations should provide a clear picture of the current state so that you can develop a strategy to improve performance and achieve your desired outcomes.

Scales and Ratings

Using a numerical rating, performance management specialists can assign a point value to each performance indicator. They can then prioritize the steps in performance planning. Create a rating scale from 1 to 5, with 5 representing high performance.

Checklist of Job Duties and Activities

Establishing a comprehensive and authoritative list will ensure accountability and effectiveness. By identifying which team members will be responsible for what tasks, you can improve the transparency of your management process. It helps team members to know what they are expected to do, and can help improve performance.

The 10 Most Important Performance Management Software

Here are 10 essential programs:


The velocity of your team is the amount of work they can accomplish in a sprint. A sprint is a period of time set aside for specific tasks to be completed.

There are many ways to measure speed. Story points are the most common measurement. They measure how much effort goes into creating a software.
In order to estimate story points, you must first evaluate the size and time required to build a software.

You will know the average team velocity in just three sprints. You can estimate the realistic goals of your team by using velocity.

Sprint Burndown

Sprint burndown measures the amount of work actually completed in a sprint.

Sprint burndown is not the same as velocity, which is an estimate based on averages.
When the software measurement does not match predictions, teams can adjust their performance by using sprint burndown.
The sprint burndown chart is a popular tool used by development teams to measure time and story points.

Release the Burndown

Release burndown is a metric that measures the progress of a release. This metric has a broader scope than sprint burndown. The metric can be useful for teams to manage the release of products.

A release burndown chart can be used by software development teams to determine if they are behind, ahead, or on time.

Businesses can show stakeholders hard data on when to expect a return after the release. You can also inform customers who are excited about early or delayed releases.

Release burndown charts are similar to sprint burndown chart. The x-axis is sprints, and the y axis is story points.

Cycle Time

The cycle time KPI is a measure of how long it takes to complete a task. Cycle time charts are used by development teams to measure the efficiency of software development processes.

Cycle time measurement can have many benefits. You have a metric to objectively measure the performance of your team.
This metric can be used to estimate how quickly your team will finish future tasks.

You can also spot inconsistencies in a workflow that is otherwise fast.

Cumulative Flow

Cumulative flow is a visual representation of the state in which your software tasks or tickets are at.
The diagram will show different colors to represent different stages, such as ‘Approved. “In Progress”, “Backlog” and more. The colors are organized in bands, with the width of each band corresponding to the cycle time.

A cumulative flow chart can be used to stabilize your workflow if or when you identify bottlenecks. The team is held accountable by the visual representation of data.

Flow Efficiency

The ratio of your active time to your total time is called Flow Efficiency.

Sometimes, work in progress is not really work in process but rather time that has stopped. Developers may have to wait before moving from one project or task to another.

Divide the total cycle time by the amount of time spent actively working.

To better understand the cause of low performance, you can compare it to specific time periods.

Code Coverage

Software development teams measure the quality of code by measuring Code Coverage.

This software metric is crucial for software development cycles that prioritize continuous software delivery and test driven development (TDD).

This metric, also known as test coverage or code execution, determines the amount of source code that is executed when your code is being tested.

If code does not execute for any reason, it is likely that there are bugs. Although you should not aim for 100% coverage of code, the more code coverage is better. The less you have to debug.

Code Stability

Code stability can be difficult to measure. Stable code is a software product with minimal changes that can potentially damage the business or the software.

Others decide to chart how often code is changed. Some developers think about stability by calculating the percentage of code that is deployed and results in downtime.

Code Simplicity

There are many metrics that you can use to evaluate code simplicity.

One way to measure cyclomatic complexity is the number of paths that your code has to take. A code with fewer paths is a positive sign.

In general, code that is simpler to maintain and test is easier.

Code Churn

Code churn is a measure for code stability, as indicates how frequently code changes with time.

Software systems that require frequent rewriting of code to accommodate new features are high-maintenance and therefore high-risk.

Performance Management Software: Top Features

The tools used to support performance management should be updated to reflect the changing needs of the market. Performance management software should have the following 10 features.

Instant & Anytime Feedback

Performance management is not a unidirectional process. The majority of employees leave their jobs because of their managers. Companies should encourage two-way feedback at any time.

Software for performance management can provide instant feedback at any time and maintain records to create a detailed picture over time. Managers only evaluate performance once or twice per year. This leaves out a lot of information.

Feedback is important to improve employee performance and engagement. Gallup’s research shows that employees who strongly agree they have received “meaningful” feedback in the last week are four times more engaged than their peers.

It is important that the software used for performance management allows employees to give or receive feedback at any time.

HR can provide templates for specific scenarios in which feedback can be sought or given. It also provides a framework for the types of feedback that may be exchanged.

Transparency is important, but honest feedback should also be a priority. So, anonymous feedback is also possible so that employees are free to speak up without fear.

Development Plan

Nearly half of all employees in 2022 said that they wanted to improve their skills, but didn’t know how to start. Managers might also not know how to assist an employee struggling with their job or wanting to improve. Employees can close performance gaps with the help of development planning.

The development plan should include the tools and steps that employees can use to achieve their goals. You might consider coaching or skill-practice. Managers and employees can determine the best path forward together, but they need a system to facilitate that process.

Your software for people management should allow you to create a plan of development so that managers and employees are able to address performance issues proactively and transform these challenges into opportunities for growth. It can not only boost employee engagement and morale, but also improve employee performance.

Vault for Performance Artifacts & Calibrating

The recency effect is a major flaw with annual performance reviews. Most managers fail to remember an employee’s accomplishments beyond the last few months.

Many companies find that performance reviews are inconsistent, inaccurate and unfair. It’s not surprising that many employees dislike performance reviews.

The use of performance artifacts to ensure objective reviews and align the methods used by managers for reviewing performance is a great way to make sure that they are all in line. The right tools make this process easier and more efficient.

You can eliminate the weaknesses that undermine employee confidence in the review process by using performance management software. Plus, more accurate data on performance allows leaders to make better decisions about who should be promoted or given a raise and who is underperforming.

A repository of performance artifacts should be a feature of any performance of IT management software. This is where managers and employees can store artifacts such as client feedback emails or peer recognition.

This vault eliminates the need for a Manager to remember all the things an employee did during the review period.

The ease of use must be a priority. A Manager, for example, can quickly take notes during a one-on-one with an employee on an app and upload it to the vault.

Configurable Appraisal Router Process

Most management teams find it essential to be able to customize the appraisal workflow. According to your organization’s roles, an appraisal could need to be approved by several people, such as the employee, supervisor and HR. You can have all the approval levels you need with a performance management system that is streamlined. It should also make it easy to send the appraisals to the right employees.

Goal Management

Both managers and employees should be able define personal or professional goals for a comprehensive development plan. The same goals and objectives for the future should appear on the next evaluation to make it easier to assess and follow up.

Personal goals are essential for employees to feel invested in the performance of their career and plan their success. When employees work toward goals, they contribute to a growth mindset in your organization.

Setting goals is something that many managers and employees are in agreement about. However, without tools to help manage the process it’s easy to put this idea aside. Setting goals is a difficult task.

Select a performance-management system that helps you set goals and allows managers to monitor progress. This will keep your employees accountable and motivate them. Managers and employees can achieve real progress with the right tool.

Simple and Dynamic Measurements

The days of the factory worker with a set job description are over. It’s only natural that KRAs will change over the course of a year in a matrix-based setup, where employees are expected to wear many hats and work with multiple managers.

Performance Management Software should allow employees and managers to update their job goals according to the role they are playing during the engagement.

The measurements should also be simple & clear. Goals should be able to record both quantitative and qualitative targets. Subjective KRAs, on the other hand can be measured by simple questions such as “What went well?” or “Areas of improvement”.

Social Recognition

Why should companies not use social media to boost employee morale and performance when Facebook & Twitter are as important as oxygen?

The wall will allow managers to recognize the achievements of their employees, and also receive comments from other employees. This encourages the employee to continue the good work.

Performance management software, if already part of an intranet company, should include APIs for sourcing such recognition.

Simple Scheduling and Recording of One on Ones

Managers should be able schedule regular one-on-1 meetings with employees, as the focus will be on feedback and personalization. These check-ins may be scheduled on a time basis or at the start or end of projects or important tasks.

Software for Performance Management should allow one-on one meetings to be scheduled once or repeatedly, with reminders set up ahead of time.

The recording of key points of the discussion can be used as a reference for future sessions. It can also be pushed into the vault, if needed.


Maintaining detailed, ongoing notes is essential for accurate employee appraisals. However, it can be a lot of paperwork. Performance management software allows employees and managers to keep track of goals and performance in between appraisal cycles. This simplifies the process and makes it more accurate.

Also Read:- Employee Insurance Policy Template Example For HR


A performance management system should be able to integrate with any payroll or HR software. Performance management software that is only compatible with a handful of HRMS systems does not provide a consistent user experience or easy deployment. If your payroll needs evolve, you will be unable to keep your existing performance management system.


It is clear that the majority of performance’s compensation management software on the market can transform your performance-management process. It may not be sufficient to choose a software solely based on its features. Before you commit your resources to a particular software, it’s important to determine if the software is right for your organization. You can make an informed decision about your software purchase by using the above factors.

These features are important, but they aren’t the only ones that can save you time. To make the appraisal process as efficient and effective as possible, look for software that includes all of these features. Contact us if your existing performance management software doesn’t meet your company needs. We can help you identify these needs and make your next appraisals the easiest yet!

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