5 Signs It's Time to Get Performance Management Software

How do you know when it’s time to upgrade your performance management system?

Growing companies often hit a point at which old processes break down. Even stable companies with little headcount growth may hit a point at which processes become outdated.  

Here are 5 signs your company might need performance management software:

1. Significant Headcount Growth
2. New HR Leadership 
3. Turnover Rate Creeping Up
4. Negative Reviews on Glassdoor
5. Company Isn’t Hitting Key Organizational Metrics

If you recognize any of these telltale signs, it’s time to bring in software that can improve your processes and keep your employees engaged.

‍

Can you identify why performance management is necessary?

Performance management is a cornerstone of organizational success. It serves as the roadmap, guiding both the employees and the organization towards achieving mutually beneficial goals. By clearly defining expectations and ensuring alignment between individual objectives and organizational goals, performance management plays a pivotal role in the success of companies.

One of the critical roles of performance management is its capacity to foster employee engagement and motivation. A well-structured performance management system provides employees with clear objectives and feedback, leading to a sense of purpose and clearer understanding of their role within the company. This, in turn, boosts employee morale and encourages them to invest their best efforts in their tasks, knowing that their work contributes to the overall success of the organization.

Moreover, incorporating consistent and necessary feedback mechanisms within the performance management process helps in identifying areas of improvement and facilitating growth. Feedback is the lifeblood of performance improvement. When employees receive regular and constructive feedback, they have the opportunity to adjust their performance and develop new skills in real-time, leading to improved efficiency and effectiveness.

Lastly, the importance of performance management is not just in human capital enhancement but is also a strategic tool for reducing turnover rates and increasing organizational success. When employees feel valued and understood within a company, they are less likely to seek opportunities elsewhere, stabilizing the workforce and promoting a thriving organizational culture. Implementing a robust performance management process through tools like PerformYard ensures that these benefits are structured and scalable for companies of any size.

What does poor performance management look like?

Poor performance management systems often act as a bottleneck within an organization's workflow. One of the primary indicators of such inefficiency is the excessive time and resources these systems demand from HR management. When managers spend more time on cumbersome processes instead of focusing on strategic objectives, it undermines the entire purpose of fostering productivity and growth. Often, tasks related to performance evaluations are fragmented across cumbersome spreadsheets or disparate documents, making it nearly impossible to maintain consistency across employee reviews.

Another sign of a poorly managed system is infrequent and ineffective feedback. Without a consistent and timely feedback mechanism, employees may feel left in the dark about their performance metrics. This lack of feedback doesn't just hinder their potential growth; it also leads to employee dissatisfaction. Employees crave clear communication about their contributions and areas for improvement. When reviews are vague or fail to align with departmental goals and the company's mission, employees can become disengaged and demotivated.

Furthermore, a deficient performance management framework can lead to reduced productivity and increased turnover rates. Insufficient systems often result in employees feeling undervalued, which can cause them to seek employment elsewhere where they feel more appreciated and understood. Organizations demonstrating such inefficiencies are at risk of losing talent, draining resources meant for continuous development and onboarding.

At its core, a reliable performance management software like PerformYard can address these inefficiencies. By streamlining feedback mechanisms and aligning evaluations with strategic goals, PerformYard empowers HR to instill both clarity and consistency within performance management processes. If these challenges sound familiar, shifting to a robust and adaptable software solution is crucial in redefining your organization's approach to employee reviews.

When should performance management be done?

When it comes to performance management, timing is critical. An effective performance management process doesn't wait for a convenient time to conduct reviews; instead, it is planned, structured, and executed regularly to align with organizational and employee needs.

Regular and Structured Review Cycles

For many organizations, the question isn't if they should conduct performance reviews but when. Historically, annual or biannual reviews were the norm, but these can often fail to keep pace with the fast-moving dynamics of modern business. Regular and structured review cycles, whether quarterly or even monthly, can prevent issues from going unchecked and ensure objectives are continuously aligned with company goals. Setting up predefined intervals helps maintain consistency and reliability in assessments.

The Role of Continuous Feedback

The modern landscape of performance management increasingly favors continuous feedback as opposed to exclusive reliance on formal reviews. Continuous feedback entails frequent, smaller interactions that facilitate ongoing communication between employees and managers. It encourages a proactive approach to address potential challenges and opportunities, fostering an environment where both parties can reflect, adjust, and improve in real-time. This ongoing dialogue is vital to keep employees engaged and on track.

Impact on Achieving Organizational Metrics

Conducting performance management at well-timed intervals can significantly influence the achievement of organizational metrics. Timely reviews and feedback directly impact how quickly and effectively teams and individuals can adjust their strategies to improve performance. When performance management is strategically timed, it not only supports employee growth and development but also drives the organization toward its broader strategic objectives.

Streamline your review process with PerformYard's comprehensive solution. Our customizable software allows you to integrate regular review cycles with continuous feedback seamlessly, ensuring that your performance management system is timely and effective. Discover why over 2,500 HR professionals trust PerformYard to deliver results. Schedule a demo today!

Signs You Need Performance Management Software

‍

1. The Company Has Grown Significantly in Headcount

Growing a company comes with challenges.

One of the many challenges is keeping control over your performance review process.

Manually sending out emails isn’t so bad when you have five or ten employees. But, by the time you grow to 20, 40, and more, the task becomes too labor intensive.

Keeping everyone on the same page becomes more difficult too. It’s easy for managers and teams to get sidetracked from the core mission of the company as it grows. If that happens, reviews won’t address the most vital aspects of performance.

Software can streamline the process, whether you have 10 employees, 100 employees, or 1,000 employees. Tools like PerformYard ensure all reviews include some of the same important goals, and it ensures HR can manage the process in addition to their regular workload.

2. New HR Leadership Just Joined the Team

You can rethink your performance management process at any time, but one of the best times to get down to business is when a new person joins the HR team.

What experiences do they have with performance management? What do they think works well, and what do they think doesn’t work? What systems and software have they used in the past?

They may have ideas and software recommendations you have never considered before. These tools can help you create the ideal performance management process for your company.

3. The Company Isn’t Hitting Its Key Organizational Metrics

If your employees aren’t hitting their personal goals, it’s clear that organizational goals aren’t being met either. But, what if your employees are hitting their goals, and yet, organizational goals are still falling by the wayside?

It means your company has an alignment problem. The goals that managers and employees think are important don’t match up with the bigger goals of the company.

Getting to the root of the problem can be hard—unless you have software that’s up to the task.

A software dashboard can display organizational and employee goals side-by-side. When you see them laid out this way, it’s much easier to make sure they are properly aligned.

‍

Employees can access the dashboard as well. That way they know which goals they should be working towards, and exactly how meeting those goals will positively impact the company.

4. The Company’s Turnover Rate Is Creeping Up

Why do employees start looking for another job?

Pay and benefits impact an employee's decision to leave, but so does engagement.

Employees that are highly engaged with their work are 87% less likely to leave.

Plain old boredom has an impact too.

One in every three employees who quit their job does so because of boredom.

So, how do you know if your employees are engaged? If they’re bored? If they don’t think they are being compensated fairly?

You have to have a performance management process that catches these issues so you can address them before an employee decides to leave.

The way to do it is through an intuitive software program.

It shows employees how they can improve so they can move up. It tracks employee satisfaction as a whole so management can address any issues. Finally, software gives employees the floor. They can voice their concerns instead of bottling them up until they start looking for a new job.

5. The Company Has Negative Reviews on Glassdoor

People don’t just use reviews to decide if they should buy a new blender on Amazon.

They are looking at company reviews on Glassdoor before they even apply for a job.

With good reviews, you can attract top talent. With bad reviews…well…you won’t.

There's a bigger issue at play though. Each one-star improvement in a company's score on Glassdoor translates to at least a 1.3-point increase in customer satisfaction.

Negative reviews on Glassdoor affect who applies to work for your company and customer satisfaction. They’re a reflection of an unhappy workforce. 

You should pay extra attention to reviews that make it seem like your company offers few opportunities for upward mobility. You should also pay attention to reviews that mention your lack of a strong performance management process. Fixing this issue with an effective performance management program is vital to the success of your business.