What to Look For in Your Next-Generation Performance Management System

performance management systemIf your performance management system isn’t having a positive impact, you’re not alone. More than half of respondents to a recent McKinsey survey said their performance management efforts have not had a positive effect on performance.

But it’s not all bad news.

The same survey showed that when executed well, performance management has a positive impact on employee performance and the organization’s overall performance.


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However, getting to a system like this isn’t easy, and that old paper and pen process won’t get you where you need to be. You need tech that supports, enables, and empowers your efforts. And not all performance management software is created equal.

Look for a platform that helps you:

  • Set, track, and collaborate on goals
  • Facilitate peer-to-peer, real-time employee recognition
  • Collect and share immediate and continuous feedback
  • Drive meaningful one-on-one meetings
  • Track vital talent metrics
  • Coach employees for ongoing development


In this article, we’ll cover each of these components and how tech can amplify your impact.


1. Set, track, and collaborate on goals.


Why it matters: Goals help organizations achieve more, faster, with less.

Goals should be clear, aligned and shared. Clear goals guide employees to focus on the right priorities and keep their work aligned with organizational strategy. This ensures accountability across the company, motivation to propel the business forward, and strategic alignment at every level.


How tech can help

Make sure you have the tools you need to help your teams set and track goals. Organizational goals should be driving team goals, and team goals should be driving individual goals.

Your performance management software should promote transparency, alignment, and collaboration across the organization. 

Look for features such as:

  • Real-time goal-setting so managers can recognize barriers early and stay on top of team progress
  • Visibility on company goals so employees can put their work and priorities in context
  • One-stop dashboard for clear insights into team culture and performance
  • In-tool tips and reminders to keep employee goals top-of-mind and coach teams on best practices


2. Facilitate peer-to-peer, real-time employee recognition.


Why it matters: Recognition encourages employees to perform their best.

Employee recognition should be motivating, public, and reinforce your organization's values. One study found that 69% of employees would work harder if they felt their efforts were better recognized.

Openly acknowledging and praising employee behavior or achievements offers many benefits, such as increased productivity, increased engagement, decreased turnover, and improved company culture.


How tech can help

Only 37% of employees nationwide are satisfied with the way they receive recognition and appreciation at work. And a staggering 45% of workers have not been recognized in the last six months.

Recognition software can help you bridge the gap to celebrate, motivate, and engage teams across your organization.

Look for recognition software that:

  • Facilitates public, peer-to-peer recognition
  • Alerts managers in real-time when others have recognized their teams
  • Enables team bonding and peer recognition through a public recognition board
  • Allows anyone to share praise and post recognitions across the organization
  • Provides insight into broader performance by integrating recognition seamlessly into employee goals, one-on-ones, and feedback


3. Collect and share immediate and continuous feedback.


Why it matters: Feedback builds strong relationships to drive performance.

Great companies are built on trust, and trusting cultures are built on feedback. Our research shows that a strong feedback culture correlates with a highly engaged workplace.

Continuous feedback should be individualized, constructive, and unbiased. Regular feedback builds strong relationships by encouraging transparent dialogue and helps drive better performance through continual improvement.


How tech can help

Too many organizations aren’t providing enough feedback. In fact, 71% of employees prefer immediate feedback, even if it’s negative. The right software can make sure your teams are getting the feedback they need to succeed.

Choose a feedback tool that helps you create a feedback culture across the organization.

Look for software that lets you: 

  • Collect ongoing 360, peer-to-peer, and upward feedback
  • Request or give feedback anytime, anywhere
  • Coach employees on feedback best practices to improve the feedback loop
  • Automate feedback cycles and set reminders to ensure no one falls through the cracks


4. Drive meaningful one-on-one meetings.


Why it matters: One-on-ones help organizations get a more complete picture of performance.

One-on-ones should be frequent, collaborative, and documented. From check-in meetings to formal performance reviews, one-on-ones might be the most important part of your performance management platform. When managers effectively coach and develop their employees, 74% say their performance management systems are effective.


How tech can help

With so many moving parts, it can feel daunting to try to capture the right information, document it, and create an action plan for every single employee, every time.

Your performance management software should empower managers to have regular and effective performance conversations.

Performance reviews should be future-focused, transparent, and two-way. Look for one-on-one software that can help you prepare for and follow-up on meetings with features such as:

  • Best practice templates 
  • The ability to capture private notes
  • A shared agenda builder so employees can collaborate on their performance conversations and check-ins

Plus, having access to past meetings, employee goals, feedback, and data from your HRIS or other performance features allows you to get a full picture of employee performance and help managers better coach their team.


5. Track vital talent metrics.


Why it matters: Talent reviews allow leaders to develop and retain top talent.

Talent reviews should be frequent, unbiased, and rooted in data. Managers and leaders across the organization need to know who is doing the best work, who is ready for promotion, and who is at risk of leaving. Talent reviews allow leaders to track and evaluate performance, fill talent gaps, develop and retain top talent, and intervene before employees burn out or quit.


How tech can help

Talent decisions should be based on credible data that is easy to access, understand, and act upon. Performance management software can help you track talent metrics on an ongoing basis so you can make informed and strategic talent decisions.

Look for features that simplify the talent review process, such as:

  • Collaborative reviews that ensure transparency and consensus among leadership
  • Intuitive dashboards with shared insights across HR, managers, and leaders
  • Automated evaluations so you always have consistent, up-to-date information


6. Coach employees for ongoing development.


Why it matters: Learning and development leads to a stronger connection between the employee and their work.

Employees want to work at a company that invests in their long-term development and provides opportunities to grow. And the benefits of a strong employee development program are mutual. Employee learning and development should be prioritized, supported, and organization-wide. Successful employee learning and development leads to increased engagement, better employee performance, and happier, more motivated workers.

There are multiple ways to invest in employee development. But one of the most powerful tools is coaching.


How tech can help

In order for coaching to be effective, it needs to be integrated into your organizational culture. That’s where technology can make a big difference.

Use a performance management system to build coaching into the fabric of your company culture.

Look for features that help you: 

  • Provide feedback training to both coaches and employees
  • Communicate expectations clearly across teams
  • Document and refer to past performance conversations and data to power productive coaching sessions


Improving performance with an all-in-one performance management system


An all-in-one performance management system can take your performance management to the next level by integrating and amplifying your efforts across all areas of performance.

As you track and manage recognition, goals, feedback, one-on-ones, coaching and development, use technology to build off each segment and deliver seamless experiences.

For example: 

  • Managers can use recent recognition to fuel one on one conversations
  • Recognition can be given when employees hit their goals
  • Goal tracking can help leaders identify candidates for promotion


Implementing a next-generation performance management system calls for a new approach. It requires letting go of the traditional, top-down, annual approach in favor of one that’s modern, employee-centric, and continuous.



Keep these tips and features in mind as you evaluate performance software options. Get started today with a free copy of Moving Beyond Performance Management is Broken.

Moving Beyond Performance Management is Broken