Choosing the Right Performance Management System

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A lack of data and resources in workforce performance management can put a company at risk. Perhaps a company is unaware of how well its employees are performing. This might fail to recognize top performers, who might then leave for competitors. It also wouldn’t be able to identify high-potential employees who could gain experience elsewhere and return with greater skills.

This is why effective performance management is essential to support businesses. It helps align your employees, resources, and systems to meet their strategic objectives. Both formal and informal processes are used to assess the ongoing action plans, spot problems, and let managers know when changes need to take place to keep a business running smoothly.

What is a performance management system?

Quote about performance management by Michael Armstrong

A Performance management system enables leaders to track and coach employee performance in real-time. These systems not only ensure that employees are working effectively toward aligning organizational goals, but also assist leaders in developing their talents for peak performance.

Employee shows her co-workers something from her laptop

Why do you need a performance management system?

An annual or irregular approach to performance management is no longer effective as modern organizations move faster and face new challenges. Workplaces now require a modern performance management system that focuses on ongoing conversations, real-time data, and progress updates.

Performance management systems are used to improve communication and documentation between employees and managers. These systems help set clear expectations upfront. Employees, managers, and HR professionals in an organization will know what to do and when to do it if the process is defined clearly and concisely.

Tracking your employees’ growth throughout the year increases the likelihood of successfully completing professional and personal development goals.

8 Reasons Why Leaders Require a Performance Management System

Performance Management System Components

Setting Goals

Setting challenging goals motivates employees to improve their performance rather than having no goals. An employee who knows his or her goals will focus on the right priorities and make sure that work is aligned with organizational strategy, leading to accountability throughout the company.

  • Purpose-oriented goals
    • Set based on what success means for each role and what key performance indicators exist.
  • Project-oriented goals
    • Set based on what the exact outcome of a project must be.
  • Professional-growth goals
    • Set based on what a specific team member requires to advance in their role and learn new abilities and skills.

You can also use SMART GOALS, a very popular way to implement goals across the whole organization. Check out our blog about SMART GOALS.

Communication and Collaboration

Competition is not always an effective motivator. Instead of focusing solely on competition, performance management systems should encourage communication and collaboration.

A good performance management system contributes to the creation of an environment in which free and open, ongoing communication about the team, tasks assigned, and challenges encountered are encouraged. Constant communication inspires the team, keeps everyone on the same page, and makes you more proactive.

Performance Appraisal and Reviews

Organizations typically conduct mid-year and annual reviews in which employees’ performance is reviewed; he/she is appraised based on his/her achievements and fulfillment of his/her goals, as well as overall performance.

In recent times the introduction of a 360-degree evaluation has greatly enhanced the process and increased team productivity.

360-degree Feedback is a method in which employees receive (and give) constructive performance feedback from their peers, managers, and direct reports. This enables employees to gain a better understanding of their key strengths, alongside opportunities for development and areas where they may require additional coaching.

A 360-degree feedback report enables people to analyze their performance in comparison with others, by completing self-assessments for a more detailed comparison.

Good Performance Recognition

Recognition for good performance is just as important as criticism of poor performance. When employees fail to meet expectations, it’s important to let them know how they need to improve by giving specific examples. In the same way, when employees succeed or go above and beyond the call of duty, let them know you appreciate their work.

Most performance management systems offer generic reward programs and praise for employees who do well; these are crucial components of effective performance management.


Trust is the foundation of great companies, and feedback is the foundation of trusting cultures. A strong feedback culture correlates with a highly engaged workplace.

Continuous feedback should be tailored to the individual, constructive, and unbiased. Regular feedback fosters strong relationships by encouraging open communication and drives better performance through continuous improvement.

Learning and Development

Incorporating a learning culture into your employees’ day-to-day routines can improve your organization’s performance and its ability to retain trained, knowledgeable staff and establish a brand image for itself.

To improve active learning within the organization, a performance management system can be integrated with multiple individual platforms. Managers can assign courses and modules to employees like microlearning, where employees can learn bite-sized information in just 10 minutes every day, and check in to understand their progress.


Remember that focusing on teams, what they need to deliver to be successful, and then how individual team members can contribute while being more engaged and motivated is a good place to start.

A dedicated performance management system ensures that your organization lays the groundwork for future growth. Albert can assist you in tracking staff performance, such as employee productivity, and making it measurable so that you can turn it into actionable insights to boost business.

Start to track your employee performance now.


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