Performance Management System
An effective and successful company relies heavily on creating performance management goals that individual employees and the entire organization can meet in real time as well as in the long term. These goals move the company forward over time, protecting its bottom line and market share, ensuring customers and clients are satisfied, and upping levels of innovation and employee satisfaction.
A good performance measurement system relies heavily on organization to keep track of each employee’s goals and their strides toward those goals over time, which is why many companies use performance management software. With the changing corporate environment, which now incorporates social media outreach efforts, email lists, BYOD protocols and mobile employees along with more traditional workplace models, it is more important than ever to have an effective performance management system in place.
Software has revolutionized the performance management field with efficiency and effectiveness, so organizations large and small should consider talent management software to help them keep employee goals and successes organized, recorded and readily available for meetings, reviews and decision-making processes. The best software for your company will motivate employees, streamline manager workflow, and provide excellent training and clear goals. Because performance management is so important to a company, make sure to conduct a performance management software comparison before choosing the one that’s right for you.
Performance Management System Definition
Naturally, a performance management system definition that holds true for any company in any field is hard to come by, but all definitions share some common components.
Before diving in, though, it is important to cover a few others:
- Enterprise performance management definition: Monitoring performance across an organization in the hopes of improving the entire organization.
- Corporate performance management definition: Monitoring a company’s overall performance by assessing employee performance.
- Talent management system definition: Software assisting in the acquisition and maintenance of employees.
- Performance appraisal definition: An assessment of employee performance at major milestones.
It is particularly important to distinguish between performance management versus performance appraisal. While the latter really focuses on a sweeping look at the employee’s overall performance and is usually only undertaken at a review or other momentous occasion, performance management involves assessment of how the employee is performing in real time, and relies on data from their day-to-day performance more than large summary reports.
Knowing this, we would like to add the following definition to the mix: A performance management system is one that collaboratively improves the performance of an entire organization by collaboratively improving performance at the individual level. Training is just one part of the performance management system, but it is arguably the most important part since it sets employees up with the expectations to which they will be held during day-to-day and long-term operations.
Why Companies Should Value a Performance Management System
Some benefits to a performance management system are obvious: more motivated employees, a deeper investment in growth, and better analysis about how the company is tracking toward their loftiest goals. However, companies can easily overlook a small yet significant detail—conflict in the workplace. A study about workplace conflict found that 85% of employees deal with conflict on some level, and a total of $385 billion in paid hours is lost each year due to disagreement. Workplace conflict is inevitable, but a well-placed performance management system can mitigate some of these issues. A healthy performance management system regularly evaluates employee performance and creates a space for these conflicts to surface. Here are a few benefits of performance evaluation for companies and employees alike:
Employee reviews lead to higher levels of engagement.
Introducing a performance management system will allow managers to pinpoint employees with low productivity and engagement. After a performance evaluation, managers can better address these issues and tend to an employee’s needs. Additionally, low productivity could be an indication that the position isn’t a good fit for the employee. Thanks to an effective performance management system, the manager can help the employee find a position that’s a better fit for the employee—and for the business.
Get employee insights with a performance management system.
Unfortunately, exceptional workers can go unnoticed without employee evaluations. Talent management is a company’s best asset for addressing this problem. A performance management system can be of crucial assistance because it collects data in real-time, providing managers with the information they need to reward top employee performance. If an employee is consistently outperforming others every performance management cycle, they might be ready for more responsibility. With an effective performance management system, the company can identify potential leaders and future management.
Employee evaluations are necessary for retention.
Hiring and onboarding employees to replace churned teammates is expensive and puts stress on company culture. When talent management is taken seriously, leadership is evaluating employee performance regularly, giving employees a space to communicate if they feel their needs are being met or not. This problem is manageable with a performance review system. Talent management put processes in place, such as employee evaluations, to ensure employees are happy and engaged at work—all via performance management software. While implementing a performance management system can seem complicated, with a cloud-based solution like Lessonly, the process is simple, and the rewards are vast.
A performance management system enhances team camaraderie and cohesiveness.
Uncommunicated expectations are inevitable in the workplace, and disagreements are natural between employees. Teammates need encouragement to give and receive feedback if they feel unhappy with their current role or environment. Talent management is crucial, so a performance management system makes it easy to centralize feedback or schedule employee evaluations and coaching conversations with managers. Neglecting conflict can be a lost opportunity to boost employee morale, develop employees, and cultivate a healthier working environment.
Substantially improve an organization with a performance review system.
Businesses experience elevated retention rates, healthier cultures, and higher levels of productivity with a performance management system. Achieving lofty goals doesn’t happen accidentally, and a performance management process can keep the company on course. Companies will still need assistance from reliable talent management strategies, but a performance evaluation process in place lightens their load and makes employee evaluations more attainable. Everyone benefits from a performance management system—the employees, talent management, and the business as a whole.