The more performance management tools you have, the easier it is to run a great performance review process. It’s hard to run an effective review process if you’re just relying on annual reviews.
Your toolbox might already include classic HR tools like self-evaluation forms, cascading goals, and 1:1 feedback. When you’re ready to take a more modern approach, you can add continuous feedback, data visualizations, and goal progress tracking.
Before using any of these tools, you should understand how they fit into your performance management strategy. Let’s dive into the six components of performance management, then explore nine tools you can use to run amazing performance reviews.
What Are the Six Components of Performance Management?
Performance management is a broad term. Breaking it down into six components will help us think about how our HR tools can be more useful.
The human resources (HR) department creates and implements the performance management process. HR is also responsible for making sure every employee follows the set process. That involves reviewing the performance management process after each cycle. HR should also train managers and employees so that each group understands its role in the performance review process.
Part of performance management involves documenting each role’s responsibilities and processes. A new employee should be able to step into the vacated role and have documentation to guide them.
Succession planning means having a plan to replace employees who leave. The plan ensures other team members can cover an employee’s responsibilities on short notice. Succession planning is especially critical during uncertain times, as SHRM reports. With workers quitting at a higher rate, succession plans ensure the company can continue running without missing a beat.
Informal feedback offers employees constructive information about how they’re doing in the short term. Formal feedback can be a debriefing process after a project, or it can occur during the formal performance review.
Companies should document both types of feedback as part of the performance review process. Most companies only document formal feedback. PerformYard’s continuous feedback documents informal feedback and rolls it into formal reviews.
Goals provide employees with direction and expectations. The more you can tie individual goals to company goals, the easier it is for employees to understand their impact. At a minimum, you should be able to track goal progress in a dashboard. If you want to further align your organization, you can use PerformYard to tie employee goals into department goals into organizational goals.
Reviews, feedback, 1:1, and check-ins are the most common forms of performance management communication. Remote work has shifted 1:1s and formal reviews from the office to the screen, but the shift hasn’t stopped companies from collaborating.
A 2022 survey by Futurum Research and Microsoft found that “almost (of companies) 80% feel like they collaborate as well now as they did before.”
Motivation can be intrinsic; many employees find motivation in their relationships with colleagues and customers. Motivation can come also from the promise of increased compensation, promotions, or bonuses.
The employee should know how these incentives tie to their reviews and goals. There’s a lot to be learned from gathering data on employee motivation. For example, you may find that employees with lower salaries are more motivated by compensation than employees with higher salaries.
To access this type of data, you’ll need a software platform that can show employee data alongside review data. PerformYard does just that.
What are the 9 best performance management tools?
Performance management interactions provide direction for employees and documentation for managers. The process can be cumbersome when companies try to use manual systems. That has long been the case for many organizations.
Modern software can streamline the process through automation, centralized dashboards, and notifications. Check out this list of tools and think about how they’ll work within your organization.
Reviews and Check-In Tools
Review forms are only as useful as the data they capture. If you’re using paper forms or Google Docs, it’s time to start thinking about how you’re capturing and analyzing the data from every review.
1. Review Forms
Review forms are the formal documents (now usually electronic) that document employee performance. The best performance management review tools are customizable because every company needs different kinds of data.
Your forms should allow the HR department and managers to choose different variables such as:
- Question Types
- Form Authors
- Form Subjects
Your forms should also offer the ability to swap out questions and adjust wording without too much heavy lifting.
2. Review Completion Tracking
One of HR’s biggest responsibilities is making sure everyone has completed their reviews. This is easy when the company runs one annual review at the same time for every employee. It’s harder when the company starts to get serious about great performance management.
More review cycles lead to more work for HR. Annual reviews are easy to track; bi-annual or quarterly reviews are harder to track. HR’s job gets even harder when the company runs reviews based on the employee’s work anniversary.
Performance management software tracks which employees and managers have completed reviews on time. Tools like PerformYard show review progress in a live progress dashboard that eliminates the need for follow-up from HR.
3. 360 Reviews
The more people you ask to review an employee, the better you’ll understand how an employee contributes to the company. That’s the purpose of 360-degree reviews.
Jack Zenger, CEO of Zenger/Folkman, reports that “more than 85% of all the Fortune 500 companies use the 360-degree feedback process as a cornerstone of their leadership development process.”
The problem is that 360 reviews come with extra forms. More forms mean more work for HR unless you’re using software to automate the process. Tools like PerformYard make it easy to send out reviews, gather results, and analyze the findings.
Read this case study to learn how one mid-sized
4. Data-Rich Performance Management Reports
Reporting is a critical part of the performance management process. PerformYard software produces data-rich reports with visual layouts, making it easy to understand the performance management data. When you understand data, you can act on it.
Goal Management Tools
Goal progress and completion are fundamental elements of effective performance management. It’s critical to have one place where employees and managers can track goal progress in real-time.
5. Cascading Goals
As we’ve discussed, individual employee goals should tie to the team and organizational goals. This creates a direct line of sight into how employee actions impact company success. It’s not easy to do this without the help of software. Software tools track goals and sync goals so that when an employee completes a goal, the company’s goals update too.
6. Goal Progress Tracking
HR, managers and senior leaders want to know what kind of progress is being made toward goals at all levels. The best performance management tools allow every member of the team to define and track their own individual goals. Your performance management process should also provide the opportunity to collaborate; employees should be able to share goals and view progress.
7. Goal Visualization
A picture is worth a thousand words. That’s true when it comes to communicating progress and expectations. The best tools let you create easy-to-read charts and graphs that show progress towards goal completion.
Ongoing feedback is effective feedback. Feedback is useless if it only comes at the end of the year when it’s too late to make changes. Formal reviews aren’t the only time when supervisors and managers need to provide feedback.
The best performance management tools create opportunities for feedback year-round. Tools like PerformYard also store feedback so you can use it in formal reviews.
8. 1:1 Feedback
Your performance management tool should let you share and document immediate feedback. That includes feedback from peers and direct supervisors. Everyone should have the ability to recognize others and choose to share information with teams or individuals. Performance management software can document the feedback as part of the employee’s performance record.
9. Public Feedback
Public feedback tools are another important feature to look for in a performance management tool. PerformYard offers public feedback and lets people “tag” their feedback. The tags are searchable, so managers can locate the public feedback when it’s time for a formal review.