Innovative Performance Management Tools for Modern HR
The greater the array of performance management tools at your disposal, the smoother your performance review process becomes. Relying solely on annual reviews can pose challenges when aiming for an effective process. Your toolkit might already encompass conventional HR resources such as self-assessment forms, goal alignment, and one-on-one feedback sessions. When you’re ready to embrace a more contemporary approach, consider integrating elements like ongoing feedback mechanisms, data visualization tools, and goal progress tracking features.
However, before deploying any of these tools, it’s crucial to grasp how they align with your overarching performance management strategy. To provide clarity, let’s delve into the six fundamental components of performance management and then explore nine tools at your disposal to facilitate exceptional 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. 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.
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.
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.
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.
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.
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.
4. Data-Rich Performance Management Reports
Reporting is a critical part of the performance management process. HR 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.
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.
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.
Here at QuantaHCM, our platform’s talent management capabilities help you optimize employee satisfaction, engagement, and effectiveness with simplified benefits administration, streamlined performance management, and more accurate compensation management.
Decided to maximize the capabilities of your HR talent management? Reach out to us today and let us streamline mundane tasks, allowing you to prioritize employee management.