When tasked with finding the right performance management system for their business, many busy HR managers don’t know where to begin. They wonder which features are essential.

A quality performance management system will help you save time while improving fairness in evaluating employees. How? It improves transparency in how you review your employees and monitor their progress, giving you an objective set of metrics to help you evaluate everyone by the same criteria. 

What should you look for in a performance management system? Here are eight key features that will make your new system invaluable to your organization.

Features of A Good Performance Management System

Many of the best performance management systems have a few features in common. They combine goal setting, feedback, check-ins, analytics, and reporting functions. Goals provide direction. Feedback ties goals to the day-to-day. Check-ins provide space for short and long-term performance discussions. Analytics and reporting show data.

Without these key pieces, a performance management system leaves something to be desired.

Clear Metrics of Success in A Performance Management System

Your performance management system should provide easy-to-understand measures of success that allow you to quickly determine how much progress an employee has made. Complex criteria make performance evaluation challenging. In contrast, clear benchmarks based on precise goals will help your team stay on track.

Productivity Metrics

As a rule of thumb, there are 4 different types productivity of metrics.

Quantitative metrics

This is what most people think of when they hear the word «metrics.» The reason for that is simple. Measuring quantity is often easier than measuring quality. IE: Choose the right data. Use the right formulas. Come to specific conclusions. Of course, this varies by company, industry and sometimes by location.

Needless to say, there are plenty of ways to measure quantitative data. Examples of simple quantitative metrics are, number of sales, amount of revenue, or percentage of referrals.

Qualitative metrics

These metrics reflect how well an employee performs. They’re subjective in nature. Managers typically base these discussions about metrics on objectives. That said, peer and customer feedback are also factors in qualitative metrics. To make objectives more tangible, use values, weights, points or percentages.

Efficiency metrics

Efficiency as a metric considers the quantity and quality of work. Here’s an example.

A call centre representative takes 100 calls in 8 hours. Some calls go well. Others went poorly. This may be productive from a quantitative point of view. In the same timeframe, her colleague took 20 calls, at the end of which, all clients were satisfied. This may be great from a qualitative angle. A third colleague also took 100 calls in 8 hours. And all the clients on his calls left satisfied too.

This is an example of a highly efficient employee.

Organizational performance metrics

In this case, organizations use the performance metrics of a larger group or workforce to determine how well the entire company performs.

A good performance management system can also help you choose clear metrics. Here’s a non-exhaustive list of common employee performance metric types:

  • Management by objectives: This goal setting model breaks down an organization’s goals into specific employee goals. Ideally, these goals would be discussed between managers and employees.
  • 9-box grid: This metric helps assess employee potential and current performance. This tool is often used to help promote high value employees.
  • Number of errors: This self-explanatory metric can be used in a performance management system in many ways. IE: Counting the number of spelling mistakes in a text or a lines of code.
  • Net promoter score (NPS): Often used to assess sales employees, this metric measures how likely a client is to recommend an organization to someone else.
  • 360-degree feedback: This employee performance tool uses feedback from managers, peers, subordinates and sometimes clients as a means of evaluation.
  • 180-degree feedback: Similar to 360-degree feedback, this metric evaluates employees based on manager and peer feedback only.
  • Number of sales: This objective works well for simple and direct sales. It can be less effective for longer, more complex sales cycles.
  • Absenteeism rate: Performance and rate of absence are often closely connected. Simply put, an employee can’t perform if they’re absent. And high performing employees are rarely absent.

On a similar note, strong visuals will help make employees’ progress crystal-clear as well.

An Automated, Intuitive Process

Naturally, you’ll want a system that’s designed to be user-friendly and intuitive. A great performance management system gives you automatic prompts and reminders so you’ll never forget a task you need to complete. It also lets you sign documents via an e-signature instead of going through the hassle of printing, signing, and scanning.

Plus, it lets you customize key features such as questionnaires. This means you’ll get exactly the information you’re looking for. Performance management will become as streamlined and simple as can be! 

360-Degree Feedback

A quality system lets you solicit 360-degree feedback from a broad range of people who work with each employee. You’ll gain a balanced set of feedback that helps you better understand each individual’s distinct contributions and challenges while reducing bias.

Better yet, you can collect all that feedback electronically rather than having to sit down and conduct in-person interviews with each participant — which saves you a huge amount of time. You’ll easily discover areas for improvement and develop a better grasp of each employee’s strengths.

Self-Evaluation Tools

Likewise, your system should allow employees to complete self-evaluations periodically to assess their own progress. Self-evaluations help people think critically about their performance and where they aim to improve.

Furthermore, self-evaluations encourage employees to take more ownership of their own growth, feeling more invested in managing their own performance. In turn, managers will better understand how employees have been working to improve and where they need more guidance.

Goal-Setting Support Within A Performance Management System

Without frequent reminders about their goals, employees often lose sight of them. Some are unclear about their goals from the start. A quality performance management system lets you set dynamic goals. You can also modify goals over time. This gives employees room for their ambitions and competencies to grow.

Ideally, you should be able to set a variety of goals, in a range of formats. Tracking employee progress toward key milestones will greatly boost motivation and engagement. Here are a few goal-related terms to keep in mind:

  • KPIs: Key performance indicators are measurable goals. They show how effectively a company is meeting business objectives
  • S.M.A.R.T.: Specific, measurable, achievable, relevant, and time-bound goals are another category. They use specific criteria to ensure goals are clear and can be reached in a given timeframe.
  • OKRs: Objectives and key results are yet another way of setting goals. They’re used by groups and individuals alike to achieve often hard to reach goals.
  • For less specific timeframes, goals are also broken into short-term and long-term periods. IE: Weeks, months, quarters or even year.

Instant feedback

Through real-time feedback, managers can address a problem as soon as it arises. They can also give specific feedback about ways an employee is excelling so that they’ll understand how to continue improving. Up-to-the-minute feedback helps you eliminate unnecessary meetings, allowing you to provide feedback in an unobtrusive way throughout the day.

Giving frequent feedback will also promote a positive feedback culture, encouraging employees to share (and ask for) constructive feedback with one another as well. 

A Manager Log

A great software program also gives managers a place to keep a regular log of how employees are performing, giving them a handy reference on employee progress. In this log, managers can track important events in their employees’ development so they’ll clearly remember these milestones. 

Excellent Customer Service

Select a provider that excels in customer service as well. When questions arise, you want to be able to reach out and get an answer as quickly as possible, rather than waiting for days. Choose a provider with customer service staff who are happy to walk you through any issues you experience so you can get on with the important business of managing your employees!

Of course, a top-tier system must also protect the sensitive data of your employees and company. It should minimize the chance of any data leaks occurring, giving you peace of mind — so make sure your provider offers that security. 

Choose a system with all of these features, and you’ll streamline your performance management process. Employees and HR staff alike will be delighted with the ease of monitoring their progress toward their goals! 


Looking for a performance management system that meets all these criteria? Try Primalogik for free!