The path to developing more top performers throughout your organization depends on a solid performance management system. While historically this term referred to goal-setting methodologies and similar processes, it’s now used to describe software platforms like 15Five’s Perform that centralize everything from performance reviews to feedback loops. As your organization’s needs evolve, you need to consistently reevaluate the tools and processes you use. It’s no different in performance management.
In this guide, you’ll learn how to evaluate your current system, identify the signs that you need a change, and choose a new system.
Key Takeaways:
- A performance management system should evolve with your organization’s goals, culture, and workforce needs.
- Clear evaluation criteria—such as usability, scalability, and analytics—are essential when reviewing your current system.
- Comparing employee performance management software options helps identify gaps in features, integrations, and user experience.
- Many companies are changing their performance management systems due to outdated technology, poor engagement, and lack of strategic alignment.
- Choosing a performance management system that balances employee needs and business objectives ensures long-term value.
What is a performance management system?
A performance management system is a software platform for setting and tracking goals, soliciting and analyzing feedback, and charting and supporting employee development. These modern systems typically centralize and automate processes that tie directly to employee performance, like performance reviews and career development. They will also usually integrate seamlessly with other systems you use, like HRIS and productivity tools.
The primary purpose of a performance management system is to support employee growth, promote alignment on goals, and drive performance throughout the organization without relying on manual processes and outdated tools. It gives managers, leaders, and employees alike a single source of truth for everything related to performance management.
Traditional performance management systems typically began and ended with a goal-setting methodology (think OKRs or SMART goals) and yearly performance reviews. Now, managers typically use modern systems to build and maintain channels for continuous feedback, keeping their fingers on the pulse of what matters most to their teams. These systems go beyond just checking boxes (e.g., yearly performance reviews and irregular engagement surveys) and turn performance management into a core element of your company culture and strategy.
Why companies are changing their performance management systems
Many companies still use outdated performance management processes, patching together manual tasks and outdated tools into something that resembles a coherent workflow. This popular approach can create significant problems, which usually serve as a warning sign that you need to upgrade. These problems include:
- Legacy systems with little to no integrations: If you’re constantly copying and pasting data back and forth between your performance management system and other tools, you’re losing valuable time that could go to more important tasks.
- Poor adoption: When managers constantly come up with workarounds and shortcuts to bypass your system, that’s usually a sign that it’s not serving them in the right way.
- Low employee engagement: If employees groan every time they need to fill out an engagement survey or participate in a performance review, your performance management system may be in need of an upgrade.
- Rigidity: With more and more offices embracing remote and hybrid work, you need a system that can accommodate collaborators in multiple locations. Legacy systems really offer that kind of flexibility.
- Lack of reporting and analytics: Your legacy system might offer basic reports, but can it give you the broad visibility and deep data analytics you need?
Why do companies change their performance management systems? In short, because they’ve hit a wall. They’ve reached the limit of what their system can do, and it ends up costing them more to keep using it than to make a change. A lack of adoption and mounting frustrations combine to undermine performance management efforts until someone in leadership decides it’s time to look for a different system.
How to evaluate a performance management system
After deciding that it’s time for a change, leaders run into a new problem: evaluating their options. Here are the criteria you want to start defining early in this process:
- Ease of use and adoption: The most advanced performance management system on the market won’t do much for your organization if it’s not easy to use. You need a system that strikes a balance between advanced features and being intuitive enough for leaders, employees, and managers to use it.
- Features and functionality: Review what a performance management system offers so that it can support all your needs, from goal setting to regular check-ins, feedback loops to employee recognition, and performance reviews to employee engagement surveys.
- Data and analytics: A performance management system doesn’t just centralize the tasks involved in this essential process. It should also give you a one-stop shop for analyzing all the data these activities generate so you can plan better initiatives.
- Customization and flexibility: A system that works for one organization might not necessarily work for another. While you might be able to find a performance management system that suits most of your needs, you’ll ideally want a platform that’s flexible and customizable enough to handle your existing needs as well as future needs when you scale.
- Support and training: Does the system you want to use offer robust customer support? Is training built into the system? These will allow you to increase adoption at every level of your organization, ensuring you get the most out of your investment.
Employee performance management software comparison: What to look for
It’s important to compare a potential system against what you currently have in order to determine whether a change makes sense. Not sure where to start? Here’s what you should look at.
| Switch systems if… |
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Cost and value |
The new system either costs less than what you’re using or delivers significantly more value. |
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Interface and ease-of-use |
The balance between ease-of-use and features is a better fit than your existing system. |
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Feedback loops |
The new system supports feedback for managers, employees, and between employees. |
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Employee engagement tools |
You can build robust employee engagement surveys and initiatives based on best practices. |
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Reporting and dashboards |
The new system has robust reports filled with real-time data. |
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Adapts as you scale |
The new system can support performance management efforts at all stages of your growth. |
No matter which system you pick, you’ll want to ensure it aligns with and supports your overall business strategy, enables employee development, and empowers retention efforts.
Signs it’s time to change your provider
Some warning signs can signal that it’s time to move from a legacy performance management system to a modern software platform. Here are these signals:
- Employees complain about your system: Every time an employee has to interact with your performance management system, they complain about it to someone, whether it’s a team member or a manager. This adds unnecessary friction to every process, from employee engagement surveys to performance reviews.
- Reviews promote compliance, not growth: Performance reviews shouldn’t be about getting employees in line, but that’s often all that happens when reviews just feel like you’re checking a box. When performance reviews aren’t a stepping stone for future growth, you need to reevaluate your system.
- Leadership has no actionable insights: If leaders aren’t getting the insights they need from your performance management system, then what is it really accomplishing? This can be caused by two different but equally problematic issues: a lack of reliable data or reports that are so difficult to access that leaders just don’t use them.
- Incompatibility with remote or hybrid work: Few software platforms are completely incompatible with remote work, but they can have subtle issues that invisibly disadvantage remote workers and contribute to proximity bias in managers.
- Slow or inadequate support for vendors: No one can guarantee that a software platform will run without issues 100% of the time. But when performance management systems can cost hundreds, if not thousands, of dollars a month, you should expect support that gives you access to the right expert at the right time.
Case for modern systems: Linking to 15Five
Employee performance is the linchpin for everything from employee engagement to retention. A modern performance management system is an essential part of supporting these initiatives:
- Employee engagement: Employees are more engaged when they feel like they’re doing a good job and their performance is being recognized. A modern system surfaces measurable metrics that highlight that.
- Employee experience: Making your workplace a great place to work depends on employees feeling like they’re working on something that matters, that their skills are improving, and that their leaders recognize their contribution. A modern performance management system gives you the tools for doing this.
- Career development: A modern performance management system gives employees a foundation for understanding how their work impacts their organization and what their managers need from them. It facilitates charting a path towards their next milestone.
- Company culture: Your company culture should trickle down through every decision that gets made, whether that’s at the leadership level or in individual projects. A performance management system ensures that company culture is represented in performance reviews, employee engagement surveys, and more.
- Diversity, equity, and inclusion: Legacy systems can incidentally introduce bias and discrimination in important initiatives. Modern performance management systems have tools that help you eliminate bias, identify potential instances of discrimination, and improve your DEI initiatives.
So with this in mind, which system should you try? Here’s why you should consider 15Five’s Perform platform.
- It’s flexible: 15Five can support your organization at every stage of its growth with best practices, templates, and integrations that enable performance management processes no matter what size your team is.
- It’s holistic: 15Five Perform can enable employee engagement surveys, performance reviews, and any other process that supports the growth of talent in your organization, all in one place.
- It’s data-driven: Performance management activities shouldn’t just check boxes. They should give you actionable insights you can use to build a better strategy. 15Five collects these insights in one platform and gives you the tools you need to turn them into reports your leaders can trust.
- You can actually use it: Despite how powerful 15Five’s platform is, you don’t need a degree in software engineering to make it work.
Want to see what 15Five Perform can do for your talent? Book a demo here.
Make your system a top performer
Your performance management system is the foundation for building a stronger employee experience, better employee engagement, and clearer career development trajectories. But in too many organizations, a legacy system can cause more problems than it solves, especially when it creates unnecessary friction for employees, doesn’t integrate natively with your HRIS, and doesn’t give leaders the insights they need for their business strategy.
Pick a modern platform that’s natively integrated with the systems you already use and centralizes all your performance management initiatives in one place—without creating a convoluted tool that no one really knows how to use.
Want to future-proof your approach to performance management? Book a demo of 15Five’s Perform platform here.
