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A performance management system can be divided into a few major components which ensure its effective functioning. Separating the components will help you understand the workings of the system and provide insights into deploying a robust performance management system for your company.
The major components of a performance management system are:
The most significant benefit of deploying a performance management system is the boost visible in employee performance over time. Since the staff realize that a dedicated system is tracking their daily work, they tend to work better, avoiding lethargy. Such improvement in performance can also be easily tracked using the performance management system itself.
Another major benefit comes in the form of improved employee motivation. Since the staff understand that the performers will be recognized and rewarded in the company, they would be motivated to work better to achieve the organizational goals. Such motivation results in an increase in overall productivity, leading to better overall branding and long-term success.
With improved productivity and motivation, employees will remain engaged with their organization. Such interactivity will ensure their long-term retention as they feel a connection with their company on a personal level. Improved retention will also result in further enhanced productivity as they understand their organization better.
Deploying a performance management system will also result in increased time and cost savings as the HR team can easily track the employees’ performance and provide steps to enhance their performance as required. The system can also share in-depth insights with HR and management, making it very easy to reward the performers and upskill the under-performers.
The aforementioned factors result in increased engagement of the staff with the workplace as they get motivated to work harder for their company. Since they understand that their performance is being monitored continuously, it will result in improved performance, leading to better productivity and appreciation from the management, culminating in increased engagement.
Having a robust performance management system also helps the HR department to identify any skill gaps in the workforce. Since their work is continuously being analyzed, the employees’ performance can be measured accurately, resulting in the HR team understanding their shortcomings and skill gaps. With such accurate skill gap identification, the HR team can suggest the perfect training program to their staff resulting in choosing the right skills for upskilling the team.
With the correct identification of skill gaps, the HR team can set performance management software to assign relevant training to the employees. Modern performance management systems can even use AI to identify the key traits of employees and assign them the right training for their upskilling. With training that enhances their inherent skillset, the employees would also be interested in the training, making it highly effective for the company.
Additionally, a robust performance management system will also reduce the overall paper trails since all metrics will be measured digitally. It will reduce the time and cost of performance measurement as well as keeping records of all data generated. As a result, it becomes very easy for the management and HR to check the database and make data-backed decisions for the employees.
Since we are discussing performance management software, we should understand the current trends in the software market. A thorough understanding of the trends in the market will help us understand the latest features which we need to be aware of when searching for the ideal performance management system.
Hence, we have enumerated the common performance management software trends below:
Since the world is moving towards a digital 24/7 connected ecosystem, performance management software has also adopted the cloud architecture to stay relevant. Cloud computing has multiple benefits over the traditional client-server architecture, such as round-the-clock remote availability, hardware independent access, improved accessibility, enhanced backup options, increased security, and more. Hence, all major performance management systems have adopted the cloud computing architecture to provide a seamless service experience for their clientele.
With the integration of HRMS with performance management software, human resources have evolved into ‘strategic HR’ which uses employee and company data to help the HR teams undertake their routine tasks. Data-backed strategic HR tactics are more effective than traditional HR strategies since they consider the consequences of the decisions on the employees and the employer. Hence, modern performance management systems provide in-depth analytical tools to help HR gather valuable insights into employees’ performance.
With the added usability and accessibility of performance management systems using cloud architecture, it has become much easier for the HR team to assess their employees effectively. However, their performance data needs to be fed into analytical systems like an HRMS for gathering valuable insights. Similarly, the performance data provides HR with accurate appraisal numbers, ensuring fair salary increments. Hence, the performance management system must be integrated with other commonly used software in the organization.
The human experience refers to giving meaning to the staff for their work. It can be accomplished by personalizing their work and helping them understand the value of their work for the organization. It results in increased productivity and contributions, leading to satisfied employees. This trend is vital for the success of a company since productivity has a direct effect on the products and services provided by the organization.
The aftermath of the recent global epidemic has resulted in an increased awareness and emphasis on the mental and physical well-being of employees. Hence, many companies are providing numerous benefits for their employees, while also including it into their performance management practices. It also helps the staff realize their importance in the company, leading to long-term retention.
Following are eleven of the best Performance Management software tools in India currently. We’ve also put together a useful list of the best payroll software in India. This list provides information on the features and pricing of each software. You can find all this information in our article.
Pocket HRMS is a comprehensive AI-based cloud HRMS solution for all sizes of businesses from SMEs to enterprises. It has an in-depth performance management system and advanced analytics and reporting module, as well as integrated rewards and recognition options, making it India’s best performance management software.
Enhanced customizable performance management
In-depth analytics & reporting
Comprehensive rewards & recognition system
Standard Plan: ₹2495/month for up to 50 employees
Professional Plan: ₹3995/month for up to 50 employees
Premium Plan: Quote on demand
DarwinBox includes multiple modules which are relevant for performance management in a company. Since it is a comprehensive suite of HRMS modules, its talent management module is highly customizable, enabling companies to tweak it to their exact specifications.
A comprehensive suite of various HRMS Modules
Highly customizable talent management module
Slightly complex for a 1-man HR department
Quote on Demand
HRSoft is another extremely capable HRMS, which provides advanced performance management features. It has a flexible performance management module, which can also be integrated with other business solutions for a streamlined experience.
Integrated performance management
Improved compensation management
In-depth rewards and recognition
Quote on demand
GreytHR’s performance management module provides various options for managing employee performance goals. Being a complete HR management software, it provides payroll management, performance tracking, rewards and recognition, and others.
Integrated performance management with payroll management
Comprehensive HR suite
Essential Plan: ₹3495/month for up to 50 employees
Growth Plan: ₹5495/month for up to 50 employees
Enterprise Plan: ₹7495/month for up to 50 employees
ZingHR is another popular performance management and HR software which provides multiple features which help track and manage employees’ performance effectively. It provides several performance management-related options such as goal-setting, feedback mechanisms, performance tracking, and more.
Simplified interface with multiple customization options
Easy reporting and analytics options
Quote on demand
Trakstar is one of the top performance management software for enterprises since it primarily focuses on tracking employees’ performance and their appraisals. The software is extremely user-friendly and highly customizable, making it ideal for all kinds of businesses.
Intuitive platform with a focus on employee performance management
Multiple customization options for precise fine-tuning
Quote on demand
HROne is another excellent HRMS platform which provides various modules to augment the daily activities of the HR department. Being a comprehensive suite, it also has a talent management module that enables the HR team to accurately track employee performance and gather valuable insights using in-depth analytics.
Basic Plan: ₹85/user/month for 50+ team
Professional Plan: ₹115/user/month for 50+ team
Enterprise Plan: Quote on demand.
SAP SuccessFactors is another excellent suite of complete HRMS tools that enable HR to undertake their tasks with enhanced efficiency. Its talent management module provides various functionalities such as precise goal-setting, continuous feedback, monitoring employee performance, gathering in-depth insights, and more.
Fine-tunable to meet the exact specifications of an organization
A complete HRMS for tacking all tasks
Quote on demand
Keka is another popular HRMS in India that provides performance management functionalities. Being a complete HRMS, it is highly customizable and offers several features such as setting employee goals, monitoring their performance, gathering data and generating patterns on their performance figures.
Comprehensive HRMS with customizable features
In-depth analytics and reporting module
Foundation Plan: ₹6,999/month for up to 100 employees
Strength Plan: ₹9,999/month for up to 100 employees
Growth Plan: ₹13,999/month for up to 100 employees
Oracle HCM is a complete HCM solution with a highly flexible architecture, which enables it to be used by companies of all sizes. Being a complete hire-to-retire solution, it also comes with multiple features to manage employee performance such as accurate performance tracking, rewards and recognition, reports generation, and more.
Comprehensive HCM suite
Offers all performance management features
Quote on demand
BambooHR is another popular choice for companies searching for HR management systems. Its talent management module is comprehensive and includes various features such as goal-setting and tracking, review management, feedback mechanisms, and more.
Comprehensive performance management system
Complete HR management software
Intuitive user interface
Quote on demand
There are several performance management software, which cater to the different requirements of companies. Some of the major types include:
Performance review software helps managers evaluate their employees effectively, based on the preset targets and their completion rate. The goals and targets for a specific period are set by consulting with the employee to ensure that the targets are achievable. It also required constant communication between the manager and the employee.
In a 360-degree feedback mechanism, the employees receive feedback on their work from different sources than their manager. 360-degree review systems gather reviews from peers, superiors, clients, and other employees who work closely with the employee whose performance is being evaluated. It helps gain a 360-degree overview of employee performance, which simplifies the process for HR management.
KPIs measure the Key Performance Indicators of the individual employees, their teams, and departments against the organizational goals to ensure that their performance is adequate as per the industry standards. For KPI software to be effective, the KPIs need to be set as per the individual’s competencies and the skillset required for undertaking the tasks required by the role.
Employee recognition software provides additional options for recognizing and rewarding the staff for their achievements in their role. While these software has the option to monitor the performance of the staff, it goes a step further by helping the HR managers reward their staff for a job well done.
Some of the best practices for performance management include:
By focusing on personal relationships, the managers and leadership in general, can make their feedback more effective as their staff will be more open to feedback. Hence, it is essential to build trust and mutual respect with your employees, which will also result in engaged staff leading to better performance.
The managers should provide their staff with constructive feedback which enables them to understand their shortcomings as well as how to improve their work. Providing constructive feedback helps the employees understand how to perform better while also ensuring their performance meets the standards set by the company.
Additionally, the review process should also be conducted promptly to ensure that the staff realizes their inadequacies soon. If the feedback is delayed, they would have repeated the same mistakes leading to more issues for the organization. Hence, a constant review process is essential for any modern company to keep its employees’ performance at the optimum level.
Moreover, the performance management mechanism should be automated to ensure that employee performance is continuously being monitored and their efforts are recognized. Having such automation ensures that the HR and managers can spend more time and effort in rewarding the performers and providing the right training for the under-performers.
The business impact of performance management software can be easily measured since it provides the HR and the management with the right tools to quantify employee performance. Hence, they can observe tangible performance improvement after the deployment of performance management software.
With the implementation of such a system, the management can visualize the increase in employee productivity and engagement, as well as ensure transparent communication since the numbers are visible to both the employee and the employer.
Having the numbers on display will also help set achievable targets for the next cycle, making the process more streamlined for the managers. Additionally, they can also understand each employee’s strengths and weaknesses, helping them set the goals for them accordingly.
The cost of deploying performance management software varies according to several factors. The most significant factor is the individual needs of the company, which results in various customizations to be implemented on the software. Similarly, different companies require different kinds of feedback mechanisms, which results in varying module requirements.
Depending on the requirements and the modules selected, the cost of the performance management system can vary a lot. Some standard features would be available to all users such as integration support, multiple feedback options, and report generation, among others. However, depending on the company’s preferences, these options can be modified to include more functionalities such as customized reporting, interactive surveys, and more.
Continuous performance management refers to the practice of monitoring employee performance continuously and providing feedback on their work regularly. Such kind of performance management has proven extremely effective resulting in an increased number of companies adopting performance management strategies which include continuous performance monitoring and feedback mechanisms.
Continuous performance management also enables the employees to meet the company expectations as they understand their insufficiencies and make necessary changes while working on their tasks. It helps the company rectify their course of work, making the process extremely effective and efficient.
Implementing a robust performance management system can be a daunting task. It requires a dedicated team that understands the inner workings of the company as well as the working potential of its staff. However, it is commonly observed that managers are often left with the task of rating their team for an annual appraisal process. Such legacy method of performance management has multiple shortcomings, such as:
The managers may not recollect the significant achievements of every staff member.
They may not be able to accurately collect the performance data required.
They may be biased towards certain employees.
They may fail to acknowledge an employee for a certain job well done.
Yes, since performance management software is required to be used by organizations of different sizes, they are developed keeping in mind the varying requirements of these companies. Hence, almost all software vendors provide customization options for their performance management systems.
Additionally, the numerous features of the software are developed to be easily customizable as per the company’s preferences. Most performance management systems are modular in nature to accommodate the varying needs of the organizations. As a result, these software can easily scale according to the growing needs of the company, making it easier for the users to make changes whenever required.