According to a 2012 Human Resource Forum Poll, 16% of the respondents indicated that they did not have performance management systems in place to measure employee performance.

In fact, both HR managers and employees found conducting staff appraisals to be uncomfortable. From the managers’ point of view, judging someone was difficult; while for the employee, it was unpleasant to be judged.

This is where good appraisal software comes to the rescue. The benefits of performance management tools serve to align employee goals with the overall organization’s goals. Simultaneously, the key to the success of any appraisal system is its timeliness and objectivity, which require both transparency as well as confidentiality.

Benefits of Performance Management

A performance management tool provides the following benefits for employees, managers, HR, and the company as a whole:

1. Performance-Based Compensation and Rewards

A lot of times, managers get caught up in fulfilling their various responsibilities and do not have much time to interact with the rest of the staff.  The benefits of a performance management system ensure that managers communicate clearly with to discuss performance issues with employees. It also allows managers to reward the right employees in the correct manner. The company can use this data to properly plan budgets and set the stage for performance improvement plans (PIP) and any other actions that may follow. These actions will encourage and motivate employees to perform at optimum levels.

A lot of times, managers get caught up in fulfilling their various responsibilities and do not have much time to interact with the rest of the staff. The benefits of a performance management system ensure that managers communicate clearly to discuss performance issues with employees. It also allows managers to reward the right employees in the correct manner. The company can use this data to properly plan budgets and set the stage for performance improvement plans (PIP) and any other actions that may follow. These actions will encourage and motivate employees to perform at optimum levels.

2. Aimed Staff Development

The benefits of a performance management system is a good way to discover learning and development needs and are an important part of a progression process. It helps employees remain updated on ongoing performance evaluations so that they can act thoughtfully and consistently to the facts. In this way, employee appraisals help improve morale and increase productivity.

The benefits of a performance management system are a good way to discover learning and development needs and are an important part of a progression process. It helps employees remain updated on ongoing performance evaluations so that they can act thoughtfully and consistently to the facts. In this way, employee appraisals help improve morale and increase productivity.

3. Identify and Help Under-Performers 

Not only is it important to reward good work, but we also need a platform to deal with employees who need improvement. Employee performance evaluations help to identify and document employees who are under-performing and why. Managers can then recommend the necessary actions to bring these employees up to speed, whether through further training, increasing their benefits, or even through counseling.

4. Documentation of Employee Performance Evaluations

It is crucial for an organization to keep performance records of all employees, and even more so for many years. This is where a performance management tool proves its usefulness. These performance evaluation records serve many purposes in helping managers track the historical development and performance of every employee in a company. They can even give insights to help managers with strategic talent development, such as succession planning or leadership development.

Companies should take an overall look at their employee evaluation systems and list out specific goals that are tied to planned initiatives and the performance management system. A good performance appraisal system, administered by skilled HR personnel and managers, is the best thing for a company and for its entire staff.