Performance Management System: What Is It And Why Is It Important?


A performance management (PM) system is a process for monitoring employee work efforts in one place, including aligning goals to the organization’s mission and vision, continuous feedback practices, and employee growth and development.  Effective PM systems ensure that all important information is stored in one centralized location, allowing employees to reflect on their progress and see just how far they have come. The core components of a successful PM system include continuous performance management, reliable data, and tools that solicit peer, self, upward, and external feedback. These systems create a set standard of performance expectations and ensure that behaviors reflective of company values are rewarded.

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What is a Performance Management System?

A performance management (PM) system contains various processes for monitoring employee work efforts all in one place. These processes go beyond just tracking performance. They include aligning goals to the organization’s mission and vision, continuous feedback practices, and employee growth and development. An effective PM system empowers employees along their journey and bolsters a healthy culture.

Importance of Performance Management Systems

High-performing organizations see the value and talent in each employee and therefore must appropriately manage that talent. Tracking employee efforts in disparate systems or on paper is time-consuming and inefficient. According to 99Firms, 58% of companies use spreadsheets, among other things, to track their performance. While spreadsheets may have their uses, relying on them as a performance management tool can lead to costly mistakes. By implementing a dependable and user-friendly system for performance management, organizations can enhance their data tracking capabilities, save valuable time and resources, and boost employee engagement.

The following list details why PM systems are vital to business growth:

  1. Attract, Develop, and Retain Talent

It is crucial for employees to feel valued by the organization. Cultivating a culture that invests in talent and fosters growth opportunities not only appeals to potential employees but also empowers the current workforce. Effective performance management accompanies employees throughout their entire career journey. By providing coaching and development through regular one-on-one sessions, growth-oriented performance reviews, and recognition of positive behaviors, true performance management systems create a supportive environment. Moreover, these systems ensure that all important information is stored in one centralized location, allowing employees to reflect on their progress and see just how far they have come.

  1. Efficiency

HR professionals often have the fullest plates on the team. They need a system that partners with them by automating workflows, holding pertinent employee data, and acting as a single source of truth for all performance metrics. Top-notch performance management systems seamlessly integrate with other essential human resource tools, such as payroll and communication technology, to enhance their effectiveness.

  1. Reliable Data

Manual processes lead to lost information and often don’t account for organizational shifts in management. Modern PM systems follow and account for employee records regardless of changes in team, role, or location. These systems document performance over time, creating historical records that can be analyzed to track trends and inform strategic business decisions. With reliable data, the well-documented past can help leaders to plan for the future.

  1. Drive Culture 

Instituting performance management best practices shows employees that everyone is held accountable, driving a culture of integrity and transparency. The use of a performance management system creates a set standard of performance expectations and ensures that behaviors reflective of company values are rewarded while negative behaviors are addressed. 

Key Elements of a Performance Management System

The list below details the core components that a successful performance management system should contain. 

  • Performance Reviews– Performance reviews go beyond simply filling out a form once or twice a year. They play a crucial role in tracking and evaluating performance while also helping employees prepare for their future career growth. In fact, performance review data is often used to make important leadership succession decisions for potential future leaders. To enhance this process, WorkDove’s 9-Box leadership succession tool complements the Performance-Values Matrix by leveraging the matrix results of performance + core values to determine the placement in the 9-Box grid.
  • Goal Management- Visually tracking company, department, and individual goals increases accountability and pushes organizational objectives forward. All goals should be aligned with the vision as this shows employees that their contributions produce a greater impact beyond what they see in the day-to-day.
  • Employee Feedback- Tools that solicit peer, self, upward, and external feedback help team members grow and give managers a source for comprehensive and holistic coaching. WorkDove’s 360 Degree Feedback allows managers and HR leaders to easily create forms, request and share feedback, and monitor progress with intuitive dashboards and reports. 
  • Continuous Performance Management- It is no secret that the modern workplace does not- and cannot- rely on the performance review as the sole channel for performance management conversations. Rather, true performance management must be continuous, ideally in the form of consistent one-on-ones between the manager and employee. Performance Check-Ins by WorkDove elevate the employee’s voice through frequent meetings, measuring employee sentiment, and consistently addressing employee goals and action items. 
  • Employee Engagement- There are many ways to monitor employee engagement, but strategic performance management systems will include tools for employee recognition, surveys, and individual development plans.
  • Employee Recognition– Rewarding good behaviors, ideally rooted in core values, publicly and privately keeps employees motivated.
  • Surveys– Gathering employee feedback on specific aspects of the organization shows that their opinions matter. The survey tool should allow for valuable insight through customization and intuitive reporting.
  • Individual Development Plans (IDPs)– Creating individual development plans makes it clear that the employee’s future is a key business strategy. Excellent IDPs will target development areas, highlight success measures, establish clear action items, and indicate top strengths. 


Additional functionalities to consider for a comprehensive PM system include learning management tracking, customizable agendas, and calendars that sync with external systems.


What Should You Consider When Choosing A Performance Management System?

When selecting a performance management system that aligns with the organizational needs and ambitions, it is important to consider what is critical to implementation success beyond the platform’s tools. The following list details key criteria for finding a solution that is right for your team.

  1. Ease of Use

Performance management comes with its own challenges, so it is critical to choose a system that is intuitive enough for even the least tech-savvy person on your team to navigate.

  1. Customer Support

Even the simplest of software systems will elicit user questions and concerns. Employees’ ability to embrace the change will be largely dependent on their confidence in understanding the system and finding help when it is necessary. Access to a library of resources, a customer support line/chat, and a dedicated Account Manager are all aspects to consider.

  1. Onboarding and Ongoing Training

Busy HR leaders need a partner in performance management. It is important to understand the level of onboarding and user training required to get the new system standing on its own, as well as the needs after it is live. Refresher training for new hires and general account management are a few scenarios to consider. 

  1. Culture Fit

Strong leaders work hard to drive a culture that makes employees proud and excited to come to work. Selecting a performance management system that works against the culture will quickly become a system of checking the boxes instead of a catalyst for living out the mission and reaching the vision. Not only should culture be considered when choosing the right platform but the vendor’s own mission and vision should be inquired about, too. 

  1. Cost & Flexibility

Sticking to a budget is the common denominator whenl seeking a performance management platform. For many, cost for the level of functionality is the number one priority. All systems are not equal, and you must evaluate. 1. Does the platform meet your needs/requirements? 2. Is the system modular, and can you buy only the applications that you need.  And, 3. What is the system cost?  

WorkDove offers the best system functionality for the price. Our platform is $1,000s less than competing solutions, yet consistently it is highly regarded for ease-of-use, flexibility, customer support, and ongoing system training. And, WorkDove is appified, thus a customer can buy only the applications that it needs, and can add other modules as the needs or organizational maturity grows.

Lastly, if a vendor is gatekeeping pricing information or it takes several demos for the vendor to share the estimated cost, it is a potential red flag. 

Why WorkDove Is A Best-In-Class Performance Management Solution

WorkDove offers a powerful, yet simple software solution that helps organizations streamline their processes and improve the employee experience. With tools designed to meet current performance management needs while also growing with the business, our comprehensive platform empowers employees and drives business results.

We will work with you to configure your performance management process that is unique to your organization, but not so unique that you get lost in the nuances. By offering everything shared in this blog and more, we bring peace to the workplace by powering healthy, high-performing organizations. 

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