Top 6 Best Performance Management Systems - February 2020

While performance management software is an incredibly powerful toolset to engage employees, there are a few ways that we see companies fall short when buying, implementing, and capturing value from these tools.

• Product Suite: Many of the vendors in this category have tangential offerings in the employee engagement category.  It’s important to think about your long term people strategy when you are contemplating these solutions.  While some may have exactly what you need today, others might be good enough, and align nicely with your future plans.  For example, you may have found the perfect point solution for performance management, but it doesn’t have an employee engagement module.  If you’re planning to roll out employee engagement in the next 18 months, it makes a lot of sense to try and bundle both of these offerings together for ease of use on the user end, as well as a unified view of what’s going on in the platform on the backend.
• Culture Change: At the large enterprise level, you are almost certainly going to have a change management team helping you to buy and implement this solution.  More importantly, they will help your employees and managers to see the value they can reap from a performance management solution.  However, most companies can’t afford Deloitte!  So, it’s incumbent upon the executive team and HR function to educate the why and how behind this new solution.  Chances are, you already have some sort of performance management solution in place and the software is meant to streamline it.  If you’re starting from ground zero, you’re going to have to communicate several times the value to the organization AND individual in using this solution through email campaigns, company wide presentations, manager communications, etc.  A pro tip here is to use individuals’ success stories to explain the value.
• Compensation Alignment: One pitfall is to tie compensation directly to an individual’s OKRs.  Clearly, performance based compensation works and is very much the underpinning of capitalism itself.  But, OKRs should only be 60-70% attainable, otherwise they are not going to optimize the individual and team performance.  If you tie these goals to comp, you will have a VERY hard time getting people to put together OKRs that they can only meet 60-70% of the time.  Make it clear in your communications how meeting OKRs will impact bonuses.
• Phased Roll Out: Very few organizations can rapidly go from zero to sixty.  If your company is not already doing 1:1’s, OKRs, etc - do not think that you can roll out the full force of a performance management platform in the course of a month or two, unless you’re a startup with <30 employees who are all nimble and excited about this management philosophy.  Instead, pick a core module of the solution you’re buying that has strong overlap with your current way of doing business.  Maybe you already do 1:1’s, and this software is simply a better way to organize and facilitate these interactions.  Start there, and after your organization is familiar with the software, roll out the next module.  Schedule 1-4 months per module to educate, roll out, and get comfortable.  A meaningful forced change to people’s  behavior will not result in success, but a measured one will.
• Another Login: Do not expect your colleagues to log into yet another system.  It’s just too much, and as a general rule should be avoided at all costs.  Instead, look for a performance management system that has integrations with email (Outlook, gmail, etc), slack, Jira, and all the other places that your employees live each day.  This cuts down on the effort needed to use these solutions, which of course will drastically increase your chances of high engagement.
• Aligning Goals: One last pitfall is around how people set goals.  It is very natural for employees to set OKRs that relate to the overall company goals, or their direct/indirect managers.  However, sometimes this is not the best use of people’s time.  For example, a company objective may be to cut costs, but someone in the marketing department needs to be focused on creative ideas for new campaigns, not scrutinizing which vendors could be cut.  Individuals should be encouraged to be thoughtful about what objectives they are setting.