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Top 6 Best Performance Management Systems - June 2020

The best performance management software, benefits, pitfalls, pricing and more

The best performance management systems give managers and employees an in depth view of the organization as whole, and how their efforts are making an impact.  It supercharges employee performance through 1:1s, OKRs, and goal management - all of which are best practices for today’s modern PeopleOps team.

Performance management systems have typically been part of annual review process that gives the employee a snapshot through a superficial performance appraisal. However, this category of HR software is evolving quickly and has become an important part of any company's talent management strategy.

We've spent a lot of time researching this space, and continue to stay on top of the latest. Our goal here is to provide a short list of vendors we believe in for you to do demos with, along with everything else we think you need to be successful in implementing a new performance management system including the key benefits, pitfalls, thoughts on ROI and more.

We spend hundreds of hours researching the best HR and recruiting software so you don’t have to.  We never take money from vendors during our research phase and rely heavily on practitioners and experts to help us recommend the right software.  Most of the vendors featured on our site have no commercial relationship with us, we want to feature the best software for our readers regardless. Learn more

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Hours Researched
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Experts Consulted
17
Vendors Reviewed

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Top Performance Management Software

We track thousands of HRTech solutions, these are the best performance management solutions per our research and expert council as of June 2020

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Why we love it

:

ClearCompany

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With ClearCompany’s Performance Management Solution, you’ll increase not only employee satisfaction but also the frequency and effectiveness of performance conversations across your entire organization. ClearCompany’s Performance Management is the only solution that incorporates predictive performance data and automatically understands each employee’s role and goals, allowing you to easily customize review cycles and questions to unique positions and give each employee a personalized and actionable review experience.


With a mobile-friendly experience designed to increase participation, cycle management tools that reduce the administrative burden on HR teams, and goal tracking, there is no better choice for performance management software.

ClearCompany

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ClearCompany

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ClearCompany

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ClearCompany
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Why we love it

:

eloomi

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eloomi allows HR teams to see performance management data across the organization from one central dashboard.  This systems makes it easy to start coaching sessions, complete with templates to help make these impactful.  Employees can also take control of their growth and OKRs through the system.  Organizations like Copenhagen Airport and Domino’s trust eloomi. This solution fits perfectly in the segment of mid-sized to enterprise businesses.

eloomi

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eloomi

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eloomi

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eloomi also offers a best in class learning management system that is very complimentary to the gaps uncovered through their performance management software. Learn More About eloomi

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eloomi
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Lattice

Lattice

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Why we love it

:

Lattice’s people analytics software empowers managers and HR to get a holistic view of what’s going on in their organization and make more data driven decisions. Lattice has an expansive product that covers employee engagement, 1:1s, goal setting and recognition. Their customers include Slack, Asana, WeWork and many more.

Lattice

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Lattice

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Lattice

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Combining employee engagement with performance management means more insights into your organization (maybe the sales team is high performing, but burnt out!).

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Lattice
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Small Improvements

Small Improvements

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Why we love it

:

Small Improvements is a performance management platform that allows companies to conduct 1:1s, give feedback, and relate employee efforts to goals.  Marquee customers include Strava and Duoloingo. It’s worth noting this solution is free for companies with <10 employees.

Small Improvements

Customers:

Small Improvements

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Small Improvements

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Combining employee engagement with performance management means more insights into your organization (maybe the sales team is high performing, but burnt out!).

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Small Improvements
 to learn more

Reflektive

Reflektive

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Why we love it

:

Reflektive’s software covers the gambit of performance management to employee engagement.  This means their product allows you to measure and track OKRs, 1:1’s, real time employee engagement, etc all from one platform.  Reflektive has raised over $100 million, and boasts customers like Comcast and Dollar Shave Club.

Reflektive

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Reflektive

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Reflektive

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Reflektive allows users to seamlessly interact with their solution through gmail, Outlook, and Slack making it simple to regularly engage employees.

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Reflektive
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BetterWorks

BetterWorks

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Why we love it

:

Betterworks is a performance management platform designed to measure what matters most in your organization – your people. This software helps companies with OKRs, as well as conversations, feedback, and recognition. Overall, it allows your employees and mangers to understand where the organization is trying to go, and how they are impacting these goals.

BetterWorks

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BetterWorks

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BetterWorks

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Their board member John Doerr is one of the world’s most famous investors, and also the author of “Measure What Matters”

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BetterWorks
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7Geese

7Geese

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Why we love it

:

7Geese is an employee first performance management system which has focused on the under-resourced HR teams of small to mid sized companies.  They are very focused on tracking OKRs and allowing employees to see how their actions are contributing to the overall performance of the organization.

7Geese

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7Geese

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7Geese

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7Geese has a dedicated team of talent advisors who can help you get started, all of whom have backgrounds in both HR and change management.

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7Geese
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That's the end of our shortlist.  You can read on for more information we think you should know about this category including the core use cases, best practices, pitfalls, pricing info, and a lot more.  Just below this sentence you'll find a buyer organizer spreadsheet you can download to stay organized throughout your selection process. Good luck :)

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What is Performance Management Software?

Performance management software is the analytics layer on top of the organization that allows HR and the executive team to have a strategic understanding of the people side of the business, along with information to help individuals understand how they fit in and how they can improve their employee performance.  This software can tell you what the organization is working on (international expansion, increased margins, etc), what a team is working on (partnerships in Asia, lower costs, etc), all the way down to what an individual person is working on (meeting with head of BD at Samsung, implementing inventory management software, etc).

This type of architecture allows the board and c-suite to understand what is happening in the organization ensure everyone is paddling in the right direction.  What’s also interesting is that this information allows individual employees to figure out how their efforts are contributing to the success of the business overall.  This can be highly motivating.  It also informs them of what projects will be most impactful to where the business needs to go.

You can imagine how this software is useful for smaller organizations where every person’s effort matters, and there is a lack of formal process.  You can also imagine how this same type of software is interesting to much larger Fortune 1000 companies where the complexity of how each team is intertwined becomes incredibly complicated.

Use Cases for Performance Management Software

Performance management software is useful to an organization in several main ways:

  • 1:1’s: Many companies have some form of 1:1 cadence where managers will sit down with their direct reports to ensure projects are on track, there is no bottled up frustration, feedback is being given/taken in a timely manner, and that career development initiatives are being hit.  A performance management system allows managers and employees to collaboratively create agendas for 1:1s, review notes from past meetings, use pre-built conversation starters, tie 1:1s back to goals/feedback and generally get value out of these interactions.
  • OKRs: OKRs stands for objectives and key results, which can be thought of as the goals for an organization/team/individual along with the outcomes of these goals.  Examples may be something related to a key performance indicator (KPI) like decreasing customer churn.  Or, they could be something a lot more “soft” such as focus on team bonding.  Performance management software allows the organization/team/individual to list their OKRs, and then record the progress that is being made towards them.  Many times the progress of an individual or team rolls up into a larger part of the organization.  For example, if 5 different sales teams make progress towards hitting quota, then the sales function is also making progress as a whole.
  • Performance Reviews: The annual performance review is always so awkward.  As people, we have trouble remembering what happened last week, let along 6 months ago.  These performance appraisal conversions become check the box and lack any substance.  A performance management system allows both managers and employees to leave notes over the course of time about what should be in a review.  They can also tap into notes from their 1:1s (it's always good to have more frequent check-ins), and how OKRs are progressing.  Implementing a performance management system means that you can now have meaningful performance conversations on a more regular basis that results in employees ramping faster and aligning more closely to company goals.
  • Employee Performance Management: Importantly, the next generation of performance management systems is so much more than just an annual review. From onboarding to 360-degree feedback and regular check-ins with managers, these systems collect a lot more information, and then display it in the broader context of the organization. Real-time feedback mixed with advice on what to learn and what to work on can have huge impacts on your Human Resources team's talent management practice.
  • People Analytics: One of the best parts of a performance management system is that your team can now deeply understand what’s going on in any part of your organization.  Most of these solutions come with analytics that will give you insights into which teams are using the platform itself, and perhaps which need more education on the value of 1:1s, OKRs, etc.  But, much more interestingly, you’ll be able to zoom in and out on your organization to know what everyone is working on, how they align, and how all of this aligns with your overall business strategy.

Common Pitfalls for Performance Management Software

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.  

Performance Management Platform Features

The top performance management systems have key features that make this much more than an annual check the box review:

  • Check-ins: Employees want and deserve more frequent check-ins that annual reviews. 1:1's and a regular review of OKRs means that employees feel engaged, know what to work on, and know how to take control of their employee performance. The bottom line is that more continuous feedback is a huge win for the organization and individual.
  • Automation: Asking your managers and employees to take on another system is never simple. Look for a tool that automates the collection of feedback, facilitates 1:1's with pre-canned questions and scheduling, has integrations with your other HR software and tools like slack, outlook, etc.
  • Annual Employee Evaluations: The awkward annual review is dead, but that doesn't mean employee evaluations are out the door, they've simply evolved.  Take a hard look at how a new vendor is streamlining and improving this part of your talent management strategy.
  • Development Plans: It's not enough to tell someone they aren't performing (or maybe are but have room for improvement), there needs to be a plan in place with goals/OKRs that move someone in the right direction. Look for solutions that have modules to develop and track these plans, or even learning management capabilities that have specific educational material for your employees.
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Questions to Ask on Performance Management Demos

Here are some of the questions we recommend asking on demos when you get on the phone with a sales rep:

  • What is your product roadmap and how are you thinking about related HRTech such as employee engagement, recognition, and rewards?
  • How does your solution integrate with my existing HRIS?
  • What is your change management playbook to help get our employees and managers on board with this new solution?
  • How do you suggest rolling out this platform?  Which modules go first, why and on what timeline?
  • If I’m already doing OKRs and 1:1s, how much time will this save my team?
  • Is this solution designed for specific types of organizations (small businesses, enterprise / knowledge worker, retail)?
  • Am I able to export the performance management data to cross reference with other KPIs kept in other systems?
  • How does the annual performance review process work?
  • What about more frequent review processes and check-ins?

Our Best Pro Tip: Cross-Functional Buying Committees

A while back we wrote about cross functional buying committees.  If you’re looking at buying performance management software, or any hr software that requires stakeholders from across the organization to buy in

A cross functional buying committee is a group of 5-10 people who care about a given topic, in this case culture/retention.  They brainstorm, and then figure out the best way to tackle the issue is to execute some sort of initiative, in this case buy performance management software.  Realistically, there are 1-2 leaders in the group who do all the work of executing the initiative.  

But, there are some huge benefits to having this committee.  First off, getting budget for your initiative is so much easier.  You now have leaders from marketing, sales, engineering, etc on your side when you go to the CFO to get money.  They can help you pitch, and throw their weight behind the initiative.

You also have the help of every organization during implementation.  This is especially useful when rolling out a tool like performance management where individuals need to be bought into the initiative across all different functions.  Having the person from your engineering team who’s on the committee tell their team why they need to use a solution can resonate a lot more than someone from outside of the organization doing the same.

Top 6 Best Performance Management Systems - June 2020
ClearCompany
eloomi
Lattice
7Geese
Small Improvements
BetterWorks
Reflektive
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Final Advice

We hope you’ve enjoyed out overview of performance management software.  This page will change on a regular basis to reflect new learnings that we think are important to buy and implement this type of software so please subscribe to our newsletter and good luck!

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