What is an Effective Performance Management System?

What is an Effective Performance Management System

The best way to assess productivity is through a properly applied performance management system. This system will help you have a record of the performance of each of the elements of your workforce. This tool combines modern technology and procedure to ensure the achievement of your business objectives.

In this article, we will help you know how these systems work, and what the benefits of them are. In addition, you will learn how and why companies are moving to continuous management tools from the old way. Let us see:

1. What is a performance management system?

2. Most important elements of performance management tools

3. Why do you need an employee performance management system?

4. Advances and management trends

5. Conclusions about the performance appraisal system

6. We help you implement your management process


1. What is a performance management system?


An employee performance management system allows company leaders to track performance. This type of system ensures that employees are working effectively to achieve the company goals. In addition, it allows these leaders to develop their talents to optimize their performance.

This type of system has features that allow managers to know the performance at all times. In this way, they will be able to help employees in terms of motivation and continuous participation in the procedures. Thanks to this, the company can obtain maximum results and reduce the problem of worker turnover.


1.1 Who should use performance management software

Any type of company can profit from a performance appraisal system regardless of its nature or size. However, although employees can use this system, managers or team leaders are the main users. In this case, employees can work together with managers to define their goals.

In this way, managers will be able to build system act reviews and involve employees in the review. Furthermore, the human resources team defines the processes that will support the running cycle. Likewise, they are in charge of working so that the processes are fair and the stages are carried out properly.

On the other hand, the managers, who are the advanced users, must take into account each employee within the process. In addition, these managers have the duty of managing the performance of the employees of the company.



Unlock your team’s potential and optimize performance with our software!

Make data-driven decisions and optimize performance - Request a demo of our software today!


2. Most important elements of performance management tools

The performance management system can be carried out in the cloud, on company premises, or in a situation that combines both. In the case of cloud systems, these allow various benefits to be obtained, including large storage capacity. It also allows for greater data security and addition with other applications.

In the same way, this will serve to improve learning, growth, benefit, and other systems. The management tools consist of 3 vital tasks, which include planning, monitoring, and evaluation. Next, we will give you the details about the key features of the performance management process:


    • Planning. In this first point, you should start by adjusting the performance of the employees with the goals of the company. Likewise, you must establish meaningful and satisfying jobs to increase the commitment of workers. In the same way, if priorities change, you will need to adapt the goals effectively.
    • Monitoring. Aligned to the previous point, managers must oversee the goals of each worker so that alignment with the general objectives can be met. Likewise, it must allow feedback as well as guidance to begin to improve performance. It is also very important that you point out good results when they happen.
    • Evaluation. Finally, you will need to accurately and consistently perform a final act appraisal. Through the data obtained in the performance management system, you can know the value that your employees provide to the organization. Do not forget to recognize and reward top performers to keep your workforce motivated.



2.1 Performance management best practices

To optimize the performance management process there are 2 key elements, consistency and transparency. These must be present in each cycle of management from the start to the final evaluation. Therefore, when the cycle ends, you must identify the established goals and the new ones to start other cycles.

Likewise, continuous interactions must take place not only during the evaluation stage but throughout the work cycle. Also, such interactions about performance should be open and calm. In this case, both participants must dedicate to perfecting the skills that improve the communicative exchange.


3. Why do you need an employee performance management system?

Companies today face different challenges than in the past, as well as greater complexity. Apart from performance and production, adaptability, innovation, and communication are also important to be successful. Therefore, focusing on non-continuous performance management is not effective for modern companies.

Thanks to the continuity of the evaluations, companies can obtain data and progress in real-time. In this way, with a performance management system, companies can adapt and boost the performance of their employees. Therefore, leaders of business organizations need this type of system for the following reasons:


    • Get accurate performance metrics
    • Know personal and professional goals
    • Show that you value the work of your employees
    • Train your workers effectively to close skills gaps
    • Establish the foundations of trust between managers and employees
    • Increase worker morale
    • Reduce rotation
    • Drive the best results for your company


For these and other reasons, most businesses have made changes to make the management process more seamless. In addition, with the implementation of these systems, you will begin to notice effective changes in the performance levels of your employees.


3.1 What should you look for in an employee performance management system?

The best HR management systems should offer you the benefits that help you implement initiatives most appropriately. In addition, you will be able to maximize the performance of your employees to achieve all your objectives. Therefore, we will show you the features that these tools should have and what you should focus on:


    • You should allow your team to keep track of the goals they have set.
    • Allow your managers to have performance conversations regularly with effective results.
    • Facilitate the recognition of the achievements of its workers without any distinction.
    • Look for software that allows feedback to improve the evaluation cycle.
    • The system should help you keep an eye on the metrics that define talent
    • Train your employees continuously, to strengthen the connection with the company
    • Understand the full picture of the performance appraisal for effective training


You should find out if any of the performance management tools on your list have these features. Therefore, you should check with your provider if what they offer you can meet these traits. In this way, you will be able to obtain every benefit of these systems or improve the methodology that you have in your company.

Simplify your performance management process and save time!

Say goodbye to manual performance tracking - Opt for our automated software!

4. Advances and management trends


Companies are changing the way they manage employee performance, as they adapt to new management methods. Next, we detail how changes in the performance management system in business are being seen.


4.1 Ongoing management

Companies are changing from the traditional management system to one of greater continuity. This type of management (known as CPM) allows for more frequent participation by both managers and employees. Through regular one-on-one interactions and feedback, they keep workers up to date.

The CPM strategy allows managers to easily track the achievements and weaknesses of employees. They can do this by addressing problems at the specific moment in which they occur. In addition, you can adjust if the objectives change and thus have a more efficient work model.

In the same way, employees will be able to know their performance regularly instead of having to wait a very long time. This way, they will be able to notice their achievements and receive the rewards at the specific time when they occur. Likewise, the continuous performance appraisal system speeds up the cycles to improve management.


4.2 Field workers

These types of workers, also known as workers without a desk, are those who perform their tasks outside the company. In this case, they only have intermittent access to the internal systems and communication channels of the organization for which they work. This sets them apart from remote workers because the latter positions have full access from their workplaces.

Since these workers have a different nature from the regular ones, it can be hard to fit in with the existing ones. Therefore, companies must consider workers in their performance management system to support them.


4.3 Proactive teams

The performance management tools of todaymust be able to easily adapt to changes, including team dynamics. Dynamic models have certain characteristics that differentiate them from traditional and agile models. The features of a dynamic model management system are as follows:


    • Self-manageable. In general, no leader has been formally assigned.
    • Workflow. These are fast changing and adapt with the introduction, implementation, and modification of new ideas.
    • Cross-functional membership. These generally occur in the process of change.
    • Organic structure. This type of team, once the project is completed, dissolves.



5. Conclusions about the performance appraisal system

The performance management system is an element that will benefit any company that implements them. This type of system allows the company to have an effective model to measure the performance of its employees. In this way, you can have feedback to measure the achievement of the objectives of the company.

This is because performance management software will allow you to solve any of the following problems:


    • Employee turnover due to lack of recognition and rewards for your best employees.
    • Lack of adequate methods to improve the compensation, promotion, and termination of employees. Commercial and economic losses with practices not aligned with the interests of the company.
    • Inability to justify decisions in case of conflict.


With an integrated system to know in detail the development of employees, these and other similar situations can be avoided.


5.1 Summary of the performance management process

The management process consists of a series of stages to carry out a complete evaluation in each cycle. Unlike the traditional methods that are carried out in certain periods, the continuous model involves a more frequent process. The stages involved in the process to evaluate the performance of your employees are the following:


    1. Planning and acting to manage the objectives.
    2. Continue management supervision.
    3. Evaluation and recognition for the achievement of objectives.



5.2 Integration of the performance management system

The management system must provide greater value to the company as the main objective of its implementation. Therefore, it must be integrated with all the means involved to optimize manual processes such as payroll management or legal matters. In this way, interrelated systems allow a broader vision of the processes.


5.3 Alignment with laws

Performance management software must go beyond the interaction between managers and workers. In this sense, the system must also allow the union with other tools for compliance. Some of them involve record keeping, information security, and other elements for compliance with government laws.



Transform the way you manage your employees’ performance

Get real-time insights on your team's performance and take informed decisions with our software!


6. We help you implement your management process

The implementation of this type of system will allow you to improve in each of the mentioned aspects. In this case, we can help you to implement a management system suitable for the needs of your company. Our organization offers several services to your company, including the following:



Thus, if you need to improve your performance management process, just contact us. You can do it through our means of contact, one of them is the number +971 43 316 688. In the same way, we also have the email [email protected] to communicate with us and receive the answers you need.

If you are a professional looking to work for the best companies in the Middle East, thetalentpoint.com website is for you. The first thing you should do is enter it and register to find the option that fits your profile. Once this is done, you can upload your resume or send it to [email protected].


Connect HR
Connect HR