How to identify the best employee performance management tools for your business

Oli Robertson
Last updated on November 24, 2023

With a whole host of different options on the UK market, all doing broadly similar things, it can be challenging to identify the right employee performance management tools for your business. Your employees’ progression and development, not to mention the contribution they bring to the team, depend on having easy-to-use, reliable performance management tools and techniques at your fingertips. 

This article will cover what UK HR teams should look for when shopping around for a new performance management tool, as well as a few examples of performance management tools in action.

What are performance management tools?

Performance management tools are a type of HR software used to plan, monitor, develop, rate and reward your people, in a consistent and measurable way. They enable a two-way dialogue between manager and employee, with both able to provide feedback on the other, and to self-assess performance at the same time. Many of the tools on the UK market also facilitate cross-departmental reviews and feedback (also known as 360-Degree feedback).

They are a step up from the traditional method of conducting employee performance reviews via an Excel spreadsheet, with a list of goals alongside comments and score boxes. Typically, modern examples of performance management systems are cloud-based, meaning a UK manager or employee can access everything via a secure login from anywhere, at any time.

What should HR teams be looking for in a performance management tool?

Just as with any software investment, there are several ‘need-to-haves’ that a particular performance management tool should possess to justify purchasing it. These are the non-negotiables, the things that every scaling UK business needs in order to help its people (and those who manage them) grow and prosper. 

The best performance management tools will come equipped with your ‘need-to-haves’ as standard, as well as plenty of ‘nice-to-haves’ too. The key is to weigh up the cost vs. value, and then to decide on what the priorities are for the growth of your people. So let’s dive into it.

A sound cost vs. value ratio

Employee performance management tools vary in price, and there are some free (albeit limited) options available on the UK market. It’s important to have tools in place that can scale with your business, and free options don’t do this. 

Of course the cost is a major factor in determining which software you choose. Assess what you can’t do with your current setup, and whether any additional costs will help you be able to do them, or indeed you can live without the extra capabilities. The cost vs. value consideration runs through all of the following characteristics of a prospective performance management tool to look out for as well.

User-friendly platform

Simplicity is key when it comes to effective performance management tools and techniques. It may sound obvious, but your chosen performance management system should be easy to use both for managers and employees.

Customisable…but with templates for common campaigns

As UK businesses scale, additional roles and responsibilities start to take shape. This demands a performance management tool that is flexible enough to meet the needs of all functions within the organisation. For ease of setup, and to save time, it’s also important that your chosen solution offers a range of common performance review templates, for example 1:1, quarterly review, exit interview, end-of-probation period and so on.

 

Built to enable dialogue

Effective performance review processes rely on two-way communication between managers and employees. It’s important that feedback is being relayed to the employee so that they can receive recognition for good work, course correct if certain areas need attention and to set goals and objectives. The same can be said for managers, because being the best they can be translates into great individual and team performance. So it’s important that your performance management tools support open communication.

360-degree feedback functionality

Sometimes it’s difficult for managers to get the full picture of an employee’s performance, especially in the hectic surroundings of a scaling UK business. With team members working across departments, it’s highly beneficial for any performance management initiatives to get insights from a worker’s peers, their subordinates, and contacts across the organisation. The best performance management tools allow managers to assign different reviewers for each campaign, helping promote feedback between different teams to break down silos, increase collaboration and streamline processes.

Action-oriented

It’s all well and good providing feedback, setting goals and then assuming they’ve been taken onboard. But the success of any performance management campaign depends on actions being taken. Your employee performance management tools should be equipped with invitations, reminders and deadlines, so goals that are set are coupled with obligations for the individual in question to take action towards achieving them, indeed to participate in the review and feedback process in the first place.

It may be that your chosen tool allows employees to set an overarching key result, with objectives living under those. This means that in order for them to achieve the result, the objectives have to be met first, compelling the employee to take action via methodical steps.

Integrates with or lives alongside other software and functionality

Workflow automation helps improve employee productivity, as well as their wellbeing. So it makes sense to ensure that your performance management tools are equipped to sync up or integrate with the rest of your HR tech architecture, or at least offer an all-in-one solution. This helps to minimise the amount of double data entry, and means that participants can access their performance management campaigns in the same place as, for example, annual leave requests, expenses management and payroll information.

employee performance management tools

What are some examples of performance management tools?

There are a wealth of performance management tool examples that we could talk about, but for this piece we’ll pick out a few of our favourites, that make for excellent options for small to medium sized and scaling businesses.

Leapsome

We love Leapsome’s moniker of being a ‘people enablement’ platform. Integrating with a wide variety of other HR software platforms (ours included), Leapsome offers both template-based and customisable campaigns across 360-Degree reviews, employee engagement surveys, and goal setting. The focus with Leapsome is very much on the development of the employees using it, and how this can enable them to become valuable assets not only to themselves but to their team and wider organisation.

 

Personio

As well as offering performance management capabilities, Personio takes a more all-encompassing approach to HR software, with time tracking, absence and even compensation management functionalities. It is a Leader in G2’s Mid-Market Europe for Core HR matrix, as it includes an innovative and smart Help Desk solution.

 

PayFit

We’re all about removing the legwork from review campaigns, with performance management software that requires less effort, gives you more control and is simple to use for all concerned. Managers can create campaigns in a matter of clicks, and define who needs to participate, set timeframes and assign other managers (for example, HR) to review results.

Employees can see performance review campaigns in the same place as their payslips, annual leave requests and expenses, for ease of use. And our 1:1 feature allows managers to set the frequency of catch-ups to improve engagement and transparency.

Find out more about our performance management module, as well as how we simplify payroll and other HR processes for small to medium sized businesses, by booking a demo with one of our specialists today.

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