Performance management methods and tools

Performance management is the most critical task of an HR manager. Employees performance management is incredibly effective to increase productivity. Many times, employees happiness and motivation fall off due to improper performance management and appraisal. If you are an HR manager and have problems evaluating your employees, do not skip this article. This blog will elaborately discuss the best performance management methods and tools.

What is Performance Management?

Performance management is a process to lead the employees towards achieving a collective goal. It is an ongoing activity. Typically, performance management includes the delegation, monitor and evaluation of the activities of an individual employee or a team by the manager. But in a real sense, performance management is much more than that. A productive performance management system is a long-term collaborative process between the employees and the supervisor that helps the team achieve a strategic target. Today’s performance management system prioritizes delegation over the assignment, mentoring over monitoring, empowerment over micromanagement, and motivation over demoralization. Finally, performance management is a communication-based process where the employees and the manager collaboratively plan, review, and execute the company’s strategic goals. Moreover, The best performance management methods and tools should align both the employees and employers to achieve the organizational goals in a collaborative, amicable and efficient manner.

Best Performance management Methods

Employees are the key to the success of an organization. Therefore, the prosperity of an organization depends on the performance of its employees. In order to achieve success, all the employees need to be heading in the same direction in a motivated manner. Here comes the necessity of proper performance management. A productive efficient performance management system makes the team happy, and when the team is happy, they perform better. Here are the best performance management methods and tools that can help you to increase the productivity of your team.

The 5As Approach to Goal Setting has described how the 5As test can replace the SMART goal setting concept. According to them, the 5As concept is more effective for setting collective goals in a com­plex, col­lab­o­ra­tive and rapid­ly-evolv­ing business world. Here the 5As stands for i) Assemble ii) Aspirational iii) Aligned iv) Accountable, and v) Agile.

1. Assemble

Assemble is a synonym of measurable. An objective or goal can be described as efficient when it can clearly be measured.

2. Aspirational

An objective or goal must express high performance or outcome. Many managers possess a conservative mind and are afraid to set a high target for their team. It is not an ideal approach. Because when your target is big, it will spark a fire in your team towards new growth.

3. Aligend

This goal-setting approach states that all the individual goals should be aligned with the organization’s overall goal. More specifically, every small goal of the organization should be a part of the company’s ultimate vision.

4. Accountable

Every individual employee should be accountable for the goal, which means the success or failure of any specific goal should be considered as the success or failure of the employee.

5. Agile

The goal should be motivational and meaningful. More specifically, every goal should be divided into small milestones so that the employee can clearly understand what they need to achieve in the next three or four months.

Key Performance Indicator (KPI) and Matrix

Key Performance Indicator (KPI) demonstrates the performance of an individual, team or company in relation to their strategic goals. It is a performance measurement tool usually used for employee performance appraisal. Under this process, the employer defines some performance indicators for each individual or department and then assign value for each indicator. At the end of a certain period, the manager can evaluate how many numbers an employee has got in an area. Furthermore, it helps a manager to evaluate the performance based on the KPI. It is also used to measure companys’ expected outcomes versus the actual results. Nowadays, many companies use business analytics software for performance analysis.

Management by Objective (MBO)

Management by Objective (MBO) is a concept where the objectives of an individual employee are defined based on the company goal. Under this concept, the goal of an organization or team has been divided into several objectives, and then the management distributes the objectives to individual employees with an expectation to achieve each objective. It is a handy approach because it allows the manager to evaluate who could accomplish the goals and who could not. It also motivates the contributors as they can see their contributions. In a nutshell, MBO is a process of assigning specific objectives to each employee, later graded with group input.

Reward and Recog­ni­tion Schemes

Reward and Recog­ni­tion are essential tools to motivate the employees and uplift their performance. It is and process where the employers recognize the performance of the employees with monetary and non-monetary benefits. More specifically, reward and recognition amplify the excellent performance of any employee or team with some extra benefits other than their regular compensation. An effective reward and recognition scheme should be closely linked with the ultimate goal of the organization. It helps the employees to know what their employer expects from them and what they will get when they meet the expectation.

Real-Time Feedback

Employees’ feedback allows employees to give their constructive opinion regarding the overall organizational activities and culture. However, employee feedback also includes the feedback of the subordinates regarding their manager or supervisors. Employee feedback helps both the employees and the organization. The employees can understand which areas they need to improve when they get regular feedback from their employers. On the other hand, the organization get some constructive suggestions when it allows the employees to express their opinion.

Top Five Performance Management Tools

This part of the article will provide you with a list of the five best performance management tools, in my opinion. However, the best performance management tools can be varied from person to person depending on the size, nature and activities of the company. Here we’ve prepared this list based on our experience and hundreds of users feedback.

1. OrangeHRM

OrangeHRM is a performance evaluation software with the option of collecting employees feedback. This software is really useful if you are looking for something that engages employees with the companys’ goal-setting process. OrangeHRM enable employers to set yearly, semi-yearly or quarterly goals for the individual employee and keep track of their performance through the goal tracking system. Apart from performance management, OrangeHRM also offers HR Administration, Employee Management, Reporting & Analytics, Recruitment (ATS), Payroll Connector, Time Tracking etc.

2. Appraisd

Appraised is a pure HR and performance management system with cool features to make your life easy. It offers almost everything from employee attendants to evaluation that a company need. Some of the major functions of appraisal are 360-degree performance management feedback, Peer appraisal, Onboarding, Continuous performance tracking, Self-assessment, Employee development plans etc.

3. is basically a workflow management tool. But it also has a lot of useful HR features. Again, it is not pure HR management software, but it can be useful if you are looking for workflow management software with some HR tools. Some HR management features of this software are surveys, tests and quizzes, and sending these to employees etc.

4. Kissflow HR Cloud

Unlike, Kissflow HR cloud is a workflow management software. Kissflow has different portfolios like digital workplace, procurement cloud, project management and workflow management. The key features of Kissflow are approval management, employees and recruitment management, procurement process, finance and billing, help desk, incident management, custom workflows etc.

5. Namley

Namely is a human resource management software. If you are running a large business then this software is not for you. It is more useful for small scale businesses. Namely is helpful for streamlining HR processes by having people, payroll, and benefits info all in place.

Summary of the best Performance Management Methods and Tools

This list of the best five performance management tools has been made based on our personal experience and the feedback of hundreds of users. However, you may have your own favourite list of top performance management methods and tools. Please let us know in the comment section if you have a better choice.