A guide to performance management in a digital HR context

Helping your staff to achieve their best is a crucial part of running a business. Doing so relies on clearly communicating expectations, providing the resources and support required to succeed, and actively tracking progress: a process known collectively as performance management.

Traditionally, performance management is centered around yearly reviews. Employees would be appraised once a year - or at regular intervals through the year - and discussions about remuneration would likely follow.

But did you know:

• 22% of millennials would rather call in sick than have their annual review?
• 90% of managers believe their review process doesn’t yield accurate results.

It’s no wonder then that a wave of companies are ditching the annual review model in favour of something that fits better with the needs of employees and employers alike!

HR performance management software has become more powerful and more readily available in recent years, offering greatly improved performance management processes to companies willing to make the transition.

In this post, we’ll take a look at the change and benefits such software can deliver.

Digital tools for performance management

An up-to-date performance management definition would most likely lose the periodic aspect of the traditional one. This is because digital performance management tools allow regular, even ongoing monitoring and assessment of an employee’s performance. 

The digital underpinning of performance management also makes it easier for different people within an organisation to provide feedback: gone are the days where reviews were just a conversation between an employee and their manager; now, everyone can contribute, from teammates to managers to external stakeholders (this is known as 360° feedback). Add structured self-assessment to the mix and you’ve got a way to keep performance at the forefront of your employees’ minds while they work.

As we said in another blog post, “digital transformation is really just a shorthand for creating new ways that allow staff to collaborate, innovate, share, and foster greater productivity.”  Done right, performance management in a digital HR context stands to be more powerful and provides more opportunities for meaningful growth than ever before.

Digital performance management: what you need to know

This section covers key information an organisation will need to consider when planning to modernise its performance management processes.

What is digital performance management?

Digital performance management refers to the use of performance management software to refine the review process.

Underlying performance management models and processes are an integral part of the picture. HR performance management exists to facilitate these, by providing organisations with the tools they need for their implementation.

What is the purpose of digital performance management?

The purpose of digital performance management is primarily to monitor, assess, and strengthen the performance of employees within your organisation. 

One way to achieve this is to set objectives and key results (OKRs) for each employee that are aligned with wider company goals and use digital performance management tools to track these.

More information about the role and nature of performance management can be found on the CIPD or Acas websites.

What are the benefits of digital performance management?

There are many benefits, for both employees and employers. For the former:

• Employees feel involved in the process thanks to self-assessment opportunities
• They have a better perception of their role in the company thanks to 360° feedback
• They have a clear understanding of what’s expected thanks to agreed OKRs 
• They can get remote, real-time feedback through shout-outs, acknowledging performance even when working remotely
• These factors combine to reduce anxiety and foster a sense of belonging 

For employers:

• Increased employee buy-in improves engagement with the review process
• Input from across the company increases the level of insight available to draw on
• Review cycles can be streamlined and automated with slick automation tools
• Review templates can be created, shared, and refined to ensure procedural consistency

Who is responsible for performance management?

Traditionally, an employee’s manager was responsible for carrying out performance management. It’s quite likely that a manager or equivalent senior role will carry out a face-to-face review, but as we’ve said, multiple people can contribute to the process.

The HR department is often responsible for designing and maintaining performance management policies and plans, and for offering relevant training to managers who will conduct reviews.

How can you improve the performance management process?

The first step to more effective performance management is to evaluate your current processes, identify gaps and weaknesses, and outline ways to address these. Our guide to HR transformation will run you through the steps required.

A key part of the process is to identify HR performance management tools that will support and deliver these refined processes. Software exists to facilitate processes and choosing the right software to underpin your systems can be the difference between successful implementation and disaster.

Strengthen your performance management

AppogeeHR’s performance management tools have all of the features mentioned above. Our HR software is designed from the ground up to empower organisations to strengthen their processes, improve their results, and help their employees to achieve their best.

We’d love to show you our software in action: why not book a demo, or try it yourself for free for 14 days.