For a workplace to grow and operate at its full potential, the evaluation of employee performance can be a significant metric to maintain.
The modern technologically managed workforce has adapted to the usage of performance management software to manage workforce performance. This blog looks into how performance management software can help employers raise workforce potential.
What Does Performance Management Software Do?
Performance management software is used by employers all over the world to manage workforce performance, boost employee productivity and make them efficient in their job roles.
The crux of this process involves engagement between managers and employees, leading to effective communication and mutual achievement of the organisational goals.
The 2023 Global Performance Management Report has shown that 90% of the companies worldwide have used some form of performance management metric to evaluate their workforce.
Therefore, for most modern organisations, performance management software can be a crucial tool.
How to Use Performance Management Software?
So, how does a performance management software work? It works by maintaining a system that tracks employee performance in a measurable and consistent manner.
The best performance management software employs a collaborative system. In this system, managers work with the workforce to set expectations, goals, and then measure the performance in comparison to the goals.
Advantages of Applying Performance Management Software
The most notable and well-known benefit of using performance management software is the increase in the productivity of the workforce.
Employees are more engaged in their work, improving commitment, reducing employee turnover and each employee’s potential is realised.
The following can be represented as the primary benefits:
- Increasing retention
- Boosting employee engagement
- Identification of development needs
- Fostering a positive relationship between managers and employees
- Promoting autonomy with accountability
The usage of performance management software can be catered to company needs. It has been observed that between 2018-2022, 80% of the global organisations using performance management systems have re-designed them based on their needs.
Thus, while the benefits of using performance management software are generally consistent, their specific definitions can differ based on organisational needs. The best performance management software provides the flexibility for organisations to revise the systems based on their needs.
The Relevance of Performance Management Software in the Modern Workplace
With a constantly changing landscape of industries all over the globe, a workforce needs to be flexible, evolve regularly and build a collaborative workplace. A 2019 Deloitte survey showed that 31% of all businesses have followed a team-based structure, confirming the need for communication and collaboration in the contemporary workplace.
Boost Employee Upskilling
In the contemporary technological business environment, most workforces are working in a constantly changing workplace. But, it is not practical to replace the workforce every time there is a change needed.
Thus, employers are practicing upskilling to enhance the abilities of existing employees. The best performance management software uses continuous management systems to help managers review employee performance.
With this valuable insight on team performance, managers can implement training and development programs to help employees optimize their performance, i.e., upskilling.
Revitalise Employee Productivity and Engagement
Effective performance management essentially drives employee engagement. A robust performance management software has the systems put in place, allowing managers to track employee performance through transparent measures.
This transparency is generated with clarity, regular feedback and promoting growth opportunities. What does this system do? It helps employees understand their roles. Thus, their engagement is improved, providing them with the motivation to be more productive.
Strengthen Workplace Collaboration and Communication
One thing that performance management software establishes is that performance management is a collaborative effort between managers and employees. Thus, both parties are encouraged to contribute openly and in a constructive manner.
Such a practice can show the workforce how communication can be a positive influence on performance.
Moreover, more workplaces are shifting towards a team-based work culture, with 65% of work in workplaces being organised across cross-functional teams. Thus, performance management measures have encouraged increased collaboration in the workforce with a focus on individual strengths contributing to overall performance.
How Can Employee Potential Be a Significant Metric in Performance Management?
As per the 9-box grid talent management system, potential is a key dimension in performance management. This metric can be significant if considered by performance management software as a workforce planning measure.
The 9-box talent management grid system defines three types of performers based on potential.
- The low-potential employee is not expected to improve as they are performing at full potential.
- The moderate-potential employee can be developed in their current role to enhance performance.
- Finally, the high-potential performer is expected to grow past their current role. They are likely to thrive in more challenging roles.
This understanding facilitates the management and growth of employee performance based on potential.
Developing Underperformers
For an underperformer, the task of the performance management software is to identify personal roadblocks.
The roadblocks will provide insight into the employee’s potential. A low-potential employee will not need to be invested in significantly. However, a moderate to high-potential underperformer can be developed.
Managing Effective Performers
Effective performers are moderate performers, most likely, working up to their potential. They cannot draw the most out of a performance management software’s evaluation.
However, since they are doing a good enough job, and understand their roles, upskilling can help them rise to a higher performance category. However, if the upskilling does not work, leveraging solutions defined by a performance management software can become challenging.
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Elevating High Performers
High performers are the future stars and generally show a great growth potential. It is them that can draw the most out of performance management systems.
They also, according to the 9-box talent management grid system, have the most upskilling potential. Not being able to tap into their potential can be a major loss for the employers.
The 9-box grid system can also be limited by its two-dimensional nature, only measuring performance and potential on two axes. This practice can often overlook other dimensions that go into employee development, which may also include an employee’s satisfaction and comfort levels, affecting motivation.
Drawbacks of the 9-box Grid System
A key issue with the 9-box grid talent management system is that it simplifies the purpose of optimising workforce performance by design. Thus, the chances may rise of the process becoming a biased one.
The 9-box system is also highly susceptible to employer bias. The 9-box grid system is completely subjective as it focuses on employee potential. Thus, the chances may rise of the process becoming a biased one.
Success Circles™: A Worthy Alternative
Success Circles™ can be an appropriate alternative which can minimise the challenges faced in the application of the 9-box grid talent management system.
Success Circles™ is a performance management software that collects every detail on every single activity on the StaffCircle platform. Thus, data analytics of the everyday interactions of employees are used to measure employee performance. This creates an accurate picture of the employee engagement and development on a day-to-day basis.
The 9-box grid system, on the other hand, categorises employees based on a combination of current performance and future potential. This process primarily focuses on the potential of employees to grow in the organisation. Essentially, comparing the current performance report with a potential future review.
Therefore, compared to the 9-box grid system, Success Circles™ undertakes a more holistic approach towards continuous growth, measuring the regular development of employees, using real-time data to measure gradual progression.
Success Circles™ also focuses on employee feedback and opinions, considering their points. Comparatively, the 9-box grid system depends on the employers’ idea of employee potential.
Hence, Success Circles™’ approach to measuring real-time employee data is a more effective system compared to the 9-box grid’s system of a company’s evaluation of an employee’s potential.
Finally, Success Circles™ uses a system that takes into consideration daily performance evaluations of employees, employee insights, skills, strengths and weaknesses. It uses a multi-dimensional system that is more comprehensive compared to the two-dimensional performance vs. potential approach of the 9-box grid system.
Therefore, Success Circles™ has the potential of being an essentially valuable modern performance management tool, when placed against 9-box, which was established in the 1970s.
Summing Up
Performance management software can leverage technological tools to develop a workforce. They can be utilised effectively by organisations by identifying employee potential, identifying upskilling needs and raising overall workforce potential.