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Key Features of Performance Management Software

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Performance management software is used by more or less all companies with a large number of employees. It is an essential system or process that enables your employees to do their best work.

However, when an HR manager is tasked with finding the right performance management system for their company, most don't know where to start. You get lost in the sea of performance management software features and struggle to figure out which ones are most important.

Gone are the days when companies could simply give their employees a performance certificate at the end of the year and expect results. Today's practices require more real-time and continuous feedback, which in turn means that the business requirements for a performance management system to access employees have evolved.

So what features should a PMS have for your business? Here are 5 features to consider when choosing performance management software for your business.

1.Target setting

The ability to create dynamic goals is paramount for any performance management software. It is the basis for evaluating the performance of employees in the company.

If goals for your employees are not set properly, managers or HR will have no parameters to evaluate employee performance. However, when done correctly, goal setting can help improve employee engagement in a way that increases their performance and benefits the company.

When implementing a performance management system, it is important to build in goal setting functionality so that users (e.g. HR managers, managers, and employees) can add goals, track progress, and receive updates on the status of goal achievement.

Enabling SMART goals (Specific, Measurable, Achievable, Results-oriented, Time-bound) through performance software can help achieve organizational goals. Additionally, being able to monitor and record their performance against set goals can motivate employees to work harder.

2. 360 degree feedback

360-degree feedback is one of the preferred and increasingly popular features in a PMS to support employees. It helps improve employee performance by collecting information about their performance from different groups.

Unlike the typical feedback structure that follows management hierarchy, 360-degree feedback requires responses from multiple sources. It is usually collected anonymously to avoid rating inflation. The answers about the employee's performance can come from his superiors, his junior employees and his colleagues.

360-degree feedback is most useful to employees when used solely for developmental purposes and not for administrative purposes. This is because people are most likely to be honest when they know that the information they provide will be used to improve the person, not to punish or reward them.

The best thing about this feature is that you don't have to sit down and have a face-to-face conversation with each person; instead, all feedback can be recorded electronically.


As the name suggests, this feature allows your employees to evaluate their own performance based on pre-determined parameters.

It ensures that your employees can evaluate and review themselves on the tasks they have worked on in a given period of time. Employees can view their performance based on parameters such as the number of goals achieved, additional contributions beyond the established KRAs (Key Responsibility Areas), etc.

Since employees can review and measure their performance against the set goals and KPIs (Key Performance Indicators), this helps them stay focused and motivated.

The self-assessment feature enables your employees to think critically to improve their performance.

4. Reporting and Analysis

Reporting and data analysis are among the most important functions of performance management software, which can help summarize and meaningfully evaluate the data collected about the employee's performance. This feature achieves the maximum benefit of the performance management system through visual representation.

With the reporting feature available in a PMS, managers can note key points while having regular conversations with employees about their performance. This feature in the performance software can help the manager to easily record ideas or suggestions that are discussed during the meetings.

The reporting function is an excellent tool for continuously improving employee performance. It allows managers to track employee performance throughout the year and can help make annual reviews much quicker and easier.

Once the reports are available, managers should also have the ability to analyze the real-time data about their employees. For example, when training is conducted for the team, the manager wants to measure the impact of the training on the performance of the entire team and an individual. With the right analytical tools, managers can monitor trends and immediately identify discrepancies.

5.Development plans

This feature of performance management software enables the managers to take detailed actions to improve employee performance.

Achieving the goals set out in the development plan allows employees to keep up with changes in their field or profession. It allows you to answer the following questions:

  • How can I continue to learn and grow in the coming year?
  • How can I work better in the future?
  • How can I avoid performance issues that occurred in the past?

Companies that care about their employees should provide them with opportunities to develop their skills. This will further motivate employees to improve their performance.

Typically, the development plan features available in performance management systems allow employees to upload their own competency development documents. Some of the best PMSs even offer access to externally available online training that can expand employees' knowledge in their area of interest.

In today's dynamic work environment, robust performance management software is indispensable. IceHrm offers a comprehensive solution tailored to meet your organization's needs. Elevate your performance management process and empower your workforce with IceHrm.

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