Modern performance management standards have changed quite a bit in a relatively short space of time. In place of isolated, annual review cycles, we now have continuous feedback tailored to the individual. Of course, you need the right tools to keep the wheels turning smoothly. That’s why we’ve written this guide on how to evaluate performance management software.

Today, we’ll be covering why software evaluation matters, the essential criteria for good performance management software, and the various considerations necessary to find a system which is the right fit for your business.

The importance of evaluation

Having the right performance management software is absolutely essential for long-term success. For one thing, performance management tools can only be effective if everyone is using them properly.

According to McKinsey, companies that focus on employee performance are 4.2 times as likely to outperform competitors. To support performance with software tools, you need employee buy-in, which is the measure of their interest in and acceptance of new tools or policies. To secure buy-in, you need software that’s both easy to use and effective for its intended purpose.

There are plenty of challenges to deal with when choosing software, such as:

  • Assessing the time needed for implementation.
  • Choosing between affordability and extensive functionality.
  • Convincing stakeholders about software effectiveness.

Ultimately, learning and performance management hinge on giving managers the tools to deliver informed, individually personalized feedback, and employees the tools to engage with said feedback meaningfully.

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Key criteria for evaluation

Whether you’re evaluating Perform365 or some other option, there are a few essential bases to cover. If you’re not sure how to evaluate performance management software, these key criteria offer an excellent starting point.

Evaluation criteria #1: Functionality

When it comes to performance management software evaluation, specific tools and features are usually the best place to start. Essential features for employee performance tools include:

If a platform doesn’t offer those three things, it’s not worth your time. There may also be other kinds of features you’re looking to benefit from, like 360-degree feedback or gamification. You also need to make sure tools like feedback and goal setting suit your needs. For example, anonymous vs transparent feedback, or SMART Goals vs OKRs.

Evaluation criteria #2: Ease of use

If you want everyone to engage with performance management tools properly, they have to be easy to use. Even if you train people to use the system, they’re not going to waste time on something overly complex and non-essential to their jobs.

Remember we said earlier on employee buy-in. It’s much easier to win over employees if the tools you ask them to use are quick and easy, like an employee check-in for performance that takes only minutes to complete.

Then there’s workflow disruption. Time-consuming performance management policies are always a tough sell. Look for software that can streamline key functions, like how our platform automates up to 90% of performance conversation processes.

Evaluation criteria #3: Integration capabilities

Unless you’re building a business from the ground up, you’ll already have existing HR software and comms tools you’ve been using. Even if your chosen performance management software comes with in-built features, you might not want to throw out your existing infrastructure.

That’s why you need to look at the integrations offered by any software provider you’re considering. Integration with your preferred HRIS and HCM tools is the bare minimum, but by no means the limit.

Take performance management in Microsoft Teams, for example. An MS Teams integration allows for performance management in the flow of work, minimizing disruption to employee routines.

Evaluation criteria #4: Scalability

When it comes to performance management, development and workforce planning, scalability is an inevitable concern. While hands-on, personalized, continuous feedback may be manageable with a handful of employees, it’s less so with larger numbers. That is, unless you have the tools to support it.

While there are plenty of enterprise-level performance management tools on the market, there are also solutions aimed more firmly at SMBs. Key scaling features include:

  • Streamlining and automation
  • More advanced and extensive analytics
  • Enterprise-level custom pricing

Evaluation criteria #5: Reporting and analytics

It’s not enough to simply administer performance management. You have to be able to critically reflect on the process. The best AI-powered performance SaaS should have powerful analytics and reporting capabilities.

Simply put, this means taking performance management data, like goal tracking and feedback insights, and using it to establish trends. Some of the best tools use AI reporting to find and compile insights. Speaking of AI, some platforms even use sentiment analysis for engagement insights that can add more depth to your understanding of employee performance.

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Cost considerations

Justifying potential costs is arguably the most intimidating hurdle when trying to pitch new performance management software, and with good reason. Let’s look at the various cost considerations you’ll need to make.

First, there’s the up-front price tag. You need to know what it’ll cost to license software for your business requirements, as well as your budget for new software. While some software providers are transparent on pricing, many require you to get a quote from them directly.

Price models can vary quite widely, although SaaS-based options are more common than single payment software. Providers may also offer different price tiers with additional tools and features, or more extensive customer support.

In terms of how to evaluate performance management software, you need to calculate the ROI versus investment for a software provider. By looking at a platform’s capabilities and its reputation with users, how much of a difference can it make and is it enough to justify the costs?

How to evaluate performance management software

Vendor support and training

You’ll need to be sure your vendor can support you through implementation and beyond. The success of performance management software can hinge on the quality of its customer support. After all, you’ll have to rely on them in the event of a malfunction.

That’s why you should research vendors carefully. Even if your chosen platform is, say, a G2 leader for performance management software, you should still look for user reviews and case studies. If a vendor is known for lack-luster customer support, you can bet people will complain about it.

You’ll also need to bear in mind the training requirements for the software you pick, especially since it won’t just be one and done. You’ll need to include said training in the onboarding for all new hires going forward.

Steps to conduct a software demo

To wrap up our list of HR software evaluation tips, here are some key steps to preparing for and going through a software demo:

Request all the demos you can

Even if you have a clear front-runner in mind, schedule demos with as many providers as possible. Even if you aren’t swayed by any of the other options, they provide a valuable contrast that can inform your decision-making.

Questions to ask include:

  • Is a live product demo with a sales rep available?
  • Is a product demo video available?
  • What tools do I need for demo access? (e.g. Microsoft Teams, Zoom, etc.)
  • How long will a demo take?

Note your most wanted features

With so much to focus on during a live demo, you may need to pick areas to explore in detail. If you’re interested in a particular feature, make a note so you can remember to ask about it during the call. This could be a core function, like continuous feedback through employee check-ins. It could also be a useful supporting feature, like talent mapping and succession planning.

Feature questions to ask include:

  • Who has access to these features?
  • How do you support UX with these features?
  • What is it like for a system admin managing these features?
  • What role (if any) does AI play?

Make sure you clarify costs

As noted, many SaaS providers use opaque pricing models. If you’re going to the trouble of scheduling a demo, be sure to secure a quote for your business while you’re at it. You should also ask about any secondary costs that may crop up along the way.

Cost questions to ask include:

  • How much would it cost for an organization with X employees?
  • Do you offer custom enterprise pricing?
  • How long will the software take to implement?
  • How easy is it to import existing performance management data?

Keep IT in the loop

As the gatekeepers of performance management software, IT is responsible for setting up your system and making sure people can access it. As such, you should keep them involved, either by getting answers to their technical questions, or having them sit in on the demo call.

IT questions to ask include:

  • How do user permissions work on your platform?
  • What security and compliance measures do you provide? (e.g. SSO, data encryption, etc.)
  • Can your platform’s API be customized?
  • What support do you offer during setup?
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Take a systematic approach

When it comes to how to evaluate performance management software, it’s best to be comprehensive. Learn as much as you can about each individual feature, and find points of comparison with competitors to discover potential weaknesses.

We recommend doing this with total confidence because, with Perform365, we put our money where our mouth is. We offer an agile blend of performance management tools designed for ease-of-use, and dedicated customer support.

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