Last Updated: December 7th, 2023

Why HR Needs Performance Review Software

Why Hr Needs Performance Review Software

Every HR manager knows the importance of employee performance in the success of an organization.

However, fostering a high-performance culture is not possible without adequate training, strategic goal setting, and, most importantly, consistent and holistic employee performance reviews.

Most organizations conduct annual employee performance reviews to assess the alignment between the employees and the organizational goals. While annual reviews can be great, they do not provide the ongoing feedback that is necessary for a growing business.

A survey conducted by PwC said that approximately 60 percent of employees prefer to get performance feedback on a daily or weekly basis rather than annually.

A solution that can be incredibly useful in such a scenario is performance review software. These innovative tools are being embraced by many fast-growing organizations these days, as they can be used to review the performance of employees from a multidimensional perspective.

In this article, we will discuss how employee performance analysis software can benefit HR professionals.

But before we get to that, it’s important to understand what employee performance review software means.

What is performance review software?

Performance reviews are very important for employee development in an organization. Employee performance reviews generally consider various aspects of employees’ performance, like their challenges, areas of development, and the way forward.

They are essentially done to ensure alignment between the goals of the organization and the employee.

Most organizations already have an established employee performance review system, which usually follows the annual system.

Organizations prefer to conduct annual reviews as opposed to frequent reviews, as the latter requires greater commitment, bandwidth, and effort.

But the problem with annual reviews is that their impact is limited:

  • They are ineffective at addressing challenges and don’t give the employees adequate space to improve. This can lead to a decline in their motivation.
  • Since the objectives and goals of an organization can change from time to time, annual reviews are not the best when it comes to relevance either.

This is where an employee performance review software comes in. This software helps in augmenting the efficacy of the performance review process by providing the employees with ongoing feedback.

A performance review software can offer HR professionals a range of features like automated roll-outs, customized reviews, follow-ups, etc.

This tool can be used to generate insights, compare performance, gather feedback, and plan the road ahead in a strategic way.

Why should HR use Performance Review Software?

Performance review software is incredibly useful for HR professionals, as they can use this tool to set some predefined standards for different levels in the organization. This allows them to compare the performance of each employee against their job criteria.

Performance review software can also be used to maintain a record of employees’ performance throughout the whole year. This makes it easier to assess their performance at the end of the year for the annual review.

When employees are not clear about their goals in the organization, they cannot contribute as meaningfully as they should. Employees need to understand their objectives in terms of productivity and performance.

Performance review software can help set smart goals for employees while aligning them with the organization’s goals. Employees can then use this tool to track their achievements and progress.

Benefits of Using Employee Performance Review Software

All organizations can benefit from using performance review software, no matter their size. Here are 7 main advantages of using this tool;

1. Year-Round Monitoring Tracking

In the standard system of annual performance reviews, an employee’s performance is often filled out on the spot.

There can be chances of greater bias in such a scenario when the HR managers might fail to take past performance into account. A performance review software, on the other hand, tells the story of the year-round progress of an employee. This makes it easier for HR to monitor their development.

2. 360-Degree Review

Performance review software is best for providing comprehensive 360-degree feedback about the employees’ performance. This allows the HR managers to review the employee performance from all angles, taking into account –

  • Feedback from peers.
  • Feedback from managers.
  • Feedback from customers

A 360-degree review of an employee’s performance gives the HR professionals a better picture of their strengths and weaknesses.

3. Automatic Reporting

Performance review software also allows easier storing, printing, and distribution of performance reviews. It essentially makes the job of HR professionals significantly easier as they do not have to manually work on extensive reviews.

The information that is collected throughout the year simply has to be compiled and presented in the desired format.

4. Goal setting

Since performance review software gives a more rounded view of the employee’s weaknesses and strengths, it allows for better goal setting, both at the individual and team levels.

It gives the HR managers an opportunity to determine how best to fulfill the development and training needs of different employees. It also makes it easier to set individual and team performance goals.

5. Makes way for employee recognition

Performance review software is very valuable for employees as it essentially gives them ongoing feedback on their performance.

Many employees often prefer to get negative (constructive) feedback rather than no feedback, as it allows them to make adjustments to their performance.

6. Frequent reviews

Performance review software provides more flexibility to HR professionals, which allows them to come up with more frequent reviews.

The greater flexibility means that they do not have to write the reviews under the time constraints of the office.

7. Reduces stigma around performance reviews

Performance review software has also been instrumental in reducing the stigma around the procedure of employee performance reviews.

When the system of bi-annual or annual reviews was followed, both employees and employers dreaded the procedure.

This is because a lot was riding on the performance reviews, from salary hikes to promotions. With the performance review software, however, feedback was provided more frequently.

Wrapping Up

As a greater number of organizations shift from traditional methods to innovative alternatives like performance review software, carrying out employee performance reviews has become automated, efficient, and customizable.

A solution like performance review software is essential for HR managers to gain a better picture of the performance of hired personnel at all times.

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