How to Evaluate an Employee Performance Management System

There are enough resources available online that serve as a guide to HR managers to evaluate Employee Performance Management Systems. The articles that evaluate employee performance management systems compare various products on the following important areas

Features comparisons of different products.
Analytics and Reporting capabilities.
Price comparisons.
Integration support of the product with other internal systems/ products.
Availability on cloud or on premise, support extended etc.

I would like to take a slightly different approach in this article. An Employee Performance Management system may support extensive features and would be reasonably priced, but are these enough to make a decision in favour of a product? My answer would be a NO. There are a lot of instances where organizations get dissatisfied with feature rich employee performance management software. So how then should one go about evaluating an employee performance management system?

When evaluating employee performance management system, instead of looking at features the software offers, it would be a very valuable exercise to first analyze the internal needs and requirements and keep a comprehensive requirement manual ready in hand. If an organization evaluating the system is not satisfied with the existing performance appraisal software, then it would make a lot of sense to note down the pain points as a part of the manual.

The answers to the following questions can make your manual:

How many times do appraisals take place in your organization in a year?

What would be the employee selection criteria for an appraisal?

For each appraisal, what would be the required steps?(Steps like Feedback, Approval, Recommendation, Meeting etc.)

How are competencies defined and how does it apply to each employee? (It can be based on function, designation combination etc.)

Are organization goals defined? When and how are employee goals defined? Is there an alignment needed?

What would be the rating scale for competencies and goals? How are overall scores calculated?

Are there some attributes that do not require a rating / or would you need to run some interim appraisals without rating? In such cases, only descriptive feedback can be provided.

Who can provide rating during the appraisal? (360 appraisals, confidential attributes etc.)

When is interim feedback required? Is there need for automation? (like interim feedback trigger when a manager changes etc.)

What is the next step after appraisal? In case of Performance Improvement Plan how are they started and how do you track them to closure? Do you have any training requirements that have to come out of the system?

What are the pain points of the current Employee Performance Management software?
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If these requirements are available ready in hand, it would be easier to talk to an Employee Performance Management vendor with clarity. With the above information, a trial run can also be requested from the software vendor. So when you evaluate an employee performance management system, look for simplicity and make sure that the important and basic requirements are handled well by the software. Any other feature offered by the software, would just be an added advantage.

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