Discover the big disconnects in performance management today in the 2024 State of Performance Enablement report.

Enterprise Performance Management Tools Aren’t Created Equal: Here’s How to Pick the Best

By Betterworks
May 13, 2021
5 minute read
Enterprise Performance Management Tools Aren’t Created Equal Here’s How to Pick the Best

Rethinking performance management is top-of-mind for many executive teams. As the world of work changes at a rapid clip, leaders are focusing on how to implement agile practices that allow large, enterprise organizations the same deftness as a small start-up. 

A hugely important contributing factor for enterprise organizations to achieve this level of agility is through performance management. Traditionally, enterprise performance management consisted of an annual, all-encompassing appraisal of an employee’s work by their manager. 

This system was clunky and largely reviled by employees and managers alike—it didn’t reflect the actual work being done, left no room for ongoing feedback, instilled a culture of second-guessing and fear, and left improving performance as an afterthought.

Now, a vital shift is occurring for enterprise organizations to adopt performance management systems and tools that not only support, but encourage, innovation, collaboration, and employee learning and development. Leaders are seeing the benefits of implementing new performance management processes: retention, agility, and employee satisfaction, to name a few. 

We’ve broken down what makes a great enterprise performance management tool and how you can decide what system would work best to reflect the specific needs of your organization.

Why performance management matters on an enterprise level

  • The need for agility. An organization’s ability to move quickly, stay on top of trends, and innovate is a source of competitive advantage. This means the future is changing and with that, a company’s needs, goals, and roles of their employees. The ability to track, measure, and collectively understand an employee’s performance must be done within a system designed for agility. Performance management software can provide the adaptability and ease necessary for agility.
  • A focus on teams and teamwork. Because work today is varied, changing, and largely based on the needs of an organization as a whole, work for individual contributors has become increasingly more project and team based. Performance reviews must be able to track and account for not only individuals, but who an individual has worked with—and how. Having a performance management tool helps sync teams and prioritize collaboration.
  • The ability to strategically align. Agile organizations always have a dynamic way of steering the ship. One of the most effective ways to strategically align a company is through setting OKRs. Objectives and Key Results start with transparent goals set at the highest level with teams, managers, and individual contributors setting their own goals based off of them. A performance management tool tracks these goals, providing insight into the real work being done. 

The benefits of using a performance management tool

  • A performance management tool that mirrors more closely the natural cycles of work is more adaptable. Introducing another tool into an organization’s tech stack can seem daunting. But introducing a performance management tool that works alongside people and works to eliminate bias, track progress, and support individual contributors will ultimately lead to a smoother, company-wide adoption.
  • A tool that works alongside people and teams by encouraging conversations, measuring success, and tracking milestones are more psychologically safe than an annual appraisal or informal system. In other words, formalizing performance management takes the guesswork and stress out of a traditionally stressful and dreaded part of work.
  • A performance management tool supports change. Whether your organization is focusing on developing skills within their people in order to compete, you need a system to deliver ongoing feedback to support rapid innovation, or you’re looking to coordinate cross-functionally to deliver better service to your customers, a system that is designed for supporting change is necessary.
  • A system that routinely and effectively recognizes individual and team performance boosts morale. Happy employees are more productive. A key to maintaining employee satisfaction is through regular feedback reviews with clear objectives and goal setting. Employees like to know how and why their work is contributing to a larger picture.

The elements of a strong enterprise performance management tool 
Metrics & OKRs

One of the most important factors in an enterprise performance management tool is collaborative goal setting and performance objectives. While most companies use some form of goal setting or metrics, often they aren’t accompanied by a system or tool. This results in a time lag, where it’s too late for leaders, managers, or individuals to pivot their efforts as they relate to pressing needs or new issues. A system that allows for real-time tracking, updates, and changes reflects more closely the reality of work today.

The ability to track metrics and OKRs also allows for large-scale alignment. Without explicit and transparent goals, leaders don’t have a clear picture of the work being done and thus can’t accurately and quickly make critical decisions. Similarly, managers are stuck in a constant pull between new needs communicated by leadership and the work in progress of their teams. This, of course, directly affects the work and sentiment of individual contributors who feel they’re constantly guessing as to the relevancy of their work instead of what matters: quality, collaboration, creativity, and development.

Sustainability & cadence

Because change and adaptability are key factors to today’s world of work, a performance management tool can’t be static or infrequent. A regular performance review cadence allows issues to be identified and resolved in an appropriate time frame. Not only that, but keeping a regular cadence helps performance management become an intrinsic part of the rhythm of daily work. Since companies operate within a business cycle, a performance management tool should be able to dovetail with the already set cadence. 

Continuous improvement

Continuous improvement and employee development can only be implemented with success if supported by a system that reminds and rewards this focus. Find a tool that tracks and shows how managers and leaders are coaching teams or people—this added accountability and transparency ensures career development never falls to the wayside at any level. It also cuts out an unintended, yet insidious byproduct of becoming a “learning culture” without any formality: the oneness of learning and developing falling on the shoulders of the individual who needs guidance in terms of learning and developing. 

Additional factors to consider when choosing an enterprise performance software

Customer support

Enterprise performance management tools that aren’t supported by a customer success team will fail before takeoff. Because performance management directly affects the daily and long-term work of each employee, it’s important for leadership to implement a new system with direct and deep support. A solution that comes with a knowledgeable support system will help with implementation, problem-solving, and executing a bespoke process.

Integration and customization

Real, effective performance management doesn’t have a plug-and-play solution—the software should be rich with thoughtful design, but flexible enough to meet the needs of any enterprise. Take into account the tech stack you currently have, what needs the software has in terms of implementation, and what benefits and pitfalls come with the integration process. Customization is most important in terms of: your cadence, communication, and reach across functions.

User interface

Like any software, the usability and interface of a product is very important. You want the implementation process to feel natural, and user experience is key. Since performance management is predicated on the participation of every single individual within an organization—from executives to managers to individuals — the user interface must be recognized and accounted for when weighing your options.

Choosing the right performance management tool is imperative and you want to get it right the first time. Betterworks’ performance enablement solution is designed by experts in organizational design and philosophy. Our top-rated customer success team can help any enterprise organization meet their performance enablement goals. Learn more today!