Guide to Selecting the Perfect Performance Review Software

Aug 22, 2023 | Best Practice

employees high-five after selecting performance management software

Are you drowning in paperwork, switching between numerous spreadsheets and emails when it’s performance review time? Or maybe you’re dealing with a performance review software that doesn’t live up to your expectations? Maybe it’s time for a change – enter our performance review software guide.

Being an HR professional, you know the challenges of traditional performance appraisals well. However, think of a better way. Enter the era of performance review software. This software tool transforms and revolutionises how organisations evaluate and boost their employees’ performance. We have previously discussed why online performance management is a game changer. Yet, the key is choosing the right one!

No longer do we face the tedious tasks of manual data entry or the challenge of deciphering complex spreadsheets. Now, the right HR software allows you to easily set goals, track progress, and give timely feedback. However, with a plethora of options available, finding the best fit for your organisation can be overwhelming. But don’t worry! This guide is here to help. We’ll explore key considerations together, ensuring your choice boosts both your HR operations and the experience of your employees.

Take a look at our top performance management software features article if you want to deep dive on features, and learn how we worked out what performance review features to pick.



Performance Review Software Guide – 7 Essential Steps To Success

We’ll dive into the details below, but first, here’s a quick overview of the steps to guide your selection. Keep in mind, it’s an ongoing process, and sometimes, you might need to go back to a previous step to adjust.

1. Start with a Clear Understanding:

  • Assess your current performance management process.
  • Identify gaps and areas that need refinement.

2. Define Key Performance Indicators (KPIs):

  • Determine which data is crucial for effective performance measurement.
  • Identify the data necessary to enhance performance and support employee development.
  • Establish how this data will be translated into actionable insights.

3. Determine Data Collection Methods:

  • Decide on the methods and timelines for data collection.
  • Contemplate the frequency: be it continuous feedback, quarterly reviews, or annual evaluations.

4. Research Potential Software Suppliers:

  • Find suppliers in sync with your process and data requirements.
  • Ensure they tick essential boxes like security, scalability, and seamless integration.

5. Evaluate Features and Functionalities:

  • Schedule demos with potential suppliers.
  • Contrast their features, user-friendliness, and flexibility.

6. Conduct a Trial Run:

  • Pick at least one software for a pilot phase.
  • Gauge its compatibility and efficacy within your organisation’s framework.

7. Optimise for Maximum Efficiency:

  • Think about fine-tuning your process to exploit the full potential of your chosen software.
  • Engage in ongoing reviews and refinements to ensure optimum results.

Detailed Performance Review Software Guide

1) Get a Clear Understanding Of Your Performance Review Process

In the world of performance reviews, the saying “know thyself” is especially important. Before diving into choosing new software, you should truly understand your current process.

Why is this Step Crucial?

  1. Foundation for Improvements: A clear picture of your current process will highlight areas that are working well and those that require enhancement. It’s easier to improve upon something when you know where it stands.
  2. Avoiding Past Mistakes: History is a great teacher. By understanding past challenges, you can ensure that your new software addresses those specific pain points.
  3. Resource Allocation: A detailed assessment can also provide insights into how much time, effort, and resources are currently being invested. This can be a basis for ROI calculations later.

How to Go About It?

  1. Document the Current Process: If it isn’t already, document every step of your current performance review process. This includes goal-setting, data collection, feedback methods, and evaluation criteria.
  2. Engage with Stakeholders: Talk to HR team members, managers, and even a few employees. Gather feedback on what they believe works and what doesn’t. Direct insights can be incredibly valuable.
  3. Analyse the Feedback: Once you have feedback, look for patterns. Are there common complaints or praises about certain aspects of the process? These can guide your software selection criteria.
  4. Assess Technology Usage: If you’re already using software or manual systems, evaluate their effectiveness. Understand why they may or may not be working.

End Goal

Your goal is to draft a blueprint of your performance review process. This blueprint will help you understand what works and what doesn’t. Then, with this foundation, you can choose software that fits your organisation’s needs and takes your performance management to the next level.

2) Define Key Performance Indicators and Personal Development Strategies

Key Performance Indicators or KPIs are measurable metrics that show how effectively an organisation performs. In performance management, KPIs help assess an employee’s progress and identify areas needing support or training.


Why is Defining KPIs Important?

  1. Clarity in Objectives: KPIs provide a clear roadmap of what’s expected from employees. They set the benchmark for performance and align individual goals with organisational objectives.
  2. Enhanced Decision-Making: Armed with accurate data, HR professionals and managers can make informed decisions about training, promotions, and other HR-related processes.
  3. Motivation and Growth: When employees understand their KPIs, it gives them a target to aim for, motivating them to improve. It also offers insights into areas where they can grow professionally.

How to Define Effective KPIs?

  1. Align with Organisational Goals: KPIs should resonate with the broader goals of the organisation. For instance, if a company’s goal is to enhance customer satisfaction, a related KPI for customer service reps might be “average resolution time.”
  2. Ensure Measurability: The chosen KPIs must be quantifiable. Instead of a vague KPI like “improve communication,” opt for something more specific, such as “reduce inter-departmental miscommunications by 10%.”
  3. Incorporate Different Data Types: While some KPIs are quantitative (e.g., sales figures), others can be qualitative (e.g., employee satisfaction scores). A mix provides a holistic view.
  4. Review and Revise: As your organisation evolves, so should your KPIs. Regularly review them to ensure they remain relevant and aligned with current business objectives.
  5. Example KPIs: Employee objectives, Role based competencies, Skills, Behaviours and Potential

Making KPI Data Actionable

Once you’ve determined your KPIs, it’s essential to translate that data into tangible insights. This involves:

  • Setting up Feedback Loops: Regular check-ins between employees and managers based on KPI data can foster continuous improvement.
  • Utilising Analytical Tools: Modern performance review software often comes with analytical capabilities. Leveraging these can help HR professionals spot trends, identify challenges, and make proactive decisions.

End Goal

By the end of this step, you’ll have clear performance metrics directly tied to your organisational goals. These KPIs will guide not only performance reviews but also shape HR strategy and employee growth efforts.

3) Determine Data Collection Methods

In the performance management world, your insights depend on the quality of your data. However, it’s not only about the data you gather but also how and when you do it. By using a systematic data collection approach, you ensure consistent and reliable evaluations.

Why is Choosing the Right Method Important?

  1. Reliability: A standardised collection method means each employee is evaluated using the same criteria, eliminating biases and promoting fairness.
  2. Actionable Insights: Consistent and timely data provides a clear picture of performance trends, challenges, and opportunities over a given period.
  3. Employee Engagement: When employees are aware of the data collection process and its regularity, they’re more likely to stay engaged and take feedback constructively.

Strategies for Effective Data Collection

  1. Determine the Frequency:
  2. Choose the Right Tools: Depending on the frequency and depth of reviews, you may opt for different tools. For instance, mobile apps might be best for continuous feedback, while more comprehensive software platforms could be ideal for quarterly or annual reviews.
  3. Mix Quantitative & Qualitative: While numbers and metrics are essential, qualitative feedback offers context. Use surveys, feedback forms, and one-on-one interviews to gather a mix of both.
  4. Ensure Anonymity Where Needed: For peer reviews or 360-degree feedback, ensure anonymity to get honest and unfiltered insights.
  5. Train Your Team: Everyone involved in the data collection process, from managers to HR professionals, should understand the tools and methods in place. Regular training sessions can keep everyone on the same page.

End Goal

Your goal in this phase is to create a clear, fair, and efficient data collection process that reflects the details of employee performance. Everyone involved should find this method easy to grasp. Use tools and techniques that align well with your organisation’s requirements.

4) Research Potential Software Suppliers

Selecting the right performance review software isn’t only about features; it’s also about partnering with a trustworthy and skilled provider. Your chosen software will be central to performance management, so ensure you pick a provider that matches your organisation’s values, needs, and goals.

Make sure the basics are covered before you get into the details.

Basic performance management software requirements:

  • User Friendly Interface
  • Customisable
  • Secure – look for ISO27001 certification. See PerformanceHub security as an example.
  • Complies with the relevant laws (GDPR etc)
  • Service availability – look for web-based service with high availability service level agreements (SLAs)
  • Read customer reviews and make sure they provide a great level of customer support. Check PerformanceHub’s Customer Reviews as an example.


Why Proper Research on Suppliers Matters?

  1. Trustworthiness: Reliable suppliers are less likely to encounter significant system issues, and if they do, they’ll address them promptly.
  2. Long-Term Partnership: A supplier that understands your organisation’s goals and needs can help streamline the performance review process over the years, adapting as necessary.
  3. Cost-Effectiveness: Suppliers that offer value for money can lead to substantial cost savings in the long run, especially when considering total costs, including potential training or integration. Ensure there are no hidden fees or huge up-front commitments that lock you in.

Steps to Identify the Right Suppliers

  1. Market Analysis: Begin by understanding the leading players in the performance review software market. Use industry reports, customer reviews, and peer recommendations to compile an initial list.
  2. Alignment with Your Needs: Narrow down your list by identifying which suppliers offer solutions that align with your defined process and data collection methods.
  3. Essential Checks:
  4. Customer Testimonials and Case Studies: These can provide real-world insights into how the software performs and the kind of support the supplier offers.
  5. Financial Stability: A financially stable supplier is more likely to be around in the long run, ensuring continuity of service.
  6. Support and Training: Consider suppliers who offer excellent customer support, be it through training, regular check-ins, or responsive help desks.

End Goal

Your goal is to create a list of potential software suppliers. Importantly, they should offer not just a product, but a partnership. This list will then guide you through demos, evaluations, and final choices.

5) Evaluate Features and Functionalities

After defining your KPIs and choosing your data collection methods, next, you should explore the different performance review software out there. Focus on understanding their features and make sure they match your organisation’s requirements.

Why is Evaluating Features Important?

  1. Ensuring Compatibility: Every organisation is unique, and so are its needs. A comprehensive evaluation ensures the software caters to your specific requirements.
  2. Ease of Use: Software that’s intuitive and user-friendly promotes better engagement from employees, managers, and HR teams.
  3. Future-Proofing: As your organisation grows, so will its needs. Evaluating functionalities ensures you choose software that can scale and adapt with you.

Steps to Thoroughly Evaluate Features and Functionalities

  1. List Your Must-Haves: Before engaging with suppliers, have a clear list of non-negotiable features you require. This could range from integration capabilities with existing systems to specific reporting tools.
  2. Schedule Demos: Demos offer a hands-on understanding of the software. They allow you to explore its interface, functionalities, and ease of use. Make sure to involve different stakeholders in these demos for a rounded perspective.
  3. User Experience: Great software is not just about features, but also about the user experience it offers. Check for intuitive designs, easily navigable interfaces, and clear instructions.
  4. Flexibility and Customisation: Some off-the-shelf solutions might be great, but they may not cater to all your specific needs. Check if the software offers customisation options or if it’s rigid in its functionalities.
  5. Integration Capabilities: The software should easily integrate with other tools or systems your organisation currently uses, be it HRMS, payroll, or communication tools.
  6. Check for Updates and Support: Reliable suppliers regularly update their software to fix bugs, improve functionalities, or add new features. Additionally, ensure they offer robust customer support for any issues or training needs.
  7. Ask for Customer References: Existing customers can provide invaluable insights into their experiences, the software’s pros and cons, and the support quality of the supplier.

End Goal

By the end of this phase, you will know which software solutions match your organisation’s needs and which don’t. Moreover, the goal is to choose software that addresses your current needs and can support your performance management journey in the long run.

6) Conduct a Trial Run

While demos and supplier evaluations offer a glimpse, hands-on experience truly shines. By conducting a trial run or a pilot phase, your organisation can directly evaluate the software’s performance and compatibility in a real-world scenario.

Why a Trial Run is Essential

  1. Real-World Insights: A trial helps you understand how the software performs under actual workplace scenarios, revealing potential pitfalls or benefits that might not be evident during a demo.
  2. Employee Feedback: Engaging your staff in the trial process can offer insights from an end-user perspective. Their feedback can highlight ease-of-use issues, learning curves, or even additional features that might be beneficial.
  3. Process Verification: Testing the software allows you to verify if it aligns with your data collection methods, performance review processes, and other organisational strategies.

Steps for a Successful Trial Run

  1. Define the Scope: Before starting, clearly outline what you aim to achieve with this trial. Are you testing specific functionalities, integration capabilities, or the overall user experience?
  2. Engage Key Stakeholders: Ensure that managers, HR professionals, and a select group of employees are involved in the pilot. Their diverse perspectives can offer a holistic view of the software’s performance.
  3. Document Everything: Track and document any challenges, benefits, or observations made during the trial. This documentation will be crucial when evaluating the software’s viability.
  4. Seek Continuous Feedback: Instead of waiting until the end of the trial, encourage stakeholders to provide continuous feedback. This can help in quickly identifying major issues or benefits.
  5. Evaluate Integration Capabilities: If integration with other systems (like HRMS or payroll) is crucial, test these integrations thoroughly during the trial phase.
  6. Test Support Services: Use this period to gauge the supplier’s responsiveness and support quality. Raise queries or concerns and observe their turnaround time and problem-solving capabilities.
  7. Review and Decide: At the end of the trial, gather all stakeholders for a feedback session. Discuss the documented observations, weigh the pros and cons, and decide if the software fits your organisation’s needs or if further trials are required.

End Goal

By the conclusion of the trial run, you should have a crystal-clear understanding of the software’s capabilities, limitations, and fit within your organisation. This hands-on evaluation phase is crucial in ensuring that your final choice is well-informed and aligns with your organisation’s long-term performance management strategy.

7) Optimise for Maximum Efficiency

Implementing the ideal performance review software for your organisation is only the beginning. Once you’ve settled on a software solution, the next step is optimisation. This phase ensures that you’re making the most of the tool at your disposal and that both the software and your organisational processes are aligned for peak performance.

The Importance of Optimisation

  1. Full Utilisation: Simply implementing software without optimising can lead to underutilisation of its capabilities. Optimisation ensures you’re getting the full value from your investment.
  2. Evolving Needs: As your organisation grows and evolves, so will its needs. Regularly optimising your processes and the software’s functionalities will keep you agile and responsive to these changes.
  3. Improved ROI: Fine-tuning processes and leveraging all the features of the software maximises the return on your investment.

Steps to Ensure Maximum Efficiency

  1. Feedback Loop: Establish a robust feedback mechanism. Encourage employees, managers, and HR professionals to provide regular feedback on the software’s functionality and the performance review process.
  2. Regular Training: Organise periodic training sessions to keep all users updated on the software’s features and best practices. This also helps in onboarding new employees.
  3. Process Review: Periodically review your performance management process. Assess if any bottlenecks, inefficiencies, or gaps need addressing. Modify the process as necessary to ensure it aligns with the software’s capabilities.
  4. Software Updates: Stay updated with any new features or updates the supplier offers. If these updates offer functionalities that can benefit your organisation, consider integrating them.
  5. Integration Checks: Ensure that the software’s integration with other organisational tools remains seamless. Regular checks help identify any issues early on.
  6. Performance Metrics: Define clear metrics to evaluate the software’s impact on the performance review process. This could include metrics like user satisfaction, time saved in the review process, or the quality of feedback generated.
  7. Annual Review: Dedicate time annually (or bi-annually) to holistically evaluate the software’s impact, the efficiency of the performance management process, and areas of improvement.

End Goal

Optimisation is an ongoing journey. By continuously refining processes and staying updated with the software’s capabilities, you can ensure that your performance review system remains a powerful asset for organisational growth and employee development.

Conclusion: Embarking on a Journey of Continuous Improvement

We hope you found this performance review software guide useful. Choosing the right software is much more than a one-time decision. It’s the beginning of a transformative journey that, when approached with care and thoughtfulness, can greatly enhance your organisation’s approach to performance management.

By following the outlined steps and regularly revisiting your chosen solution for refinements, you’re not just implementing software; you’re establishing a dynamic system that adapts and grows with your organisation’s evolving needs. Remember, the goal isn’t just to find a tool that fits today’s requirements, but one that paves the way for tomorrow’s growth, challenges, and opportunities.

In a world where employee performance and development are crucial to success, the right software can be the catalyst that propels your organisation forward. However, it’s the continuous commitment to understanding, evaluating, and refining your tools and processes that truly sets apart great organisations from the good.

Embrace this journey with an open mind, and you’ll find that the benefits — from streamlined processes to enhanced employee satisfaction and performance — will far outweigh the effort.

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