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Why your HRMS tool will not work in 2022 for performance Management

29 January, 2022
6 mins

An organization’s performance management system has to walk a fine line. It needs to be scrupulous enough for the managers to give their employees clear and continuous feedback yet simple enough that it doesn’t impede the momentum of the manager and employees’ daily work. Uncovering this balance requires hand-picking the ideal performance management software or tool.

performance Management

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Many HR departments use their human resources information system (HRIS) as a performance management tool as well. Being already used for managing HR data, why using the HRM software for performance management is not recommended? While organizations have their own way of functioning, according to Forbes an ideal performance management tool should have these six critical elements:

1. It must be efficient

2. It must be accurate and fair

3. It should be set up for elevating the performances and not just reviewing the past performance

4. It should use multiple data sources like monitoring performance against objective key performance indicators.

5. It should include formal growth and training strategies. 

Despite HRM software being exceptional for managing data, these platforms lack most of the components listed above for insightful performance management. Below, learn more about the roadblocks organizations encounters when using HRM software as a performance management software and how having a dedicated performance management software will help the organization in achieving the desired success. 

The limitations of using HRM software as a tool for performance management

Just like every other software solution for the organization, an HRMS or HRIS has its place in the organization’s technology pile. In spite of this technology being a great medium for collecting, storing, and organizing HR data, effectual performance management mandates much more advanced functionality. If you use your HRMS as a performance management tool for your organization, you will shortly run into multiple limitations.

1. Difficulty in ascertaining insights 

Successful performance management is dependent upon the combination of performance development and performance measurement. Since all HRM software act as a tool for data management, it lacks the analytics and reporting capacities required for either purpose. Even though the composition of the analytics report can be possible, it will require a substantial manual grind for both exporting and viewing the data and assembling a report to share with others. 

2. A burdensome administration

As you must be aware an HRMS generally operates on multiple back-end systems, it can be an intricate tool to manage. So, when organizations use it to serve the purpose of a performance management tool, they need a professional service team for regular updates, dedicated in-house staff for administering and implementing changes and rely on both of them to ensure the smooth functioning of HRMS. On the flip side, a performance management framework is depicted as being simple and user-friendly for the employees. 

3. Risk of errors and breakdowns

At first glimpse, an HRMS can be mistaken as the perfect tool to be used as a performance management software. From entitling you to manage employee data such as allowances and benefits, its aptness also expands to include the performance data from the organizational teams. However, what an employee sees is a cluster of databases consolidated into a single user interface. A setup that is not entirely melded on the backend will eventually result in data errors, slower results, and breakdowns in the system. Consequently, it will hinder the organization’s progress during the reviewing of performance data and regulating of organization’s progress.

4. Innovation driver by competitors

A typical challenge that organizations confront when using HRM software for performance management is the scarcity of dedication to innovation. For an employee, a performance management tool should list their most important tasks, have a simple workflow and intuitive design, all of these take a backseat when the organization uses an HRMS as a performance management software. The driver of innovation for HRMS is generally competition and not offering the best user experience. 

Overcoming HRMS limitations through a dedicated performance management tool

Even though using HRM software for supporting basic performance management is possible, it gets tricky and can make your employees disengaged, and hence is not an ideal tool for performance management. This is the reason that for the last few years, organizations have been using a dedicated platform for performance management. 

The performance management software is extremely user-friendly and enables the organization to share and document feedback as a part of 1-on-1 meetings. It facilitates the organization to house, track, and connect the key elements of the performance process such as feedback, objectives, and progress all under one roof. Below are some of the benefits of having dedicated performance management software:

1. Cultivating employee engagement

Organizations that have a dedicated performance management tool are bestowed with prompt employee engagement. Employee engagement as a methodology is known for fostering growth and profits for the organization in the next few years. A performance management system makes achieving employee engagement a mere cakewalk for the organization. By letting the employees know about how their input leads to the ultimate output for the organization, their most important objectives, and providing them real-time feedback, organizations are able to enrich their employee engagement at a faster pace. Employees see their purpose and self-worth in the organization, which in no way was possible through HRMS. 

2. Ease of use

One of the biggest reasons for your organization to have a dedicated performance management system is its ease of use. Each and everything requisite for a review cycle is available in one place, the processes are automated and once the review information is revamped(start dates, review templates, etc) there’s not much a manager has to do, except supervise the entire process. Exactly, its ease of use is not just limited to employees but expands to HR managers as well. Even better, you no longer have to send those never-ending reminders to your employees to complete their reviews. Having built-in reminders, performance management software will prod the employees to complete their review cycle. Taking the burden off your shoulders, it facilitates the managers to fixate on the outcome of reviews, rather than the whole cycle of it. 

3. Obtaining business insights

Tracking the performance of your business has never been this easy. Serving as a decision-making model, a performance management tool helps you in obtaining business insights. This information will aid you in finding purpose and increasing the understanding of everyone’s contribution, resulting in giving you better control over your organization. Getting the much-needed insights will hand you the fuel needed for powering your organizational efforts. This will facilitate you to spot trends, patterns, warnings, and opportunities that will help you in ensuring that your business does not get off the desired track. Moreover, it will support regulating and tracking performance measurement, a key priority for every leader in the modern work culture. 

4. Support a high-feedback environment

One of the keys to making the feedback effect is to make it a regular process. Having an environment where managers have the tools to provide effective feedback has become very critical in today’s technology-driven work culture. In a survey conducted, it was found that four out of ten employees are vigorously disengaged when they revived little or no feedback. A performance management software makes it easy for managers to provide real-time feedback to their employees. Having such a system in place that expedites the feedback process promotes a high-feedback culture where valuable input is regularly given and successfully implemented. 

Using HRM software as a performance management tool will only create more work and headaches for HR managers. No wonder organizations of all sizes and industries have started to have dedicated software for the performance management of their organizational teams. 

So, what’s keeping you waiting? Contact us now for all your queries related to performance management tools and employee engagement software.