Blog post

How to Implement a Performance Management System

Choosing to implement effective Performance Management System software is arguably the most efficient way to invest in your company’s talent. By keeping your team engaged with your wider business goals and with what skills they can develop, you will achieve alignment and satisfaction across the board.


Employee Engagement Performance is a Must

Identifying talent is one thing, but keeping employees interested and constantly developing is another. Ensuring employee morale is in check and keeping them happy is critical to productivity. Disengaged workers will look for work elsewhere and discontent ones may share their feelings through the organisation. This may leave you with employee retention issues and likely spooked customers too.

In employee management terms, focusing on the team you already have is the best way to demonstrate that their contribution is valued.

A performance management system should catch both sides of the story. We believe that allowing your managers to set objectives for each team member while evaluating how those are being carried out via performance management is the most efficient method to keep a good spirit and coordinated effort. As well, employees should be given the chance to record their feedback. 


Performance Management KPIs and Measuring ROI

Key Result Areas (KRAs) should be assigned individually and expressed with weightage in percentages relative to the ‘perfect outcome’. Therefore a set weight expressed in line with the actual level of accomplishment in % gives a final KRA scoring. These actions can be completed and compiled in a report that is stored as a digital record attached to the relevant review.


9 Tips for Setting and Measuring Company and Employee Goals

1. Set goals at the end of Q4 in line with commercial goals for the following year.

2. Write realistic goals with the employee for better buy-in and comprehension of expectations. Ensure staff have the tools they need to perform these functions.

3. Don’t set too many goals! Keep the number of indicators reasonable and time-effective to both record and analyse.

4. Review goals at least quarterly to monitor progress and trigger corrective action plans to remedy underperformance. If you want to see real progress don’t leave these to annual interviews.

5. Use Real-Time Reviews to track how employees are progressing on their goals.

6. Instigate some official channels to communicate praise and acknowledgement of goal completion.

7. Structure compensation and any appropriate remuneration increases in line with targets.

8. Use Performance Management Software like HRLocker Real Time Reviews. Track and monitor appraisals and streamline and standardise the way your management runs reviews and records progress. Don’t leave this to old-fashioned paper templates and filing systems. Make your life easier!

9. If you integrate with a CPD (Continuing Professional Development) software or integrated HR system even better!


A great PMS system is of no benefit if management cannot use the system adequately! Keep it simple and train managers to be effective and give and receive feedback from their teams.

If you feel rating systems are not the right fit for your workforce, then there are still key issues to consistently address in regular reviews. Real-Time Reviews software will ‘force a conversation’ that keeps management and staff engaged about overall improvements in performance.


Questions Examples to Ask in Performance Management Reviews

  • Please can you outline what your objectives are within the organisation?
  • What is this organisation’s strategy – how does your function fit into that?
  • How well would you describe that you are doing in line with the direction of the overall and individual strategies?
  • What are your priorities in terms of what to achieve in the coming period?
  • How well-equipped are you to deliver those goals?
  • What do I, as your line manager, need to do to help you achieve those aims?
How to Implement a Performance Management System was last modified: March 6th, 2024 by Adam Coleman

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