The performance and success of any company or business is largely determined by how well its employees can perform. Which is why, human resource managers nowadays are increasingly looking for intelligent and tech-backed ways to monitor and manage employee performance. And this brings us to the science of performance management, which involves a set of processes that align individual and team goals with the organization’s goals. Performance management is a constantly evolving area in Human Resource Management (HRM) and is a widely researched and discussed topic too.

Performance Management System (PMS) is essential for driving high performance and achieving multiple goals. However, many PMS practices followed are dated & ineffective  in today’s fast changing business world  and don’t enable accomplishing expected results. Studies show that only 14% of organizations are happy with their current PMS and the rest are looking for a change.

Why are performance management practices not working as well as they ought to?

Inefficient and outdated PMS practices are holding many organizations back instead of helping them grow. This is leading to loss of engagement and productivity, both of which are major problems globally. Here are some reasons why PMS practices are not working as well as they ought to.

Lack of effective performance management practices and evaluation tools

Standard management practices and evaluation tools are designed to rate all employees in the same manner. This might not be fair and can lead to discontent amongst team members. Such standard tools and practices also don’t provide continuous feedback and frequent reviews, preventing meaningful changes and improvements throughout the year.

Lack of real-time data

Real-time data allows a company to make effective business strategies and decisions that can lead to positive outcomes. Such data also helps dynamic organizations to tweak their targets based on the current performance levels of their team and the market conditions.

Unfortunately, most of the traditional PMS processes don’t provide real-time data. Without this, PMS processes cannot create a difference despite how hard the HR team works on them.

Sticking to annual reviews

Yearly reviews leading to appraisals are quickly becoming a thing of the past. They usually lead to delayed feedback and are a result of inadequate information and subjective judgments. Most of the annual performance management practices only overemphasize recent performances and have no scope for self-development over the year.

Not evaluating behavioral competencies/skills outside of functional work

Most performance management software tools focus on narrower functionalities and traits and leave other critical behavioral competencies and skills outside of functional work. However, the latter is equally essential for the overall performance, growth of the team and the organization.

What can organizations do about it?

It is crucial for the management to analyze their current performance management practices and identify the effectiveness. If you have not been keeping up with the latest trends in the PMS industry, then it is time to compare your goal management strategies with the industry standards.

The role of technology in performance management

Technology plays a tremendous role in modern and effective performance management practices. Technology makes performance management more holistic. It helps improve self-development and boosts the performance of the team and the organization as a whole.

Digital tools can give a bird’s eye view of an employee’s performance, and appraisals don’t have to depend on a single supervisor’s evaluation. This is a great way to get accurate and more solid data about an employee’s performance.

The technology-driven performance management system is the future.

And OKR is one such tech-driven process you should know about.

Objectives and Key Results (OKR) is a goal-setting framework that uses technology to create a continuous feedback and appraisal process for organizations. It helps the management to focus on objectives and key results to ensure better accountability and results.

An OKR software-based performance management system helps organizations to become agile. It makes it easy to create dynamic goals and continuously aligns business goals with individual performance.

With such software, goal management can become hassle-free, as you can create short-term and long-term goals and encourage your team to work towards them. But remember that a good OKR tool has to do the following:

  1. Establish priorities
  2. Drive and sustain engagement
  3. Adapt to the needs of the organization
  4. Encourage objective performance assessment
  5. Pave the way for frequent performance review
  6. Focus on continuous feedback and assessment

If you are a startup, OKR will help you stay focused on your priorities as you grow.

For already established organizations, OKR can help align individual goals with organizational outcomes,  build transparency, better employee engagement, objective assessment while fostering employee development.

Artificial intelligence for performance management

Artificial Intelligence (AI) is making waves in all areas of business, including Human Resources. A lot of brands have now started using AI to revamp their performance management system as well. After all, there is so much this technology can do to encourage not just real-time but also intelligent performance management and continuous assessment, like:

  • Automate performance reviews
  • Create a continuous feedback and review environment
  • Provide real-time data for analysis
  • Create an environment for learning and self-development
  • Get rid of human errors and biases
  • Make it easy to communicate and solve issues
  • Improve teamwork and progress

Taking action

Performance management is not just about evaluating an employee’s performance for the year. It has to help both the employee and the management align and benefit from one another’s talents and capacities.

So, what you can do is start by identifying where your current performance management system is falling short. Then, get an expert opinion on using the latest tools and practices to better the process. Hold on to technological advancements. They will help enhance processes quickly and with minimal effort. It is then essential to train your management to use the tools and practices effectively.

While accomplishing such a change can take time, it will positively affect your team and organizational performance.


As mentioned before, ancient and stagnant performance management practices are holding back businesses from achieving the best they can. The lack of the right performance management system or tool has made the process very tedious and time-consuming too. Which is why, businesses must work smarter and not harder. This holds for HR practices too.

So, if you choose a well-adapted performance management system, it should do the following:

  • Create the right goals and objectives
  • Provide consistent feedback
  • Make it easy to communicate and collaborate
  • Constantly align business and individual goals
  • Create transparency
  • Drive engagement
  • Open up channels for self-development

All in all, do consider investing in modern practices and AI-based performance management tools to make a difference to how employees and your company handle performance management.

If you have experienced problems with productivity and performance in the past, then subpar performance management strategies could be one reason. Use modern tools to drive high performance and help employees stay focused and achieve organizational targets more efficiently.


Checkout our Performance Management System Buyer’s Guide to learn more Or Book a Demo

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