Performance management software helps organizations track, analyze, and improve employee efficacy through goal setting, feedback, evaluations, and development planning. We reviewed the top solutions on the market and used our advanced review methodology to rank our top picks below.
- Paycor: Best Overall
- Lattice: Best for Financial Companies
- BambooHR: Best for Tech Companies
- ClearCompany: Best for Manufacturers
- Rippling: Best for Healthcare
- Leapsome: Best for Professional Services
- PerformYard: Best for Small Businesses
- Namely: Another Good Option
Paycor - Best Overall
Why we chose it: We found Paycor best overall because of its complete talent management module within its overall HR system. The platform supports SMART Goals and OKRs for goal-setting flexibility to achieve personal, departmental, and organizational goals. Additionally, it uses 360-degree feedback for performance evaluations, which gathers input from multiple sources like peers and subordinates to evaluate an employee’s current performance. This allows companies to comprehensively understand their team from more perspectives than just statistics, earning its 8.8 score.
We also like Paycor’s modular structure, which allows businesses to customize their HR solutions by selecting only the necessary modules for their company. For example, businesses can use talent management alone or pair it with Paycor’s HR and payroll modules for an all-in-one solution. Furthermore, users can create customized templates to use during one-on-ones for a streamlined review approach and to ensure no information is overlooked.
One downside to Paycor is that it does not publicly list its prices. Also, it’s not ideal for businesses looking for a solution with everything in one package, as Paycor can be purchased through integrated modules.
Lattice - Best for Financial Companies
Why we chose it: We gave Lattice an 8.5 score as an effective solution for financial companies, as it has over 400 financial service customers. The platform helps companies build top talent from within by implementing development plans for every individual. This can be done company-wide, allowing bank and credit union board members to spot high-performing individuals within every branch. Furthermore, creating and communicating career goals can encourage employees to stay with the company and ascend.
We also appreciate Lattice’s advanced people analytics module. Managers can analyze real-time team metrics, such as sent feedback and employee sentiment. Also, businesses can connect performance with compensation to determine pay raises and ensure competitive wages based on role and geography. This helps financial businesses that see many market swings ensure they compensate their employees fairly.
One potential drawback of Lattice is its integration with HR platforms. While it does integrate with some, like BambooHR and Workday, the list is fairly short compared to the total amount of platforms on the market.
BambooHR - Best for Tech Companies
Why we chose it: We found BambooHR best for midsized tech companies because it offers a complete HR solution with a strong performance management module. It offers flexible review feedback for employees who prefer to receive reviews more than once a year. The reviews can happen after completing projects and in a casual setting to promote steady feedback communication. This is ideal for tech companies with many remote workers and project-based employees, as it helps keep them acquainted with management through conversation instead of formal meetings.
BambooHR’s 8.4 score also reflects its employee well-being module which is effective for tracking a company’s morale. Surveys can be conducted at all levels, asking about overall satisfaction at the company, motivations, and relationships with coworkers. This helps businesses gauge happiness levels and visualize areas of improvement. To cap it off, they can be conducted on a desktop or the mobile app, making it simple to use.
We recommend BambooHR for midsize companies, as its performance management module is only available on the Pro plan. This is more expensive than the Core plan, which only has HR capabilities.
ClearCompany - Best for Manufacturers
Why we chose it: We included ClearCompany because of its comprehensive talent management. ClearCompany’s real-time feedback and performance review features support continuous career development, helping employees remain focused and engaged. The feedback can be conducted through daily or weekly performance conversations through Slack integration, so employees don’t have to wait for yearly one-on-ones to hear from management about their work quality. This is essential for the manufacturing industry that experiences high turnover rates, as support from upper management can help retain a unified workforce.
We also appreciate its goal alignment tool, which ensures that individual objectives are directly linked to the company’s strategic goals. This alignment is facilitated through the platform’s advanced goal-setting and tracking capabilities, which allow for the establishment of clear, measurable goals at every level of the organization. However, we wouldn’t recommend ClearCompany for small businesses, as its range of features and price are more suitable for midsize to large companies.
Rippling - Best for Healthcare
Why we chose it: Rippling combines performance management with a broader set of HR, IT, and operations functions, which we found well-suited for the healthcare industry. It’s a full HR system, so its performance management module is integrated with other features like payroll, benefits administration, and computer and software management. The system automatically assigns compliance training for HIPAA to all employees and labor law adherence for healthcare workers.
Rippling’s automation capabilities extend to onboarding and offboarding, ensuring that employee performance data is up-to-date and reflective of any changes within the organization. This integrated approach saves time and gives managers and HR professionals a full view of the overall employee lifecycle. Its survey module is also effective for employee engagement, as they can provide honest feedback to their employer.
However, some users have reported Rippling’s setup to be complex due to its wide range of features, though it does have extensive onboarding and training modules to combat this.
Leapsome - Best for Professional Services
Why we chose it: Leapsome is a performance management software that helps companies engage and retain employees, making it a good fit for professional service firms and consultants. We like its learning module, as owners and upper management can create educational paths that help encourage good habits and advance career development. With each consultant having their own methods and routines, this can help the company become more unified.
We also found Leapsome’s integration options ideal for consulting firms. These options include several leading HR platforms like Rippling, Paylocity, and BambooHR. This helps create seamless data sync from the existing HR platform to bring over employee data. Furthermore, the system helps keep every consultant aligned with company goals, as management can leave comments and explain each goal in full context. On the other hand, we found in our research that some users reported a lack of customization options for items like OKRs.
PerformYard - Best for Small Businesses
Why we chose it: We included PerformYard because it is an affordable performance management solution for small businesses. The software lets users conduct 360-degree reviews, which include self-assessments and peer and manager reviews, to get multiple perspectives and external input. HR teams can then visualize this data on a grid and analyze it to evaluate each employee thoroughly.
We also appreciate PerformYard’s goal management module. Owners can create goals from the top down to ensure every employee hits key company-wide OKRs while receiving continuous feedback. PerformYard offers an affordable pricing plan for small businesses. It starts at $5/person/month and includes reviews, goals, feedback, and reporting modules for complete performance management. One downside to PerformYard is its employee engagement module costs an additional $1-$3/person/month.
Namely - Another Good Option
Why we chose it: We found Namely best for mid-sized companies due to its scalability and full HR suite, including payroll, benefits, talent management, and compliance. The platform grows with businesses, supporting their evolving operations through a high degree of customization. This includes custom workflows, fields, and reports, ensuring that the software adapts to the company’s unique way of operating rather than the other way around.
Additionally, Namely supports mid-market firms through its advanced performance management features. These include goal setting, performance reviews, and feedback tools, essential for maintaining and improving employee performance and engagement in a growing company. Despite these features, one main drawback is it can be expensive for large businesses due to the per-employee pricing model.
What is Performance Management Software?
Performance management software tracks, analyzes, and evaluates employee performance to ensure individuals and teams are engaged and on track with organizational goals. By coordinating and collecting performance reviews, these systems help train managers and employees by letting companies better understand employee performance and productivity.
This software can sometimes be referred to as a talent management system, a specific type of human resource software. Managers can collect data on their people in many different ways but will primarily use this software to better align their employees with organizational goals set by upper management.
For employees, a performance management solution can help inform management of how beneficial of a team member you’ve been–which can influence compensation, career trajectory, company goals, and even streamline hiring decisions. This can be through annual performance reviews or self-assessment tools where employees can set individual goals.
Key Features
- 360-Degree Feedback: Provide employees with confidential and anonymous feedback from their colleagues, subordinates, and supervisors. Multi-layer feedback can be passed across the company hierarchy regarding problem-solving abilities, interpersonal skills, business acumen, technical capabilities, influence, and communication skills.
- Goal Management: Manage and track performance goals for your employees and management staff. Set weekly, monthly, quarterly, and yearly goals. Conduct audits to maintain ongoing communication about goal setting and progress.
- Performance Reviews: Let employees evaluate their own performance and compare it with team members’ or management’s feedback. Help facilitate management/employee communication, identify employee strengths and weaknesses, set individual goals, make informed compensation decisions, and ensure human resources are leveraged for the organization’s maximum benefit.
- Succession Planning: Craft and execute strategic and long-term succession plans to help employees take the next step in their careers based on competencies and skills. Track and analyze employees to discover high-performing individuals who can succeed as company leaders. Monitor employee talents and skills and ensure training and development can be encouraged for replacements.
- Reporting: Run performance reports and share information among key personnel, department heads, and senior leaders. Create customized reports based on performance evaluation needs, such as completion status reports.
Primary Benefits
The top benefits of a performance management platform include:
Improve Employee Engagement and Autonomy
This software helps automate employee engagement surveys that ask clear questions to measure employee satisfaction. These let your business determine what is working and what isn’t, along with what your employees are the least satisfied with. By providing this information to senior management, you can inform better strategies moving forward.
Employees can also use performance management software for their own benefit. This includes tracking their career progression, their evaluations (from other employees or management), and their overall understanding of their performance in relation to the company’s goals.
Gather Continuous Feedback On Employees and Management
Rather than conducting annual reviews of employees, continuous performance feedback helps align and develop your workforce more consistently. This human-centered approach promotes, evaluates, and improves employee performance. By continuously meeting with staff to review their current workload, you ensure all employee goals are aligned.
Other features offered by performance management software that tie in with a continuous feedback philosophy include:
- Check-ins: Allow managers to check in with employees regarding their performance periodically
- Crowdsourced feedback: Let employees ask for advice from their coworkers and managers through message boards and chats
- Performance dashboard: A unified view that displays feedback, summaries, and established goals for each employee with their own login.
- Employee recognition program: Acknowledge employees’ contributions through gift cards, vouchers, or performance-based bonuses.
Discover Professional Development Opportunities and Promote From Within
Career mapping and development planning components are the most critical parts of planning the long-term careers of your company’s employees. The system will identify areas for improvement, set goals, measure progress, and outline a strategy to ensure the person can stay on the path to new career opportunities and better serve the company.
This software provides personalized development plans, allowing your employees to direct their professional development and correct performance. It will also help conduct reviews and prepare development plans by monitoring employee performance on new projects, workshops, seminars, and even new qualifications they may garner, such as certifications.
What Does Performance Management Software Cost?
The cost of performance management software pricing starts between $4 to $10/employee/month. The pricing model is generally a subscription, considering the total number of employees you will run performance reports on. It may sometimes be stated as a per-user/month cost, but as long as your employees log in to access a portal or view information about their performance, they will require their user license.
For example, if your business has 100 employees and finds a performance management software advertised at $6/user/month, you will be looking at an overall monthly cost of $600/month. These solutions may have upfront costs, such as the cost of implementation and training.
