Where to Start with HR Tech: Performance Management Tools

We’ve already talked about an HRIS and an ATS, and I would argue that those two (along with maybe a separate payroll tool, in some cases) are the foundation of a modern People function. In most cases, I would suggest implementing these early, somewhere between employee #10 and #20, especially if you’re growing steadily. Delaying that implementation will result in a headache for you and the HR staff you eventually need to hire.

Performance management tools are the first tool I’d suggest you consider once you’ve got a solid foundation in place. In addition to a tool, I’d also suggest defining a regular performance review process and putting together a role architecture (even if it’s sparse!). This does two things for your business:

• Risk mitigation - when you make a point of discussing an employee’s performance with them at least once a year, it ensures that uncomfortable conversations with underperforming team members aren’t put off indefinitely. It’s understandable that busy managers (especially those who don’t have a lot of experience) might put off telling someone that they’re not meeting expectations, but letting underperformance linger makes it more difficult (and risky) to take action later. Legally, situations that you let linger are situations that you’re implicitly okay with, so you have to take extra steps to manage someone out of the business when they’ve been underperforming for an extended period of time. And managing someone out is uncomfortable at the best of times, but it’s even worse when it’s a situation that has dragged on for too long.

• Employee engagement - people know when they join a start up that their role is likely to change and evolve over time. That’s expected. There comes a point though where you have multiple people doing more or less the same job, but with clearly different levels of experience and competence, or an employee who has been with your organization long enough that they have clearly exceeded the expectations of their role, but it may not be defined what promoting them should look like. Having a role architecture and regular performance management conversations means:

  • Employees know what growth opportunities are available to them within the organization. You’re giving people a framework to make that ask, and you want them to make that ask to you, not to your direct competitor.

  • When it’s (past) time to promote a strong performer and recognize them for their hard work, you don’t have to spend a month discussing “But what are we promoting them into? What does it mean to be a Senior xyz?”

I’ll write blogs on building out your role architecture and creating a performance review process in the future, but for now, how would you go about selecting a tool? If you’re running a growing business, controlling your expenses is almost certainly on your mind, so the first place I’d look is your existing tools. Some HRIS options will have performance management functionality, and it may already be included in the plan you’re paying for. If your HRIS tool doesn’t offer this, you could also look at any wiki tools or workflow management tools you use - you may be able to leverage those, assuming there’s a way to keep private notes (ideally between managers, their team, and HR and no one else). You’ll be looking to set up regular check ins, with templates to keep conversations on track, and notes so there’s a record of what’s discussed. That won’t give you all the bells and whistles, but it’s enough for a minimum viable product.

If none of those options will work in your situation, the next step is to look for an outside option. There are lots of them, but I think this blog from PerformYard gives a good overview. They’re obviously biased, and they’ve put themselves at the top of their list, but PerformYard is generally a good option, and cost competitive from what I’ve seen. Lattice, 15five, and CultureAmp all have active online presences; if you’re trying to get a handle on what’s considered “good” in the performance management space, I’d suggest taking a look at what they’re sharing or follow them on social media and pick it up over time.