
If you’re a part of the HR team at your organization or business, you already know how important performance management is. As a vital part of any organization’s growth strategy, performance management includes all the ways organizations and their leaders engage with and manage employees.
Due to its importance, performance management is best handled with a dedicated strategy and a reliable software system. After all, how you manage teams and handle internal engagements will affect not only your employee retention rate, but facilitate their paths to leadership.
Often, smaller organizations can fall into the trap of not considering a performance management system as a top priority. However, without a dedicated system as a part of your core HR strategy, your organization risks stagnating and even increasing employee turnover rates.
We at Astron Solutions have been consulting and partnering with growing organizations for over 20 years to help them get a handle on their HR strategy. We’ve written about the best performance management software before, but we wanted to offer a deeper dive into the subject, especially since it can make all the difference for your organization. In this guide, you’ll be exploring:
- Performance Management: The Basics
- What is a Performance Management System?
- The Key Elements of a Performance Management System
Performance management is all about engaging with your employees in meaningful ways, creating opportunities for individual team members to advance, and paving the way for larger organizational growth. Ready to learn more? Let’s begin.


Performance Management: The Basics
To start off, we’ll be reviewing the basics of performance management. Even if you already feel pretty confident in this area, a quick refresher is always worth it to ensure you’re not glossing over any essential gaps.

Let’s start off with the core HR duties regarding performance management:
- Defining business roles
- Ensuring the alignment of team goals
- Documenting and reviewing employee performance
- Identifying staff advancement opportunities and resources
- Facilitating and analyzing exit interviews
As you can see, performance management encompasses almost every step of your employee’s journey, from starting the job to leaving. It only makes sense to flesh out a strategy that will genuinely direct your organization to growth and success.
While how you approach your own performance management strategy will depend on your unique situation, there are several best practices that any HR leader should keep in mind. These include the following:
- Ensure you set clear goals and objectives, as well as outlines for each employee role. This way, employees fully understand the responsibilities of their position. This strengthens your team and encourages individuals to fulfill all of their duties.
- Have dedicated programs for employee growth and encourage leadership development. While retaining current staff and acquiring new employees are essential to growth, you also need to provide pathways for team members to grow individually. With more qualified employees, your organization or business will only work smarter and more efficiently.
- Follow up with direct reports on project management. One of the biggest jobs of performance management involves ensuring that employees are getting work done as well as recognizing when it’s done well. Keeping up with direct reports on their individual projects on a regular basis is crucial to not miss out on anything.
- Along with giving actionable feedback to employees, allow them to give feedback back to managers. Keeping leadership accountable is also a key component for performance management. After all, employees will thrive under those who set a motivating atmosphere. Giving them the opportunity to provide feedback to leadership is a step in the right direction.
- Recognize good performance and reward employees for it, whether it’s financial compensation or something else. As mentioned earlier, it’s important to recognize when your employees do exceptional work. Rewarding employees not only motivates them to continue their hard work, but it also shows them that you see their value and that they play an important part in the business.
- Follow up with feedback and suggestions given to employees in order to track progress. While outlining steps to improve internal processes and providing employees with actionable feedback is great, it doesn’t do much if it isn’t followed up on. Make sure you’re consistently checking in with team members to see how they’re doing and their progress with projects.
Your performance management strategy ultimately relies on active and valuable engagement with employees and an organized system to keep track of it. That’s where a performance management system comes in.

What is a Performance Management System?
The best way to ensure your own performance management efforts are on track is to use a dedicated system.
Your performance management system should aim to support all employee engagements as well as provide the resources needed to grow your organization. From keeping a system of all pertinent job roles with descriptions to digitizing the entire employee review process, your solution should maximize efficiency, not hinder it.

With the right performance management system, you’ll receive the following benefits:
- Consistency across performance management processes
- Improvement of training processes from identifying gaps or lags
- More valuable feedback for employees based on key data
- Improved employee engagement by better defining roles
- Streamlining the performance management review process
Because all of your employee and engagement data is kept within your software system, managing performance is a much more streamlined process. But what kind of performance management system is right for you?
Your performance management system can either be made up of standalone tools, a comprehensive platform, or a modular solution that grows as your organization does.
Standalone tools are convenient and usually cheaper solutions, as they’re designed to target a specific need. However, this might not be the best choice once your organization grows and more performance management requirements need to be met.
For instance, let’s say you have a standalone tool for performance reviews. Once you expand your system with tools to handle payroll and compensation, there’s a risk that the tools won’t work together and it’ll get even harder to manage your data.
On the other hand, more comprehensive platforms will likely meet any need that might come up. But, these are also more expensive and harder for those with a smaller budget.
Modular performance management systems consist of a platform where tools and features can be added or removed as you see fit. This not only ensures that the solution is customized to your exact needs, but that it’s also affordable.

Why your growing organization should invest in a performance management solution
If your organization or business is on the smaller side, with current annual expenses averaging less than $5 million, you might not think a performance management system is necessary. After all, there aren’t that many people on your team. Managing your employees might seem doable with just a couple of spreadsheets.
However, if you ever expect to grow, a performance management system is crucial.
It’s just going to get harder to keep track of important data points and follow along with each employee’s performance as you have more and more people to consider. Further, if you ever decide to flesh out any other HR strategies, tools, or employee benefits, a performance management solution can help keep data centralized and ensure you don’t miss out on any key points.
One of the biggest barriers to investing in performance management tools as a smaller business is that they can be expensive.
However, many performance management solutions are now affordable for growing organizations like yours. That’s why modular systems can be such an effective choice for smaller organizations. No matter what, your performance management solution will be prepared to support your organization.
To get a better understanding of the system that’s best for your organization and its current standing, consider meeting with an HR specialist and consulting firm. At Astron Solutions, we work closely with you to provide you with insights on how to best approach your performance management efforts and the tools you might need to accomplish them.


The Key Elements of a Performance Management System
What exactly should your performance management system do for you? You already know that performance management consists of a lot of your daily HR tasks, so it’s important that your own solution is able to meet as many of those needs as possible.
Here are some of the top features that your performance management system should have:
- Performance review management system. Make sure you have a dedicated system that organizes your performance review process. Top tools can even update review forms in real-time and provide employees with accurate performance scores.
- Ongoing communication and feedback tools. Your performance management system should provide the tools for you to keep up with your employees, especially after you’ve given them a project or recent feedback. This way, you can better keep track of performance and recognize those who are putting in the work.
- Organizational chart of company structure. Having a dedicated organizational chart of your company structure is a great way to visually display each position and role as well as the relationships between them. If any changes are made, your performance management system should reflect that in real time!
- Staff advancement and growth tracking tools. Your performance management tools should definitely not only track staff advancement, but also help you make those promotion decisions. Top tools will give you access to all team members, their mentors, and their targeted growth position(s). This way, it’s easy to find the best employee to fit a new position.
- Exit interview and analysis. Use your performance management system to develop customized exit interview questions to better understand why individuals choose to leave. From there, create key reports to learn about your organization as well as individual managers and departments.
Your performance management system should support the processes that your organization already has. After all, you likely already conduct some sort of performance review process. A dedicated system simply ensures that everything remains streamlined, even as more and more employees join your team.
Remember, your performance management software should grow as you do, so a scalable solution is your best bet. For more help, talking to a consultant can always provide valuable insight.
Wrapping Up
A dedicated performance management system ensures your organization lays down the foundation for growth. To learn more about this topic as well as other key subjects around HR management, explore the following resources:
- Performance Management Software | What You Need to Know. In this article, we explore some of the best performance management software solutions available. It’s a great resource if you’re shopping for a new system.
- Nonprofit HR | Complete Overview for Small Organizations. If you run a nonprofit or a similar small organization, it’s always a great idea to get an HR overview. After all, a dedicated HR strategy is one of the top ways to keep your operations running smoothly and every team member on the same page.
- Talent Management Software | 12 Top Providers & Buyers Guide. Talent management software is a great tool to help facilitate your HR and compensation strategies. Learn about the top providers here.

‘Yearly appraisal’ or ‘performance management’ is a basic norm in every company. Employees receive their salary increments based on their performance. This is a crucial period for the human resource team as the appraisal for all the eligible staff needs to be done at once.