5 Performance Management Tools

5 Performance Management Tools

The process of setting up an environment of motivation in an organization, where employees and managers are reviewing themselves regularly, is known as performance management. This article lists 5 Performance Management Tools categories. These tools work towards the common goals of the organization, and support techniques needed for the growth of any organization.

Why Use Performance Management Tools?

Organizations need to follow performance management techniques. Why? Because they help make the workforce more skilled and efficient.  Performance management also helps increase the overall productivity of the organization. Moreover, if an organization does not follow a performance management system, it frequently fails in the process of employee motivation. Because of this, their employees become directionless and disengaged from work.

Performance Management acts as a vital process for modern organizations. It helps organizations become more successful and to stay ahead of the competition. Mainly, Performance Management involves measuring, reporting, and managing the progress of the organization. Finally, Performance Management improves the performance of the organization both at an individual and corporate level.

Types of Performance Management Tools and Techniques

Every organization, whether commercial or non-commercial, chooses to monitor their overall progress yearly, monthly, or weekly. Some organizations do these checks daily or continuously. The frequency of monitoring depends on the amount of work and the type of organization. To help keep track of the progress, organizations choose one or more of the many useful Performance management software and tools are available. These tools simplify the work of the organization and also provide benefits to the employees. These Performance management tools are: 

  • Performance Appraisals
  • 360-degree Feedback
  • Key Performance Indicators (KPIs)
  • Personal Development Plans (PDP)
  • Reward and Recognition Programs

These are the top 5 Performance management tools used by most of the organizations. Each of these tools has its benefits, features, specifications, and flaws. Each organization must decide which type of Performance Management Software is suitable for their organization according to their needs, demands, and growth.

1. Performance Appraisals

Performance Appraisals are one of the commonly used top 5 Performance management tools. Above all, Performance Appraisals are a potent tool for matching goals of the individual to the common goals of the organization when used correctly.

To get the best information and correct output from this tool, employees need to take care that the Appraisal process is honest, fair, regular, and constructive. In addition, two-way communication should take place. In other words, you must be mindful of these points, appraisals can be demotivational for the organization and can lead to a decline in the performance of the organization. Also, appraisals also help identify the team members who are not performing up to expectations. Further, appraisals also help management spot those who have landed in the wrong job.

2. 360-degree Feedback

360-degree Feedback tools usually deal with the evaluation and assessment of the employees who could be either internal or external. However, the main question which this tool must answer is, “How well are the employees performing?” Further, it provides every individual of the organization with a detailed assessment of their performance based on the views of the people for whom and with whom they work.

These people include the Supervisors, Managers, Colleagues, Customers, Suppliers, Agents, and everyone that touches an organization. The reports or the results are always confidential and are usually presented to the employees by their managers. Therefore, 360-degree Feedback tools are good measures in initial employee training and development. Above all, when this tool is used effectively and efficiently, it helps in simplifying the review process as it considers the opinions of many people instead of reviews of just the manager of the employee

3. Key Performance Indicators (KPIs)

A KPI is an excellent Performance Management tool.  KPIs provide different ways to measure how well the organization, its units, projects, or the individual employees are performing to meet the organizational goals and objectives. In addition, KPIs are also a form of HR measurement. KPIs function not only in terms of measurements but also enable performance conversations.


These data-driven conversations also help in making better decisions for the organization. Well-designed KPIs act as an essential navigational instrument, which gives the exact and clear picture of the current levels of the performance of the organization. KPIs also show whether the business has achieved its goals and objectives.

4. Personal Development Plans (PDP)

A personal development plan is an expertly and efficiently designed action plan. PDPs are based on the needs, wants, and awareness of the actions that are going to support both personal and organizational development. PDP’s are most often used to identify various types of training and development needs. In other words, creating a Personal Development Plan is an action plan for fulfilling these needs. It helps individuals to define how they want to grow and to find out how they can achieve their goals.

Personal development plans build the interest of the individual towards the company and help them improve their performance in the organization. To ensure high performance of the organization, different Performance Management tools, techniques, and processes like the PDP, act as an essential part of the organization for increasing performance while supporting personal growth.

5. Reward and Recognition Programs

The excellent performance of the employees should always be praised and rewarded. Motivation disappears when employees feel unappreciated. In other words, their hard work and excellent performance go unrecognized and unrewarded. Demotivation makes the employees deviate from the organization’s overall objectives and goals. Therefore, every organization should organize rewards and recognition programs, which are an essential part of the whole performance management system of the organization.

Recognition programs also help in celebrating the high performers of the organization. In addition, many big organizations think reward and recognition programs as a source of distributing financial rewards and incentives like bonuses and increments. Still, pure praise and recognition of hard-working employees is an essential aspect of maintaining morale and the high performance of the employees.


If you select and use these 5 Performance Management Tools, you will find that your organization and your people perform better and feel better about the work.


Workflow can be a real benefit, too. Read about that here.