Automated Performance Management System Best Practices

published on 30 January 2024

Most organizations would agree that traditional performance management approaches often fall short.

Implementing an automated performance management system can enhance employee evaluations through continuous feedback, data-driven insights, and integrated recognition programs.

This article outlines best practices for utilizing automation to optimize the performance review process, boost employee engagement, and improve talent management decisions.

Introduction to Automated Performance Management Systems

Automated performance management systems utilize technology like AI and machine learning to streamline the employee review process. By automating manual tasks, these systems aim to save HR teams time while enhancing fairness through unbiased evaluations.

Understanding the Scope of Performance Management Automation

An automated performance management system removes the manual effort needed to gather performance data, set goals, and provide feedback. Key features include:

  • Continuous performance tracking with surveys, peer reviews, and productivity metrics
  • Automated goal setting aligned to company OKRs
  • Personalized coaching tips and development plans
  • Scheduling performance review meetings and compiling performance summaries
  • Analyzing performance data trends to identify strengths and growth areas

By handling time-consuming administrative work, these systems allow HR to focus on strategic priorities.

Automated Performance Management System Advantages and Disadvantages


  • Increased efficiency - Automation eliminates manual tasks so HR can focus on high-value work
  • Enhanced fairness and consistency - Algorithms mitigate conscious and unconscious bias
  • Better insights - Aggregated performance data reveals macro trends

Potential Drawbacks

  • Perceived impersonality - Some employees may prefer in-person reviews
  • Transition challenges - Adoption issues if the solution has a steep learning curve
  • Upfront costs - Budget for software, configuration, and change management

Overall, most companies find productivity and engagement gains outweigh the growing pains of adopting new technology.

Examples of Automated Performance Management Systems

Top automated performance management platforms include:

  • Reflektive - Offers real-time feedback, goal tracking, and personalized coaching
  • Lattice - Focuses on continuous performance management
  • Humu - Uses nudges to encourage positive habits
  • Betterworks - Aligns OKRs across the organization
  • DevelapMe - Delivers AI-powered skills assessments

The right solution depends on an organization's specific needs and culture around performance management.

What is automated performance management system?

An automated performance management system is software that streamlines the employee performance review process. It typically includes features like:

  • Goal setting: Employees and managers can collaborate to define SMART goals and track progress.
  • 360-degree feedback: Employees receive confidential feedback from managers, peers, and direct reports to identify strengths and areas for improvement.
  • Evaluation forms: Customizable forms with rating scales and comment sections facilitate employee evaluations.
  • Development planning: Employees and managers create personalized development plans to acquire skills needed for career growth.
  • Analytics: Dashboards and reports provide insights into team performance and enable data-driven talent decisions.

Automating performance management can benefit organizations in several ways:

  • Enhanced engagement - More frequent feedback conversations promote better communication and transparency around goals and development areas. This leads to more motivated and productive teams.
  • Unbiased evaluations - Structured, standardized review forms limit the influence of unconscious biases that can negatively impact underrepresented groups.
  • Data-driven decisions - Access to performance analytics helps managers make fair, evidence-based choices on promotions, succession planning, and other HR initiatives.

However, automated systems also have some potential drawbacks to consider:

  • Impersonal nature - Heavy reliance on software can make employees feel like just another metric in a dashboard. Combining technology with in-person coaching is ideal.
  • Change resistance - Transitioning from legacy processes to new systems can cause confusion and frustration before the benefits are realized. Clear communication of the "why" behind automation is key.

Overall, automated performance management introduces needed structure and visibility to critical talent management practices. When thoughtfully implemented, it can significantly improve productivity, engagement, retention, and advancement of top performers.

What is an example of a performance management system?

Here is an example of how an automated performance management system can be utilized in a company:

  • The company supervisor schedules quarterly one-on-one meetings with each employee to discuss performance and set goals. Prior to the meeting, the automated system pulls performance metrics, feedback surveys, and goal progress data into a customized performance review document.

  • During the one-on-one meeting, the supervisor reviews the automated performance data with the employee. This includes metrics on productivity, quality, attendance, peer feedback scores, manager feedback, and progress made on previously set SMART goals.

  • Together, the manager and employee discuss strengths and areas for improvement. They collaboratively set new SMART goals for the next quarter focused on the employee's professional development. These new goals are entered into the automated system.

  • The automated system sends out reminders to employees and managers leading up to scheduled check-ins on goal progress. Employees can update tasks and achievements through the system.

  • At the next quarterly meeting, updated performance data and goal progress are pulled by the system into a new review document to continue the process.

This showcases key capabilities of automated performance management: centralized data, customized reports, collaborative goal-setting, and continuous performance tracking. The system enhances consistency in the review process while saving managers time.

What does lattice do?

Lattice is a cloud-based performance management software that helps organizations effectively manage employee productivity, goal setting, progress tracking, check-ins, and reviews.

Key Features

  • Goal Setting - Employees can set SMART goals that align to company objectives. Managers can provide input to ensure goals drive performance.
  • Progress Tracking - Continuous performance tracking instead of annual reviews. Employees and managers can provide real-time feedback on progress.
  • Performance Reviews - Structured annual/quarterly reviews based on progress towards goals. Review templates customize the process.
  • Feedback Collection - Employees can request confidential feedback from managers, peers to improve performance.
  • Check-ins - Regular one-on-one meetings that facilitate open conversations around well-being, growth.


  • Employee Development - Lattice promotes growth mindset through constant learning, goal setting and career development planning.
  • Performance Visibility - Provides managers real-time visibility into team performance instead of waiting for annual reviews.
  • Engagement - More frequent and open conversations lead to better manager-employee relationships.
  • Agility - Ongoing performance tracking allows quick response to issues.

In summary, Lattice facilitates continuous performance management through goal alignment, progress tracking, feedback and development. This frequent engagement model better motivates and develops employees.

What software is used for performance management?

Performance management software helps organizations set goals, provide feedback, and evaluate employees. Some top options include:


Paycor offers performance management templates to streamline the process. Key features include:

  • Customizable forms for performance reviews, allowing alignment to company values
  • Automated reminders for reviews and calibration meetings
  • Development tools like SMART goal tracking


BambooHR focuses on continuous performance management through its mobile app. Highlights include:

  • Ability for employees and managers to exchange feedback regularly via the app
  • Track progress on goals and monitor performance trends
  • Access to feedback and reviews anytime, anywhere


PerformYard enables ongoing coaching and development. Notable capabilities:

  • Social recognition to motivate employees and reinforce behaviors
  • Surveys to gather feedback from peers, direct reports etc.
  • Automated nudges to managers to provide continuous coaching


Workday provides robust goal and skills management. Key features:

  • Align individual goals to organizational objectives
  • Skills graph to identify skill gaps and development opportunities
  • Calibration tools to ensure fair ratings across the organization

The right software depends on an organization's specific needs. Factors like ease of use, mobile access, and customization options should be considered.


Implementing Automated Performance Management Systems for Employees

Automating the performance management process can streamline evaluations and provide more objective insights, but effectively rolling out these systems requires thoughtful planning. Here are critical steps HR managers should take:

Performance Goal Setting with Automation

  • Align performance goals to larger business objectives so employees understand how their work ladders up
  • Ensure system tracks metrics tied to those goals so progress is measured objectively
  • Set SMART goals that are Specific, Measurable, Achievable, Relevant and Time-bound

Training Managers on Automated Systems

  • Schedule hands-on training sessions to demonstrate platform functionality
  • Explain how to provide ongoing feedback and document performance issues
  • Review how to use performance data to inform development plans
  • Ensure managers understand role shifts from scoring to coaching

Effective Communication Strategies for System Adoption

  • Inform staff early about new system and changed review process
  • Emphasize benefits like continuous feedback and goal transparency
  • Address concerns about data privacy and evaluation criteria
  • Solicit feedback during rollout to improve adoption

Customizing Automated Workflows for Organizational Needs

  • Tailor system workflows to match existing performance processes
  • Configure workflows to reflect company values and culture
  • Enable custom fields and evaluations to capture unique review needs
  • Accommodate manager preferences for review scheduling and notifications

Integrating Automated Systems with HRIS and HRMS

  • Establish single sign-on from HCM systems for unified access
  • Connect performance data to HRIS and payroll for accuracy
  • Automate administrative workflows like review reminders
  • Analyze integrated data for deeper people insights

Thoughtful change management and custom configurations enable smoother automated performance management rollouts. Keeping managers and staff informed while aligning systems to organizational needs drives adoption.

Optimizing the Performance Review Process with Automation

Automating the performance review process can provide numerous benefits for improving talent management outcomes. Here are some best practices for getting the most out of an automated performance management system:

Fostering Continuous Employee Evaluations

  • Configure the system to prompt managers to have regular one-on-one meetings with direct reports to discuss progress, provide feedback, and coach for improvement. These ongoing conversations lead to better performance.

  • Set automated reminders for managers and employees to update progress on goals, add supporting documentation, and request feedback from stakeholders. This facilitates continuous performance tracking.

  • Use real-time performance data and analytics to surface insights and discussion topics for coaching sessions. Data often reveals development areas managers may overlook.

Utilizing Performance Analytics for Talent Management

  • Review performance trends and comparisons to uncover strengths, weaknesses, and talent gaps at the organization, department, and individual levels.

  • Leverage insights from the performance data to identify top performers for succession planning and highlight areas where additional training may be beneficial.

  • Configure customized reports and dashboards for different leadership levels so each manager gets visibility into the metrics most relevant for strategic decisions.

Creating Performance Improvement Plans (PIPs) with Automation

  • Use system-generated reviews of low performers to automatically create initial improvement plan drafts for manager editing.

  • Provide templates for managers to quickly build targeted, measurable PIPs collaboratively with employees.

  • Set automated reminders for follow-up meetings and progress evaluations as defined in the improvement plan.

Enhancing Employee Engagement with Recognition Software

  • Incorporate peer recognition and rewards into the performance management process to increase employee engagement.

  • Allow employees to redeem recognition points for individual rewards like gift cards or company swag. Offer team rewards like lunches for reaching group goals.

  • Use gamification to motivate employees to complete more learning programs, support co-workers, and participate in culture-building activities.

Regular Audits to Improve System Accuracy and Fairness

  • Audit performance ratings algorithms every 6 months to confirm ratings are accurate and any differences across gender, race, age groups, etc. fall within expected statistical margins.

  • Survey employees yearly to measure perceptions of fairness in performance evaluations and recognition. Use feedback to improve workflows.

  • Review a sample set of manually-created performance improvement plans to ensure they are reasonably unbiased and actionable before manager delivery.

Evaluating Automated Performance Management Techniques and Challenges

Automated performance management systems can provide significant benefits, but also come with challenges that managers should thoughtfully evaluate before adoption.

Ensuring System Security and Compliance within Automation

When evaluating automated performance management platforms, it's critical to assess their security protocols and compliance standards. This ensures sensitive employee data remains protected. Key items to validate include:

  • SOC 2 Certification - Confirm the software meets security controls for confidentiality and privacy. This indicates the vendor manages data responsibly.
  • Encryption - Ensure all employee performance data gets encrypted both in transit and at rest. This prevents unauthorized access.
  • Access Controls - Review how the system restricts data access through role-based permissions. This further safeguards sensitive information.
  • Data Center Security - Validate the physical security of servers hosting the software and data. This protects against environmental threats.

Taking these steps verifies the automated system meets essential security and compliance benchmarks before deployment.

Strategizing Change Management for Automated Systems

The move to automated performance management software represents a notable shift for many employees. To ease this transition:

  • Communicate Early and Often - Be transparent about timelines and rationale for the new system. Address questions and concerns promptly.
  • Offer Training - Provide hands-on walkthroughs of the software before it goes live. Ensure teams understand how to leverage the technology.
  • Highlight Benefits - Emphasize how automation streamlines tedious tasks while enabling more meaningful manager-employee interactions about performance and growth.
  • Solicit Feedback - Check in regularly during the initial rollout to identify adoption obstacles and rapidly refine the transition plan.

Proactive change management is vital for user buy-in and successful automated software adoption long-term.

Optimizing Automated Systems for Performance Management

While automated systems offer turnkey functionality, expect to continually refine configurations over time for ideal performance management accuracy and utility, including:

  • Tuning Assessment Models - Adjust algorithm weighting or introduce new data sources to enhance rating precision.
  • Customizing System Workflows - Modify which events trigger reviews based on internal needs and processes.
  • Expanding Integration - Incorporate more systems like HRIS, ATS, and LMS to centralize data.
  • Monitoring Adoption Analytics - Track where and how teams use the software to identify additional training opportunities.

Proactively optimizing the platform improves its real-world value for various performance management use cases.

Integrating Automated Performance Management with the HR Tech Stack

To maximize the business intelligence automated systems provide, aim to connect with other HR technologies like:

  • HRIS - Sync with HR data on compensation, development, retention risk and more for richer insights.
  • ATS - Incorporate recruiting and hiring metrics for pipeline analysis by level, manager, or division.
  • LMS - Combine formal learning data with performance patterns to guide training decisions.

As more systems interlink, previously siloed data converges to give leadership an integrated view of the workforce and inform strategic planning.

Assessing the Total Cost of Ownership for Performance Management Software

When budgeting for automated performance management:

  • Factor both SaaS subscription costs and internal implementation resources.
  • Weigh expenses against legacy software fees and manual process inefficiencies being retired.
  • Consider scalability to support company growth targets without proportional cost increases.

Taking a holistic view of TCO beyond the sticker price provides a complete picture of automation's financial impact and ROI over time.

In summary, automated performance management delivers immense potential, but thoughtful preparation and continual refinement are vital to maximize the value these systems yield for an organization.

Leveraging 360 Degree Feedback and Employee Recognition in Automated Systems

360 degree feedback and employee recognition software can provide valuable insights into employee performance that complement traditional performance reviews. Integrating these tools into an automated performance management system can enrich evaluations with comprehensive, holistic data.

Incorporating 360 Degree Feedback Software for Comprehensive Reviews

360 degree feedback collects perspectives on an employee's performance from managers, peers, direct reports, and sometimes customers. By automating the process of gathering and analyzing this feedback, organizations can efficiently supplement annual performance reviews. Benefits include:

  • Identifying employee strengths and development areas from multiple viewpoints
  • Empowering employees with insights to improve their effectiveness
  • Reducing bias inherent in feedback from a single manager
  • Capturing real-time input tied directly to performance

Effective configuration combines survey customization, automated reminders and follow-ups, and integrated reporting.

Boosting Morale with Automated Employee Recognition Programs

Automated recognition software platforms allow coworkers and managers to easily recognize achievements big and small. Features like peer-to-peer social recognition, points-based rewards systems with redemption catalogs, and integrations with HRIS and communication tools can have significant positive impacts, including:

  • Increased employee happiness, engagement, and motivation
  • Reinforcement of behaviors aligned to company values and goals
  • Data to link recognition activity with performance metrics
  • Public praise and rewards as timely feedback

Aligning Recognition with Performance Goals and SMART Criteria

Connecting peer recognition to SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) performance goals set during reviews allows employees to support and validate progress between evaluations. Public recognition tied directly to predefined objectives also reinforces focus and priorities across the organization.

Evaluating the Impact of Recognition on Performance Metrics

Automated reporting in enterprise recognition programs correlates program usage and spend data with shifts in performance metrics over specified periods. This allows analysis such as:

  • Recognizing top performers more frequently results in a 7% average increase in sales
  • Teams with recognition ratios over 50% have 10% higher customer satisfaction scores

Understanding these correlations allows fine-tuning of recognition initiatives to optimize business outcomes.

Best Practices for Integrating Recognition into Performance Management

Strategies for seamlessly blending recognition data into performance evaluations include:

  • Mapping recognition tags and badges to competencies and goals in the review framework
  • Setting expectations for giving and receiving peer recognition
  • Incorporating recognition data into self-assessments and calibration discussions
  • Adding recognition trends to performance snapshots and development planning

Proactively planning integration touchpoints ensures recognition enhances rather than disrupts existing review cycles. The result is a comprehensive and holistic view of performance.

Conclusion and Key Takeaways

Adopting an automated performance management system can provide numerous benefits, but requires thoughtful planning and execution. Here are some key takeaways:

Define Goals and Set Expectations

  • Clearly outline performance goals and expectations for employees. This provides clarity for the system to evaluate progress. Goals should be Specific, Measurable, Achievable, Relevant, and Time-bound.

Train Managers on Using the System

  • Managers interact with the system daily, so proper training is crucial. Ensure they understand how to set goals, provide feedback, document performance issues, and track progress.
  • Integration with your HRIS, ATS, and other HR platforms optimizes data flows. This enhances accuracy by pulling relevant performance data into evaluations.

Optimize System Workflows

  • Streamline processes around performance reviews, goal setting, feedback, and development planning. Automated workflows improve efficiency.

Plan for Change Management

  • Support employees through the transition and address concerns. Communicate benefits of automation and provide resources to adapt to the new system.

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