Employee engagement in the US is not up to the mark, reaching its lowest level in a decade last year with only 31% of employees engaged, according to a Gallup study. The findings pointed out that only 10% of employees feel engaged after getting negative feedback for their work. 

Not only that, about 30% of them, especially Gen Z, start looking for a new job as soon as they get negative reviews for their work performance, said the study. 

Gen Z employees were five points less engaged as compared to the previous year with significant decline on the most fundamental engagement elements, it said. The elements include “clarity of expectations, receiving recognition for work, being provided with materials and equipment to complete their work well, provided with opportunities to do what they do the best, feeling cared about, and given opportunities to develop”.

The findings indicated one thing that the traditional performance review system has flaws, as felt by many employees, who said that annual performance reviews were outdated and less effective. More than 50% of employees felt that the yearly reviews don’t help them to improve on their work, said a Workhuman study.

Another study by Gallup pointed out that 80% of employees who received meaningful feedback in a week time are fully engaged. Moreover, those who received daily feedback as compared to annual ones, were four times more likely to be “motivated to do outstanding work”, it said.

Therefore, in this ever-changing business landscape, companies need effective and technology-driven performance management tools, which can empower them to align individual contributions with the main goal, cultivate a culture of continuous improvement and fully utilise the human capital.

Recognising the role of technology and data in addressing this issue, a lot of performance management software tools have been developed to revolutionise the way companies track employee performance level and overall talent development. So, let's discuss some of the features in such performance management tools.

What your performance management tool should help you do

A good performance management tool will help you in making development plans and common goals, continuous feedback when needed, regular one-on-one conversations, 360-degree feedback compiled from peers, managers, and senior leaders. Here are some things you may want it to do.

Collect and analyse employee data: A good tool will help you automatically collect information you need on employees' performance, and will have features that let you analyse the tool and even present the results of your analysis to others.

Track employee performance: Depending on your preference, you may want the tool to provide the capability for continuous tracking. Your tool should support various review formats and review cycles, whether annual or quarterly, or even weekly check-ins; it should be able to document performance and keep track of achievements. Some tools may have an instant feedback feature.

Customisability: Depending on what works for your company, you may want customisable review cycles or review formats and templates, customised performance rating scales, or even customised feedback methods.

Manage employee engagement: Some tools include features to recognise achievements, including sending team-wide or company-wide communications, or linking recognition to compensation based on company policy.

Support employee development: Some tools offer the ability to incorporate continuous employee development plans into their performance tracking systems, including personalised learning paths.

Integration of entire employee lifecycle: Tired of using multiple platforms? Some tools support the entire employee lifecycle, from applicant tracking and onboarding to employee engagement, performance management, learning, and end of hire when the employee leaves. 

Industry, size, or location specific: Some tools are designed specifically for companies in certain industries, or for companies of a certain size, e.g. SMEs. These tools may be deliberately streamlined, with fewer features or certain features meeting the needs of a particular sector.

AI-powered: Some tools that incorporate generative AI are able to suggest feedback and actionable insights, and even help with communicating the above to the employee.