Automated Performance Management Systems | Features, Benefits, And Making the Shift

Manual processes are fine when your organization is small and the structure is simple but as soon as you start to scale, everything becomes a chaotic, logistical nightmare.

That’s why HR leaders look for an automated performance management system to streamline, consolidate, and standardize their processes.

But should they, when traditional performance management—automated or not—is ineffective at measuring performance?

Or should they consider performance enablement where the focus is on real-time, continuous feedback and development?

In this guide, we aim to find out. 

Here’s what we’ll cover:

• What is an Automated Performance Management System and Is There a Better Way?
• Why HR Teams Should Automate Performance Management and Enablement
• How to Shift from Manual Processes to an Automated Performance Management System
• Who to choose (from a list of the 3 Best Automated Performance Management Systems and Softwares)

What is an Automated Performance Management System and Is There a Better Way? 

An automated performance management system is a software an organization uses to automate the process of employee performance evaluation.

These systems are designed to streamline and standardize the traditional processes of performance reviews, goal setting, feedback collection, and reporting, making them more efficient, consistent, and scalable.

But as we hinted before, traditional performance management itself is outdated and inefficient in measuring and improving employee performance.

One Gallup report showed only 2 out of 10 employees believe their performance is managed in a way that motivates them to do outstanding work.

This lack of confidence has prompted a shift these last few years toward performance enablement. 

Performance enablement platforms automate processes associated with traditional performance management practices. But they also improve those processes to be more continuous, unbiased, and strategic. 

To give you an idea of how these approaches differ, we’ve created a side by side table below:

7 Key Features of Automated Performance Management Systems

Below we’ve listed the key features you should look for in your automated performance management systems. 

We’ve also provided a list at the end that shows how and where performance enablement can take these features further in their effectiveness.

1. Goal/OKR Setting and Tracking You Can Continuously Monitor, Update, and Adjust

An important feature of automated performance management systems is that goals can be set, monitored, and updated in alignment with organizational objectives. When we say updated we don’t just mean with progress updates. We also mean the employee can be agile and adapt the goal to changing business needs.

This is in contrast to manual processes where employees set and forget goals in isolation from one another.

Top tip: We recommend that your automated performance management systems give visibility to managers AND employees on their progress toward personal, team, and company goals. This approach clarifies expectations and empowers employees to take ownership of their contributions to the company's success.

2. Feedback and Praise That’s Timely and Effective

An automated performance management system should facilitate continuous, real-time feedback and recognition between all employees, fostering a culture of appreciation and development.

Top tip: Want feedback between employees to happen often? Use a system that nudges them to give feedback within their existing tools. For example, users of Mesh can give peer-to-peer feedback within Slack or Microsoft Teams directly.

3. Unbiased 360 Reviews 

Automated performance management systems should help organizations overcome the bias that comes with manual ones. 

It will collate data from feedback received throughout the performance period from multiple sources so that managers have a holistic view of employee performance. 

Top tip: Find a platform that gives managers and employees oversight on the entire review process and provides data that shows how employees ratings have changed over time.

4. Done for You Engagement Tracking

You want your automated performance management system to monitor employee engagement and satisfaction levels with little oversight required from you. 

The information collected can then be used to identify areas for improvement to boost employee morale, productivity, and retention.

Top tip: Choose a platform that has templates you can use and provides insights based on the information it pulls together when employees complete them. This will cut down the admin time you need to spend and get you implementing impactful HR initiatives faster. 

5. Real-Time Capability Monitoring

Manual performance management processes don’t track development or capabilities in employees. They leave development to chance. But automated systems can track the development and proficiency of skills across the organization, highlighting strengths and areas for growth.

It’s reflective of what your team’s capabilities are at any given time because employees can update their progress. Managers can then refer to these updates during development conversations. 

Top tip: We recommend choosing a platform that links feedback and praise to specific capabilities so that it can guide employees to focus on development areas that will make the biggest difference to their career and organizational success.

6. More effective manager to employee 1:1s

Automated performance management systems will put 1:1s into employee schedules to ensure regular touch points between managers and their team members. 

When the 1:1s are had, the system will use AI to take notes and provide data and information to the managers to facilitate meaningful conversations.

Top tip: Get a platform that helps employees plan and prepare for the conversation so that the time is used constructively. 

7. Automated Data Analysis and Reporting

The problem with manual systems is it takes hours of time to pull data and gather insights. An automated system will do this all for you and present the information in digestible formats.

You’ll get regular reports on performance trends, helping inform strategic decisions across HR and management.

‍Top tip: Use the data from these reports to understand who your top performers are and flag any performance issues that may be developing. You can then link that data to reward decisions and to support employees in need. 

8. AI-Powered Nudges & Coaching Support

Automated performance management systems remove the burden of HR to oversee every step of the performance process and empowers managers and employees with the information they need to review and reflect on performance. 

The introduction of AI to automated systems streamlines all of that. The right system will even help employees improve the quality of feedback and take notes for them in video meetings.

Top tip: Find a platform that uses AI to improve behaviors and performance by coaching managers and employees on what they should do next and how to do it. For example, the Mesh platform has built our own AI system called Maven. Maven helps employees set measurable goals aligned to the business, summarizes 1:1s for you and recommends topics of conversation, and improves the quality of feedback.

Performance enablement systems will go even further by:

• Facilitating habit formation through timely nudges
• Improving the quality of feedback, performance reviews, and notetaking with proven frameworks and AI
• Focusing on equipping managers to coach and support the development of employee capabilities linked to business needs
• Embedding regular touchpoints and feedback into employee’s day-to-days
• Customizing automated processes to your organization
• Surfacing data points from the entire year to inform unbiased reviews

That’s what we built Mesh to do. It ensures employees aren’t just monitored on performance, they’re enabled to improve.

Why HR Teams should Automate Performance Management & Enablement

If you’re looking for an automated performance management system you’re more than familiar with the logistical headache that comes from using manual processes. 

You would have faced:

• Overwhelming administrative burden – think an endless sea of paperwork and spreadsheets, manually compiling and comparing performance evaluations, feedback forms, and development plans.
• Patchy data – managers may forget to submit performance reviews on time, or do so using different formats and criteria, leading to a patchwork of data that's hard to analyze
• Inefficiency and wasted time – gathering, compiling, and analyzing performance data is not only tedious but also incredibly time-consuming. HR teams spend hours navigating through different files and spreadsheets, trying to aggregate data for meaningful insights.
• Lack of consistency across managers - managers might apply different standards and criteria when evaluating performance, leading to unfair assessments and perceptions of bias.
• Difficulty in tracking and aligning goals - HR teams struggle to ensure everyone is moving in the same direction when they rely on disparate documents and systems that don't communicate with each other.
• Limited feedback and development opportunities - Manual systems often lead to infrequent and backward-looking performance reviews that focus more on past behavior than on future development.
• Challenges in employee engagement and retention - lack of timely feedback, recognition, and personal development can lead to dissatisfaction and high turnover, as employees seek organizations that offer more dynamic and supportive performance cultures.

Automating performance management, or better yet—enablement, helps HR teams overcome these challenges and enhance the effectiveness, and fairness of performance evaluation processes, benefiting the entire organization.

Key Benefits for HR Teams, Managers, and Employees

Below we’ve listed the key benefits you’ll see from introducing an automated performance management system into your organization. 

It’s broken down by HR, Managers, and Employees and we’ve approached it as if the system leans more toward performance enablement.

For HR Teams:

1. Streamlined Processes: Automation simplifies and streamlines the performance management process, reducing the administrative burden on HR teams.
2. Data-Driven Insights: Automated systems provide valuable data analytics and reporting features, enabling HR to make informed decisions based on performance trends and metrics.
3. Consistency and Compliance: Ensures a consistent application of performance management processes across the organization, aiding in compliance with legal and regulatory standards.
4. Enhanced Strategic Role: By automating routine tasks, HR professionals can focus more on strategic initiatives, such as talent development and organizational culture building.
5. Improved Performance Tracking: Makes it easier to track and manage organizational and individual performance against goals, facilitating more effective talent management.‍

For Managers:

1. Real-Time Feedback: Facilitates continuous feedback and communication between managers and their teams, promoting a culture of ongoing development and performance improvement.
2. Objective Assessments: Helps in making performance evaluations more objective by providing clear metrics and benchmarks for assessment.
3. Time Savings: Reduces the time spent on manual performance management tasks, allowing managers to focus more on coaching and developing their teams.
4. Better Decision Making: Access to comprehensive performance data and trends helps managers make better decisions regarding promotions, compensations, and development opportunities.
5. Goal Alignment: Ensures that individual goals are aligned with team and organizational objectives, promoting a unified direction and purpose.

For Employees:

1. Clear Expectations: Provides employees with clear goals and performance expectations, making it easier for them to understand what is required for success.
2. Personal Development: Offers tools for self-assessment and development planning, empowering employees to take charge of their own growth and career progression.
3. Recognition and Motivation: Enables timely recognition of achievements and contributions, boosting employee motivation and engagement.
4. Greater Transparency: Creates a more transparent performance management process, where employees have insight into how their performance is measured and evaluated.‍
5. Feedback for Growth: Encourages a culture of feedback, where employees receive constructive feedback regularly, helping them to continuously improve and develop their skills

How to Shift from Manual Processes to an Automated Performance Management System

If you’re ready to make the shift, follow these 8 simple steps:

Step 1. Assess current processes

Begin by taking a hard look at your current performance management practices. It's all about uncovering the gaps, the bottlenecks, and the frustrations that plague your manual system. 

Don’t just reflect on the HR side of things—ask your employees and managers about their perspective. 

Step 2. Define objectives and requirements

Clear objectives are your north star. 

Ask yourself, "What do we want to achieve with this new system?" Is it to ramp up efficiency, gain deeper insights, or boost employee morale? 

It’s okay if you want all of the above and more! But it may be worth putting them in order of priority.

Then, draft your wish list of features—think goal setting, feedback loops, analytics. This clarity will guide your journey, ensuring the solution not only fits but enhances your organizational ethos.

Step 3: Research and select a system

There are plenty of performance management tools on the market, so this phase is about evaluating the best and making your choice. We have a list of our top three toward the end of this piece. 

Click here to jump ahead to our top 3 automated performance management/enablement softwares.

Assess the tools based on your defined requirements and desired features while also considering factors like cost, scalability, user-friendliness, and integration capabilities.

Once you have a shortlist, request demos so that you can see the system in action.

Then choose the one that best meets your performance needs.

Step 5: Plan system implementation

With a platform chosen, it's time to chart a course for rollout. 

This involves the nitty-gritty of data migration, system integration, and timeline setting. 

It's a phase marked by meticulous planning, ensuring that when the switch is flipped, the transition is seamless, and your data remains secure and intact.

Your chosen performance management platform should have a customer success team on hand to help you navigate this process.

Step 6: Communication and training

Change can be daunting, but clear communication can ease this transition. Announce the shift with optimism, highlighting the benefits and addressing concerns head-on. 

Tailor training sessions to the varied needs of your users, ensuring everyone from HR to managers, to employees, feels confident and prepared. This step is pivotal in fostering a positive outlook towards the new system.

Again, a good performance management platform will lead on this and have training materials at the ready. They’ll likely lead workshops to onboard the HR team as well as managers. 

Step 7: Rollout

The platform should come equipped with tools designed to facilitate a smooth introduction, from intuitive user interfaces to comprehensive support resources. Use these features to guide your team through the transition, minimizing disruption and maximizing adoption. 

For more tips, watch out webinar: How NOT to butcher your performance management redesign

Step 8: Rely on your provider to help you adjust

The work doesn't end at rollout. Keep a pulse on how the system is meeting your objectives, and stay open to feedback. This continuous loop of evaluation and adjustment ensures your performance management system remains dynamic and will evolve with your organizational needs.

Your customer success contact for the tool will help you make these pivots and facilitate adoption amongst your company. 

3 Best Automated Performance Management Systems and Softwares

Now that you know what to look for in your automated performance management system and how to make the switch from manual processes, let’s see which of the top 3 software on the market is best for you. 

Coming in at #1 is our own platform, Mesh.ai. That’s because we genuinely back our platform’s ability to reduce the administrative burden on HR while improving organizational performance across the board—from senior employees and managers down to junior and entry-level talent. And so do our clients. 

But we also know we’re not a fit for everyone. So we’ve included two of our fiercest competitors on the list. They’re great for their own reasons which we’ll highlight below. 

For each tool we’ll provide:

• an honest overview of its features
• real user experiences and reviews
• a breakdown of costs 

1. Mesh.ai | The Automated Performance Management Tool That Creates Better Managers & More High-Performer Employees

Mesh is more of a performance enablement platform than it is a performance management system. And that’s only a good thing.

While you’ll have all of the standard features of a performance management tool such as Goal Setting, 360 Reviews, and Engagement Surveys, you’ll also have nudges, next-best action recommendations, and AI enhanced feedback to consistently improve performance. 

With Mesh, you’ll be:

• empowering managers to have ongoing, meaningful conversations with their team
• facilitating behavior change through timely nudges that prompt next-best actions
• making it easier to give relevant, effective, and unbiased feedback and reviews
• aligning individual goals to the needs and strategy of the wider organization
• highlighting to employees capabilities they can improve and where they’re succeeding already
• equipping HR teams and managers with data and insights to inform strategy

Mesh Pros, Cons, and User Reviews

When reviewing what our uses have to say, a few pros and cons stand out:

Pros:

• Improved 1:1 management where managers feel empowered and informed
• Management of goals with the ability to set, measure, and stay on track.
• Automation of performance analysis, saving managers and HR from clunky, time-consuming excel sheets

Cons:

• Unable to download documents and data from the platform
• Lack of employee onboarding specific features
• Employees who are collaborators for goals can edit targets

Reviews from Mesh users:

Want to see more? Head to our G2 profile.

→ Book a demo and see for yourself how Mesh enables automated performance management and enablement. ←

Mesh Pricing

Our pricing is designed to meet different needs and scale as you do. 

We offer three tiers*: Base, Premium, and Enterprise.

• Foundations: $4 per user, per month
• Growth: $8 per user, per month
• Excellence: $12 per user, per month

You can see what features are included in each:

2. Lattice | The Best Automated Performance Management Software for Linking Compensation to Performance

Lattice is an automated performance management system that links compensation to the performance of each employee. 

HR departments and managers are able to make informed decisions about pay raises, bonuses, and promotions based on clear, quantifiable performance data. 

This can boost employee morale and trust in the performance management system as they get clarity over how their pay structure works alongside performance expectations. And when employees are bought into performance systems, they’re more likely to meet and exceed expectations.

Lattice also comes with the standard performance management features, giving you a comprehensive tool you can rely on to monitor performance. 

Pros:

• Clear visibility into how performance impacts compensation, promoting transparency and trust within the organization.
• Organizations can tailor performance metrics and goals to fit their unique needs
• Users rave about the 1:1 features (ability to schedule, prep, and review) 

Positive review from a Lattice user:

We find Lattice user interface to be intuitive and user friendly. It's easy for employees to navigate and access the information they need quickly. Custom optimization options allowed us to tailor our specific performance management process and metrics, which has been a significant advantage.

Cons:

• Many desirable features are ‘add-ons’ making the tool expensive
• Often delays in promised product improvements
• High Costs

Negative review from a Lattice user:

Unfortunately Lattice has had some pretty bad misses on their product roadmap and delivery. They made some lofty promises (getting weighted review score calculations out by Jan 2024, launching hidden talent reviews in Q2, enabling group 1:1s in Q2 etc) that have ALL been postponed, delayed, or the launch was very disappointing in my opinion. Lattice apparently laid off quite a few Engineers in Q1'23 which probably impacted their ability to meet their product updates/enhancements roadmap. I have hopes that they'll turn it around, but this has been pretty disappointing thus far.

Lattice Pricing:

Lattice starts at $8 per user, per month for one of its base packages which can be either ‘Performance Management’ or ‘OKRs & Goals’. 

You can bundle those two for $11 per person, per month.

Any features on top of that incurs additional costs:

For the full suite of features, you’d be looking at $25 per user, per month. If you’re a 250 person organization that could be about $75,000 a year.

3. 15Five | Best Automated Performance Management System for External Coaching

15Five is an automated performance management system with coaching and development opportunities for managers built right in. 

They even have a virtual classroom where users can learn best-practices. Do keep in mind that the training features only target managers , so you’ll still need an L&D platform to upskill the rest of your organization. 

Another area where 15Five shines is its analytics dashboard. You can use it to showcase just how much HR impacts important business metrics. 

Pros:

• Combines goal tracking with feedback, allowing for real-time progress assessments and adjustments
• Offers extensive resources and training for managers and employees to enhance their coaching and feedback skills
• Customizable check-in questions, enabling organizations to tailor conversations and feedback

Positive review from a 15Five user:

It's scalable and has some great features that aren't locked behind a higher tier/out of reach of small companies.

Cons:

• Some users find the full range of features overwhelming at first
• Training opportunities aren’t effective for all learners
• Clunky UX

Negative review from a 15Five user:

Sometimes the UX feels a bit clunky, and it can be slow to load on occasion. I feel the OKR tracking mechanism could improve, as sometimes it feels complicated to submit them, edit them, and set them up.

15Five Pricing

15Five’s pricing starts at $4 per user/per month. It’s billed annually. 

It’s broken into 3 pricing tiers:

• Engage: $4 per user/per month
• Perform: $10 per user/per month
• Total Platform: $16 per user/per month

Common Questions on Automated Performance Management Systems

1. How does automation increase employee productivity?

Automation cuts down on manual tasks and errors, offers real-time feedback, and clarifies performance expectations. This allows employees to concentrate on meaningful work, boosting their motivation and productivity.

2. How do you automate performance appraisal?

You automate appraisals by using software that schedules evaluations, gathers feedback from multiple sources, and analyzes performance data. This ensures appraisals are consistent and saves time, making the process more efficient and objective.

3. How much does an automated performance management system cost?

Costs vary, depending on the size of your organization, the features you need, and the provider. It can range from a few dollars per employee per month to significant investments for comprehensive enterprise solutions. Most vendors offer scalable pricing to suit various needs.

The Mesh platform starts from $4 per user, per month.

4. Are performance management systems the same as performance evaluation systems?

No, they're not the same. Performance management systems encompass a wider range of activities aimed at ongoing improvement, including setting goals and developing employees. 

Performance evaluation systems focus specifically on assessing employee performance at certain intervals and are typically a component of the broader management system.