Best Employee Performance Management Software 2025

What is Employee Performance Management Software?

Employee Performance Management software is a tool that helps companies evaluate an employee’s performance and ensure that employee goals are aligned with the goals of the department or company. These features can be used to drive performance evaluations, improvement plans, career advancements, and salary negotiations.

In a typical performance review cycle, an employee would use the Performance Management software to set goals and provide progress updates to these goals at multiple times during the year. A manager would then document their review of the employee or goals, document their conversations, and outline any changes or improvements needed.

Performance management software streamlines and standardizes this process to ensure that the work goals remain in alignment with the business goals and measure whether the productivity of the employee meets acceptable levels. It also enables more consistent, frequent, and impactful coaching processes. Improved coaching helps correct underperforming employees and highlight standout workers.

In addition to the performance reviews and improvement, some vendors bundle employee performance management software with other strategic HR functions. Some may provide training courses or modules. Others provide tools to map out career development trajectories or talent assessments to identify and promote future leaders.

Performance management software can often be bundled with a full HR suite, including tools for recruiting, onboarding, and payroll. The standalone performance management solutions will instead integrate with other HR software, such as HRIS or payroll systems.

Employee Performance Management Features & Capabilities

Performance management products are likely to have different features and capabilities by product, especially if they are part of a broader HR suite. However, performance management software should at least have most or all of these features:

• High level dashboards
• 360 review - ability to capture feedback from subordinates, colleagues, and supervisors
• Goal or OKR (Objectives and Key Results) tracking
• Capabilities for traditional or non-traditional performance review cycles
• Development and succession planning
• Automated review cycle reminders
• Integration with third party productivity or training apps

Employee Performance Management Software Comparison

Consider these factors when comparing employee performance management software:

1. Point Solution or Talent Management Suite: Does the business need a standalone tool for performance management, or would it benefit from a broader talent management package? A point solution is cheaper as a line item and may have more robust features, but may not integrate as smoothly with other tools like applicant tracking, onboarding, or other HR functions.
2. Reporting & Analytics: What kind of reporting and analytics are most important to the business? Virtually every performance management tool has a reporting function, but not all are equally robust or come with the same prebuilt dashboards or customizability. Reporting functions can be crucial to informing succession planning and informing strategic talent decisions.
3. Company Size: Performance management software will vary in what business size each tool focuses on. Enterprise-targeted platforms are more likely to be bundled with other HR functions, while SMB-focused tools will emphasize customized packages and scalability to grow with the business.

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Pricing Information

Some employee performance management solutions come bundled within comprehensive HR platforms which will increase the monthly cost. If you are just looking for performance management software, you can expect to pay per user per month (usually between $3 and $15) and a set-up fee (in the $800 - $2,000 range).