Performance Management & Appraisal Systems: What Startups & SMBs Should Know


Performance Management Time and again, management experts have cited that employees are one of the strongest pillars of an organization. For most startups and small business, attracting good talent is a challenge and retaining them is even a bigger challenge. That’s why it becomes important for startups to reward their employees very often and use performance management and appraisals.

But as a Startup/SMB, why does a performance management and appraisal system matter?

For small business and startups, especially the latter, HR management activities such as attendance management and leave management are documented on paper or maybe a spreadsheet. However, these are inefficient and time consuming methods. The same goes for methods for performance appraisals. Many startups either keep it subjective or download a basic form off the web, get it filled and that’s about it! As a company that is growing, it becomes difficult to manage the increasing number of personnel, and systems are needed to ensure there are no mistakes. A software for performance management and appraisal enables on organization to bring in more efficiency, especially for growing companies.

Data, Analysis, Data
When companies use subjective methods to appraise their employees, there are many questions that remained unanswered, either completely or partially. When a performance appraisal is made more objective, it enables the HR to make better decisions. The best way to implement appraisals that are objective is to use performance management and appraisal software. Both the sides, the company that is appraising and the employee who is getting appraised, can carry it out objectively and then use the numbers for analysis and improvement. While the employee benefits from his appraisal analysis, the organization can use the data of all the employees for broader analysis and better HR management.

More Features
When employee-related tasks such a performance management and appraisals are automated, there are several advantages that a small business and startup gets. Generally, appraisals take place during a particular period. However, using performance management and appraisal systems you can carry out appraisals for an employee any time of the year, and maybe twice in a year depending on the employee. In addition, you can streamline the process. Many startups have a setup where the manager sits in one location while the employee sits in another location. Instead of couriering back and forth appraisal forms, both can use the system.

At sumHR too our engineers are building a performance management and appraisal system that will be integrated in our cloud-based software.

What are your expectations from a performance management and appraisal software? Use the comments section below to share your views.

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  • Seemab

    The concept is good indeed. As far as the organisation is an SME there is bound to be some amount of subjectivity. Being objective doesnt always help especially when the person in context is holding a key position in the organisation and when his objective appraisal might affect his productivity or worse might even lead to his resignation.

    A couple of subjective factor could be: (With ref to a software company)
    – skill that the employee brings in
    – time period left for completion of his contract
    – Supply of the said resource in market etcetera…

    So for an SME a mixed approach is best suited wherein the management
    have the scope to consider certain other factor which an objective
    approach might deny.

    • sumhr

      Hello Seemab, thanks for visiting the sumHR blog! Yes, we do agree. A small business does need a mixed approach. In fact, we are implementing the performance appraisal module soon and this is a point that the sumHR engineering team will be keeping in mind. :)

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