This latest installment of the 'Small Business' series focuses on tools to support Employee Performance Management. Many small organizations that I talk to, say up to about 100 employees have no formal processes in place for employee performance management. Or if they do, they use simple Microsoft Word-based forms, that the manager fills out once per year and are then tucked away in an file in the HR department for posterity, and to gather dust.
Flickr - James Callan
Just like for Core HRIS, there are scores of competitors and solutions in this space, and sifting through the options can seem like an impossible task for the HR professional, who in a small business, is likely responsible for many, many other things besides Performance Management and HR Technology.
With that in mind, I will only review a few of the options, this list is by no means exhaustive, or even authoritative, just a starting point for the small business who wants to get started with performance management automation.
I will highlight only solutions that are vendor hosted, and delivered on a SaaS subscription basis. Most small organizations that I know do not want to get involved with installing and maintaining this kind of software on their own. The solutions that might be a fit fall into two main categories, 'big' vendors that also offer a scaled-down version of their performance management application for small business, and 'small' vendors that cater almost exclusively to the small business market.
Big Vendors
SuccessFactors - SuccessFactors is one of the best known vendors of Performance Management solutions. They have been one of the leaders in Talent Management software for several years, and have introduced many innovations such as integration with Google Docs and Chat and the ability to perform 'Stack Ranking', a comparative rating of multiple employees against competencies, (although these features are not included in the small business offering). SuccessFactors offers its solution in different 'editions', ranging from 'Mega' for customers with over 20,000 employees, all the way down to a bare-bones 'Individual Manager' edition that allows a manager to enter performance reviews for up to 25 employees. For a small business up to 100 employees, the 'Professional' edition is offered. The solution supports all the expected functionality, goal management, performance reviews, and 360 feedback. SuccessFactors has long been a leader in this space, and would almost certainly need to be included in a serious review of Performance Management solutions.
Taleo - Taleo is more well-known, and justifiably so, as the leading vendor of Applicant Tracking Systems (ATS) for the enterprise market. Recently, they have expanded the depth and breadth of their offerings to include more Talent Management applications, including Employee Performance Management. For the small business market, Taleo offers its 'Business Edition' that encompasses both performance management capability and recruiting support. Specifically for performance management, the solution supports goal management, competency definition and rating, and the appraisal itself. The employee profile functionality is also strong and highly configurable. The primary strength of the solution is the tight integration with the Recruiting module, so Taleo Business Edition for performance would probably be a strong choice if your organization was also considering using Taleo for a recruiting solution. As a 'stand-alone' solution it is competitive, but not particularly ground-breaking.
Halogen - Halogen Software offers its suite of Talent Management solutions in the same package to all its customers, regardless of their size. This is a strength, as it allows even the very small organization to take advantage of all the advanced features and new development in the application just like the giant 'enterprise' customer. Halogen's Performance Management application, known as eAppraisal offers advanced functionality including goal setting, cascading goals, an included (but expandable) competency library, multi-rater feedback, and analytics. Halogen does have customers with less that 100 employees, but typically serves larger accounts. Their solution would be a good choice for a smaller company that wants to take advantage of 'big company' features right out of the box, and with the assurance that new development and new features that are included will be available to them as well as the large customers.
Small Vendors
Appraisal Smart - Appraisal Smart offers online performance management tools that can be installed on the client's servers, or hosted and delivered in the SaaS model. The tool has a wide range of functions, from scheduled, interval based performance appraisal, ad-hoc appraisal capability, multi-rater feedback, and integrated competency library, and both spelling and legal checking. Pricing is not published on the site, but consists of two components, a one-time setup fee, and an annual subscription fee that varies based on number of users. Appraisal Smart claims to be an affordable solution for organizations as small as 20 employees. A free 7 day trial is available that may be just enough time for a small organization to check out Appraisal Smart to see if the solution is right for them.
ReviewSnap - ReviewSnap offers a simple, easy to use tool for online Performance Reviews and 360 Feedback. It supports goal management, self appraisals, a seeded competency library, and more. The solution comes with pre-defined performance review templates, or the customer can create totally custom performance forms. Pricing is published on their site and varies based on the number of employees to be evaluated, for example companies with 51 to 100 employees is $899 annually. The license does allow unlimited reviews for the same cost, and includes both the Performance Appraisal and 360 Feedback functionality. A free 21 -day trial is offered as well, which provides a great opportunity for the small organization of department to try out the product before committing any resources.
HRN Management Group - Performance Pro. The Performance Pro application is an online Performance Management tool that similar to the other vendors in this space support all the expected functionalities like goal management, self assessment, multi-rater feedback, and ongoing performance events or journals. The solution also includes manager's 'Comment Coaching', a tool to assist managers in crafting meaningful and detailed feedback. This functionality is common in the 'higher end' solutions, but not always included in solutions aimed chiefly at the small organization. Pricing is published on the site and as is common in this space, includes a one-time set up fee, and a variable cost based on the number of employees to be reviewed. Example list pricing for 50 employees priced out at $2,075. HRN also offers training in the use of Performance Pro for a nominal fee.
This was just a quick overview of some of the options for the small business for Performance Management. There are probably 50-100 potential solutions on the market, and the right fit for your business based on requirements, budget, size, and internal capability is something only you can determine.
If any of the included vendors has clarifications or comments, please feel free to add them below. And if any vendor who was not included cares to leave some information about your solution, you are encouraged.