Companies around the world, large and small, are carefully reassessing their performance management systems. Intent on improving employee engagement, employee performance and company retention, organisations are seeking to step away from annual appraisals and towards a more holistic, continuous approach. HR executives and managers have been looking for a way to improve their goal-setting systems, improve communication and improve their training processes — this is why continuous performance management has flourished so much in the last few years.
Continuous performance management requires regular catch-ups and real-time communication to be truly effective. Performance management software helps to track performance coaching conversations, assists with career planning and allows for in-the-moment feedback. The growth of the performance management software industry has been strong in recent years, but research has shown that the market is set to explode further in the years to come.
Below, we’ll explore how the performance management software market is likely to grow, the key market drivers and why HR software is showing no signs of slowing down.
- The Performance Management Software Market
- The Emergence of Cloud Computing Services as a Market Driver
- The Key Market Driver for Performance Management Software
- How Companies Are Reassessing and Redesigning Their Performance Management Systems
- Why the Performance Management Software Market Will Continue to Thrive
- Why Clear Review Performance Management Software Has the Edge
Performance management software market — The predictions and current market size
According to a recent report, the global performance management software market was valued at roughly $2.1 billion in 2018. By 2026, the market is expected to generate $5.6 billion. This is a market growth of around 12.8%. As of 2019, North America holds a major revenue share of this global performance management software market due to its early adoption of the software. As a result of technological advances, it’s expected that North America will continue to further drive the regional market.
Europe also holds a substantial market share, although it is the Asia Pacific region that is expected to grow at the highest rate due to an increasing demand for an objective, meaningful and effective performance management. As a result of their flourishing healthcare and manufacturing sectors, China and India are likely to significantly drive the growth of the performance management software in the future.
The emergence of cloud computing services as a market driver
One major reason we believe performance management software has taken off in a serious way is due to the emergence of cloud computing. By providing central administration and control, cloud computing has allowed us to simplify software and make it more accessible across devices. Cloud computing also means an escape from complicated and time-consuming installation — users of cloud-based performance management software don’t need to update and maintain it, as this is managed by the supplier. The cloud model also makes it easier and quicker for organisations to test and roll out new applications, reducing the barriers to purchase.
Key market driver for performance management software — The need for real-time feedback
Over recent years, it has become clear that employees expect real-time feedback. In fact, feedback has been directly tied to workplace satisfaction and company loyalty. One source found 72% of millennials who consistently receive accurate feedback from their managers experience satisfaction in the workplace. Conversely, only 38% of employees who don’t receive feedback feel fulfilled at work.
One important thing to remember is that employees don’t just want feedback — they want feedback that is meaningful and timely. Performance management software provides companies with the capacity for real-time feedback. This opens up lines of communication and encourages deeper relationships between manager and employee.
Companies are reassessing and redesigning their performance management systems
Performance management systems are changing. Organisations are becoming more agile. They are becoming more familiar with current and emerging performance management trends and more sensitive to what their employees want — what motivates them and what engages them. And they are seeing the business benefits as a result of these changes.
Organisational change such as this can take time and serious effort, and it is difficult to achieve when you don’t have the right tools and software to assist and ease the transition. As performance management systems are being adapted to be more modern and forward-thinking, companies are also choosing to invest in, and update, their performance management software.
Why the performance management software market will continue to thrive
This is directly tied to our increased focus on employees, the employee experience and how individuals become engaged at work. As we improve our understanding of employee motivation, morale and enthusiasm, we are tailoring our performance management systems to not only get the most out of our employees but also to keep them happy and productive at work. This requires increased human-to-human interaction, which can’t be substituted — but it can be facilitated and prioritised with the use of software.
Moving forward, we predict that companies will continue to demand cloud-based, intuitive software that prioritises employees and their needs.
Why Advanced Clear Review Performance Management Software has the edge?
At Advanced we have worked hard to produce software that is conducive to high-performance culture. Our focus has always been on productive and developmental communications, agile goals and real-time feedback. It is due to this commitment, and our dedication towards improving the employee experience through streamlined performance management, that we have been honoured with the title of “Vendor of the Year” at the UK Employee Engagement Awards.
At every stage of our journey, we have kept simplicity in mind. We want to make life as easy as possible for our clients and believe the mark of good software is that it requires little to no training to get you started. Our intuitive and user-friendly design is supported by a team of experts with years of experience in HR, which means we understand the world of work and what it means to manage a team. As more and more companies transition away from annual appraisals and the performance management software market continues to thrive, we look forward to collaborating with more teams and continuing to provide our simple yet effective software solution.
Advanced Clear Review’s performance management software has helped more than 180 organisations transition to continuous performance management while improving communication and boosting company transparency. To find out how we can help you, book a performance management demo today.