Performance management software is the key to an organization’s success. While a growing number of organizations are updating the way they measure performance and growth, more than 48% still use archaic spreadsheets for documentation and tracking. Performance management frameworks help organizations manage performance effectively by analyzing multiple performance metrics simultaneously and highlighting different paths for improvement.

These are 5 of the most common performance management frameworks, along with industries and companies that have benefited from implementation.

1. OKR (Objectives and Key Results)

Objectives and Key Results (OKRs) are a performance management framework through which an organization identifies and determines objectives and KRAs. Objectives, as the name suggests, are the goals that an organization wants the employee to achieve; KRAs are tasks that lead to the achievement of these goals. To help you understand better. Goals are met on time so they can be measured and analyzed in the next feedback loop. It is important to note that because OKRs can be ambitious, it is not always possible to achieve them. OKR is a performance management concept that originated at Intel and was later adopted by other global companies such as Google, Uber, Spotify, Twitter, Airbnb, LinkedIn, and Wells Fargo. took it to the next level by making the appropriate adjustments to the system to make all its functions more efficient and its workforce more skilled. Now let’s look at the pros and cons of this theory of performance management.

2. MBO (Management by Objectives)

The MBO performance management framework attempts to implement transparency and uniformity of goals and ideals across the organization. The HR team collaborates with business leaders to define and communicate goals and desired outcomes to employees. When implementing the framework, it is imperative that each team member has a deep understanding of their responsibilities and goals. The MBO is a framework developed by Peter Drucker, management consultant, educator and author. It has 4 critical components: First Goals that are challenging but achievable, second Continuous Feedback, third rewards for achieving goals and following best practices, and lastly, constant focus on personal growth and development. Unlike the OKR performance management framework, where it is important to show improvements in each KRA even if the target is not met; The MBO requires that all objectives be completed within the given time frame. Once the goals and objectives are defined and mapped by management, they are forwarded to the respective teams as employee goals. When managers and their teams are aligned on goals, it acts as a tailwind to achieve organizational goals. Even though MBO seems like a foolproof performance management framework that will bring great results for all teams.

3. Review-driven Performance Analytics

Performance analysis based on reviews not only helps manage performance, but it also empowers employees to improve. With people analytics and employee performance metrics, every goal and action can be quantified and measured. The goal behind review-based analytics is to understand historical data, predict new performance trends, and take informed action to shape talent to produce high performance. Collecting people’s opinions gives managers and HR teams a window into employees’ strengths and weaknesses, helping them channel their energies into projects and assignments that will help them excel as a team. The best part of the HR analytics-based performance framework is that it not only helps you record performance-related reviews, but also measures human aspects like engagement and interest. In review-based performance management, these are the components that drive effectiveness, continuous feedback loops, skill measures and cultural parameters, growth and development scale, l review and feedback controlled by HR. Review-based performance management relies on descriptive analytics to not only provide insight into what is happening in an organization, but also what might be happening. This is possible when organizations integrate performance management with HR technology to generate predictive analytics. Predictive analytics, powered by machine learning, will help drive unprecedented workforce growth, retention and engagement. Review-based performance can be adapted to a data-driven approach that works well with OKR and MBO frameworks.

4. Balanced Scorecard

A dashboard is a document that provides a comprehensive classification of something into various categories based on various parameters. A balanced scorecard is achieved when an employee performs well throughout the year and even exceeds targets. According to a recent study, the Balanced Scorecard connects four aspects of performance measures. Whether an employee’s performance meets customer expectations, Whether an employee’s performance aligns with company goals, Whether an employee’s performance is constantly improving and adding value to the company, whether an employee’s performance is endorsed by stakeholders and investors. Therefore, the Balanced Scorecard combines indirect performance measures into a single management report. This performance management theory not only helps business leaders see how and where improvement is happening, it also helps them see if employee improvement in one area has caused them to compromise their efforts in another. Customer-focused companies, in particular, benefit from the Balanced Scorecard framework. Ford Motor Company and Volkswagen are just a few of the brands that have brought out the best in their teams using this structure.

5. 360-degree Feedbacks

As the name suggests, this framework involves collecting and working with collected feedback from a 360 degree perspective; that is, everyone with whom an employee works. 360 degree feedback is a highly effective performance appraisal and management framework that acts as a tool for enhancing employee development. It gives co-workers and supervisors the ability to provide anonymous feedback about their colleagues and provide additional tips that can help them grow. This gives employees a rich view of how their efforts are perceived by the people they work with and gives them the ability to calibrate their skills and behaviors. 360 degree feedback also gives employees the opportunity to receive customer and/or customer reviews, which helps in their professional development. The key to 360 feedback is ensuring your frequency. Continuous feedback is important because organizations that engage their employees in continuous performance processes are 45% more likely to retain employees. 360-degree feedback engages everyone from customers to co-workers, supervisors and stakeholders, improving work culture Employee behavior, Employee skills and abilities, Performance improvement plans, Leadership effectiveness. 360 degree feedback involves a lot of form filling, which can be easily automated, acquired and documented using human resource management software.