HRMS performance reviews: advantages & disadvantages

Performance Management and the performance review cycle is a process found within most companies. From an HRMS perspective, is it essential to have it in an HRMS, more of a nice to have, or even something to avoid? In recent years, HRMS vendors have developed more robust and flexible systems able to manage the process inside of HRMS performance review modules. However, many companies still do performance reviews on paper or in Word documents. Is it worth it to manage the performance review process in an HRMS?

Advantages of HRMS performance reviews

• If you have one HR core system to house all of your employees, having your performance review process inside this application enables you to better manage the participants as well as ensuring that data elements such as manager ID or department are kept up to date. In addition, new hires and terminated employees will also not be missing or incorrectly showing on audit reports if your process is within an HRMS as data will be current.

Get more information on performance review features with this guide to 52 features to look for in your next HRMS

• Compliance and reporting is often easier as all of the data elements that you would need for exception reporting, such as ‘Who is in Sales and missing a review’ can be generated from one location.

Disadvantages of HRMS performance reviews

• If you’ve successfully managed the performance review cycle for many years in a certain manner, HRMS performance reviews can be a learning curve, as a new system requires change management, documentation and training efforts, not to mention implementation costs. In addition, there may also be licensing costs for a new module or system.

• If you are a global organization, some countries in Europe with certain works councils or union agreements may require extra efforts on the data privacy front.

Tips to make It work

• Consistency and standardization is critical. If you have certain populations who use the system but others who do not, or others who use only pieces of the system, it starts to become difficult to manage and report on completion. If the HRMS performance review process and population are standardized, however, the system is better able to support compliance aspects.

Performance Review functionality is similar to any other HRMS functionality; you need to understand your business requirements to ensure that a business case exists to put this data into your HRMS.