Businesses and organizations in Dubai and all around the UAE are continuously seeking ways to improve productivity, efficiency and quality of their work. For that businesses adopt new technological solutions, they implement different software business management tools, they adopt to modern business practices and processes and much more. The carving to grow compel businesses to compete in the market and require them to improve day by day. Most of the businesses invest heavily in IT infrastructure, manufacturing technologies, and their materialistic resources, they also hire highly paid employees with exceptional track record but even then they might not achieve their goals, that is only because the loopholes of the traditional performance management practices. There is no doubt that the performance management is absolutely essential for a modern business, but the problem is that most of the businesses and organizations never realize their performance management practices are outdated and keeping them from achieving what they truly capable of. A modern performance management is a software based solution which help businesses and organizations to unlock the true potential of their employees and achieve their goals and objectives.
In the modern fast-paced marketplace it is extremely important and difficult too to retain a highly talented and skilled workforce. Talent hunt alone is a very expensive and time consuming task for the HR. But the HR’s responsibilities not just end there. It is the HR department who is responsible to retain valuable employees and keep them motivated to perform well and add value to the organization’s outcome. The employees doesn’t only need high salaries and other perks, in order to perform at their full potential the employees need, leadership, mentorship, guidance, encouragement, motivation, satisfaction at work, trust at the business and management, development and training programs, respect and recognition, and a highly productive organizational culture which nourish them, groom them and grow them. A highly motivated workforce with less experience and technical competencies can perform well than a poorly motivated and dull workforce with most experience and highest qualifications. That is where the real difference is made and that is why the performance management system is so crucial. Usually the HR department is responsible for acquiring a new performance management system which could be very confusing task given that there are hundreds of different solution available in the market. In this blog we will discuss what you should be looking for when buying a performance management system.
Performance Management System Buyer’s Guide: Do you need a Commercial Off-the-Shelf Solution (COTS) or a Customized Software?
There are two major categories of software development, one is COTS or commercial off-the-shelf software development and the other is bespoke or customized software development. The COTS are the software that are developed by a vendor for a mass audience and any business can acquire then and start using them right away. However, the customized software development means a software or app development which is designed according to the very specific needs of a business and exclusively developed for a particular business or a user group within that business. Moreover the COTS or commercial off-the-shelf software are owned by the vendor and the businesses who use them doesn’t own the application. The customized software are designed exclusively for a particular client/business hence the ownership also belongs to the user/business. The vendor or software development agency deliver the application to the client/business along with all source code and ownership to the final product. These are some of the major difference between the COTS and bespoke software. Furthermore there is another most important factor which is the cost. The initial cost of the COTS is fairly less, however, businesses might end up paying more for renewals, upgrades, customization, up scaling, etc. The initial cost of the customized software is slightly high but overall the ROI is excellent.
Why Custom Software Development is a Good Choice for Performance Management System?
There are many reasons to choose custom software development for your performance management system. The COTS are expensive, have comparatively lower ROI, the future readiness and up scaling is expensive, the customization is very limited and very expensive. Most of the time businesses end up purchasing a package which have a lot of features that they might never use, the UIs are very rigid, the work flow and the processes are designed for masses hence mostly misalign with your internal processes and work flows. A business might have to make huge changes in their internal processes, work flows and practices in order to fully adopt a COTS performance management system. On top of that you don’t own the software, and you are also bound to a single vendor which have a lot of drawbacks. It is also very difficult to respond to the market changes and adopt to new methods while using a commercial off-the-shelf performance management system. On the contrary the customized performance management system doesn’t have any of such problem. The initial cost is relatively higher, and the businesses also have to spend time and efforts in research and discovery phases, however, the final outcome of custom software development is a perfect match to your exclusive needs. It perfectly align with your internal work flows and processes, it is easy to integrate in organization’s culture and infrastructure, and on top of that it doesn’t require you to make changes to your existing processes and practices, which results in better efficiency, productivity and more user satisfaction.
Performance Management System Buyer’s Guide: How to Choose the Right Custom Software Development Agency in Dubai, UAE?
When it comes to COTS software service provider, the best formula to choose a right software development agency is to check how much of your needs it can fulfill, usually the corporate sector follows a 20/80 rule. It means that if any software can meet your 80% of the needs and can’t offer solution for your 20% of needs, than that is best option. However, usually businesses and organizations also settle down with COTS who can meets their 70% or more of the needs. However, the custom software development is different, as the software is exclusively designed for the business, so it mostly meets the 100% of the needs and businesses doesn’t have to compromise. When it comes to performance management system software the HR department usually tries to get their all needs and requirements met, which is why the custom software development is the best solution. However, here in Dubai and all around the UAE there are hundreds of custom software development agencies. Which makes it very difficult for the HR to decide which bespoke software development agency they should chose. Here is how to choose a right custom software development agency in Dubai, UAE:
- Step 1:Start making a list of custom software development agencies in Dubai, UAE. Ask friends, colleagues, search online, take recommendation from industry experts, choose from the companies you have experience in past and short list at least 10 companies.
- Step 2: Share your objectives and basic needs with all and compare their responses, proposals, offers, suggestions and then make a list of at least 5 best among them.
- Step 3: Compare each company on the bases of their work experience in the relevant field, their clients, and the client feedback/testimonials, etc. It is important to explore their portfolio and then further reduce your list to 3 companies.
- Step 4: Sign NDAs (non-disclosure agreements) share your complete details, held meetings and discussions, provide them the information they might be needing to prepare the technical scope of the project.
- Step 5: Ask them to provide you with detailed commercial and technical proposals. Negotiate the price and the scope of the work and finalize the best option. Sign-off the project and immediately start the work.
These steps will help you finding a best custom software development agency in Dubai, UAE. It is extremely important to choose a right partner for the custom software development project. Because most of the time if businesses failed to properly scrutinize the vendors, they end up prolonging the development time which may results in disputes and it could also raise your cost.
Performance Management System Buyer’s Guide: Features of a Good Performance Management System
One of the biggest advantage of a customized or bespoke performance management system is that it is capable of fulfilling 100% of the needs and requirement of the business. The process of the custom software development begins with the discovery phase and requirement gathering phases, in which the business/users have full contribution and they can ask for whatever feature they need, they can control the entire work flow, process and everything as per their own convenience. The UI (user interface) plays an important role in any software application, with the custom software development the businesses can design highly effective user-friendly UIs to maximize the usability and efficacy of the system. This is what makes custom performance management system more efficient, user-friendly and impactful. Regardless of your choice whether you go with COTS (commercial off-the-shelf) software or custom software development, here are some key features that you should consider while choosing a performance management system:
Feature for Setting Effective Goals and Objectives
For any performance management system the goals and objectives are one of the most important part. The business goals and strategic objectives are inspired by the vision and mission of the business. The vision and mission is a very long term objective, however the goals are usually for one year or a few years at most. In the traditional performance management framework usually the business goals are for one year. Even in modern and digital performance management systems the business goals are set for one year, and that is also called performance cycle, but the difference is that the business can set more short term goals which are aligned with the annual goal or long term goals. A good performance management system offers several features to set up goals and it also provide analytical data and historical overview which help the management set up more realistic goals and objectives. The performance management system provides SMART framework which is considered to be the most successful framework. The SMART stands for Specific, Measureable, Attainable/Achievable, Realistic/Relevant, and Time-bound. Furthermore a good performance management system allow the management to set dynamic goals and objectives, which means that the employee goals and objectives can be changed to further allow them to grow, improve and achieve higher success.
Features to Digitalize and Automate the Performance Management Process
The technology is making our lives simple and more efficient. The performance management system software is one of the most modern and advanced tool any business can utilize to support their growth and progress. The digital performance management system help businesses digitalize and automate the performance management process. The manual performance management was a very time and effort consuming process that is why it was expensive too. The traditional performance management cycle is annual, it is done once a year or in some cases businesses do it twice a year. The performance management system software help businesses minimize the effort and time required to conduct performance evaluation which enable businesses to adopt to modern and more effective performance management practices such as agile and continuous performance management methods. Furthermore the digital performance management system also help businesses to improve the quality of the performance management process by providing fully automatically, semi-automatically and manually collected performance data. The highly accurate in-depth performance analysis help businesses improve the process and its outcome and bring transparency and efficiency to the process.
Features to Increase Employee Engagement and Satisfaction
In order to inspire performance the employee engagement plays an important role. Without engaging employees in the processes it is hard to motivate them. The performance management system should offer features that help facilitate communication process and increase employee engagement. The communication is a key to improve performance and productivity. The performance management system help managers effectively communicate the high-level organizational goals and objectives and long term business vision this is what induce a sense of destiny and motivate employee to accomplish more. Most of the time there is a gap between the individual goals and the high-level company goals. Managers often communicate individual goals to the employee, but they failed to show them the bigger picture. The performance management system help bridging this gap. It enables managers to communicate the organizational goals and objectives and also the individual goals and objectives and help employee to understand the relation between their efforts the business success, which can greatly motivate employees to perform well. It also help managers to include employees in goal setting and decision making process and the performance management system provide employees with features to provide their feedback and share their opinion which increase their engagement and boost their morale.
Features to Enhance the Communication
The digital performance management system offer effective features to enhance communication and eliminate the common problems caused by the communication gap between the managers and the employees. The communication plays an important role in building the relationship between the employees and the managers which is vital for various performance management objectives such as mentorship, guidance, motivation and also help managers enhance their leadership skills and make their role more effective. The performance management system make sure that the manager and their sub-ordinate communicate more often and maintain an optimum communication frequency. Furthermore the digital performance management system also provides a comprehensive framework for the one-to-one meeting, reviews and feedbacks. It also allow the employees to share their opinion and feedback. This help building trust among managers and employees which make employee more comfortable and open to their management. The strong communication help managers understand the concerns and problems of the employees which are keeping them from performing well. Furthermore the communication also help employees to understand the importance of their role and achievement it help them understand the organization’s expectations from them. The communication also increase employee engagement and give them confidence to share their innovative ideas. Basically the communication is the backbone of performance management system and it helps greatly to boost the performance.
Features to Improve Feedback and Review Processes
The employee performance management and appraisal systems are nothing without feedback and reviews. The feedback and reviews are the soul of the process. A digital performance management system not only provide features to improve the processes but it also bring transparency and fairness to the system which is a much needed feature in the modern performance management. When we think of the feedback the 360O degree feedback is the first thing that came into the mind. That is because it is the most popular and widely used method in Dubai and all around the UAE. Traditionally the feedback and reviews were taken only from the managers for the performance of the employees, however, this method have many drawbacks, it lacks transparency and eventually both the managers and the employees lost trust on it. However, the 360 Degree feedback and review method includes the feedback and reviews from the managers, peers/colleagues, supervisors, subordinates, relevant stakeholders across the organization, even customers and suppliers too. Which make the process more transparent and make the conclusion more accurate and fair for the employees. Furthermore the performance management system treats feedbacks as a cyclical process and introduce continuous feedback in the system. This helps solving many problems and hurdle which are hindering employee’s performance. The performance management system can automatically track previous communications, and it can set a mechanism to remind both employees and managers to have a feedback session or discussion and it can also support online feedback methods. The reviews help managers and employees to assess their competencies and help manager set more realistic goals and increase the success rate which give employee confidence and encourage them to perform well in future.
Features to Set Clear and Accurate Metrics to Measure Success
For any performance management system it is crucial to have a clear and easy-to-understand performance metrics. The employee should know what success will look like, what they should do to be successful and how their success will be measured, this will help them understand what is expected from them by the organization. Most of the time the employees don’t have a clear understanding of the success metrics which tend to hinder performance. There are four major types of performance metrics:
Qualitative Metrics
The qualitative metrics are subjective in nature, they tend to measure the progress or success in objectives furthermore the feedback by managers, peers, and other stakeholders are also important factor in qualitative metrics. It is always difficult to measure the quality of the work, however, the performance management system provide qualitative metricswhich are usually weight, value, percentage or point scores which make objectives more tangible.
Quantitative Metrics
The quantitative metricsare easy to understand and measure, there are tons of way to measure the quantity of work produced by the employee. The quantitative metricscan be measures by collecting the right data and applying simple formulas to it to measure the accurate contribution of the employee. The quantity of work is important for both the employees and the managers. The number of sales or percentage of revenue or the number of produced items, etc. are the common quantitative metrics.
Efficiency Metrics
The efficiency metricsinclude both quality and quantity aspects of the work produced by an employee. The quantity of the work alone or the quality of the work alone can’t fully justify the efficiency of the employee. The performance management system provides efficiency metricswhich combined both and measure the efficiency and efficacy of the employee such as at a service center how many customers are serviced, how many left satisfied and how much time is consumed to perform those tasks, etc. will provide a clear and highly accurate measurement of the efficiency of the employee.
The digital performance management system further help the management by digitalizing and automating the data collection processes. It also links different data feeds in a single dashboard and it can automatically perform analysis and formulas to find conclusions and to prepare reports.
Feature to Track and Monitor Organization’s Performance Metrics
Another great advantage of the performance management system is that it not only accurately monitor and measure the employee performance but it is very capable of monitoring organization’s performance. It offers a variety of metricsthat measure the performance of the large groups, departments, teams, and even the entire organization. That is a very useful feature which help higher management understand how improvements or decline in the employee performance is impacting the overall organization’s performance. Furthermore it also help management understand the contribution of each team, department, or employee group. Here are some important organizational performance metrics:
- 9-Box Grid: This metric is used to understand or assess employee’s potential or capabilities along with their current performance and that is a great tool to identify and promote high-value employees and identify future leaders.
- MBO: The MBO or management by objectives is basically a goal setting tool it helps setting up goals and objectives for the individual employees based on the high-level organizational goals and objectives and a great metric to understand the individual and collective progress towards high-level organizational goals.
- NPS: The NPS or net promoter score is one of the most used metric, it tells how likely a customer is going to recommend your business/organization to others. It is also used to assess the performance of the sales and service staff.
- 360 Degree Feedback: The 360 degree feedback includes the feedback and reviews from the managers, supervisors, peers, clients, suppliers, relevant stakeholders, and even from the sub-ordinates to track and measure the performance.
- 180 Degree Feedback: The 180 Degree feedback is slightly different from the 360 degree feedback, although the method is same but the feedback is collected from only the managers and the peers/colleagues.
- 720 Degree Feedback: The 720 Degree feedback is same as 360 degree feedback, the only difference if it is conducted twice, after conducting first 360 degree performance the individual development programs and designed and implemented and another round is conducted after that to understand the impact of the individual development programs.
- Errors Count:The error count is sort of self-explanatory, it is used to count the number of errors the employee or teams make, it could be as simple as a syntax or grammatical error in official correspondence or it could be an error in the source code or production machine’s inputs, etc.
- Absence Rate: The absence rate or absenteeism is the measurement of the absence of an employee, the high-performing employees have less absence and even if they are absent they would have a valid reason. This is a very useful metric to identify high-performers.
These all metrics and several others like that will help management to understand the overall progress of the entire organization as well as individual business function, project teams, different employee groups up to the individual employee and help management understand the impact of their performance on the overall performance of the organization.
Performance Management System Buyer’s Guide: System Integration
The system integration is a very important aspect to consider while acquiring a performance management system. Regardless of what solution do you choose, the COTS (commercial off-the-shelf solution) or the custom software development, the system integration is a must to have feature for a performance management system. The system integration is a technical way of allowing two software or databases to talk to each other. It means one system can push or pull data from another system. Usually the system integration depends on the technology that is being used to develop the software. In case of performance management system as it heavily depends on data integration in order to offer more modern features, both the commercial off-the-shelf solutions (COTS) and the customized performance management systems offer an adequate support for system integration. However, the system integration of a customized performance management system is much superior then the COTS. Another great advantage of integrating performance management system with other business tools, enterprise solutions and central information system is to leverage the digitalization and automation. The digitalization and automation has many perks and it can significantly improve the performance management process and its outcome. Another great advantage of having a customized performance management system is that its integration is relatively easy and is much more cost-effective than the COTS systems.
Performance Management System Buyer’s Guide: Maintenance and Scalability
Maintenance and scalability is one of the must have feature of not only performance management system but any other modern software solution. Both commercial off-the-shelf solutions (COTS) and the custom software development offer maintenance and scalability to some extent however, the customized performance management systems are superior here too. The COTS require less maintenance but the updates and security patches are responsibility of the service provider, which usually happened to be slower than expected. However, with the custom performance management system the business itself or the maintenance contractor can take care of it. Furthermore the customized performance management systems can be hosted in cloud and also in local or in-premises data centers which provide businesses or the maintenance team more control over the software and the environment. With the COTS since there could hundreds if not thousands of businesses using the same product all around the world, the upgrades, changes and updates are slower and less frequent. But with the customized performance management system the business can keep them up-to-date fairly easily, they can make changes to the system anytime they want, they can update or upgrade it anytime without any restriction. For COTS the up scaling is relatively expensive but with custom performance management systems it is absolutely free.
Performance Management System Buyer’s Guide: Data Protection and Privacy
Obviously the performance management systems have the most important and confidential data about the business, which is why they data privacy and data protection should be one of the top priority while choosing a performance management system. Any breach to that data could be catastrophic. We have witnessed in past few years that giant multi-national businesses and organizations have suffered billions upon billions of losses after data breaches. For a medium sized or even a small business such misshape could be more devastating. The first thing that happens after such incident is that the customers immediately lose faith in your business. They will question everything about your brand your values, your practices and even your capabilities. This could harm the reputation of a business to an extent where it could take years to recover from such an event. That is why the data protection and privacy should be the top priority when implementing a performance management system. The COTS or commercial off-the-shelf solutions are used by hundreds of businesses worldwide, this means that their infrastructure and source code could be exposed to thousands of users all around the world which is what makes them more vulnerable. However, the customized performance management systems are exclusively designed and developed for a business, and the business also have all ownership rights to it, so there would be no other business who would be using the same system. Hence the software architecture and source code remains hidden form anyone outside of the organization which makes it more secure. Furthermore all of the data is stored on the servers which are fully controlled by the business or its outsourcing partner, hence the data breaches are very rare in such systems.
Performance Management System Buyer’s Guide: Cost and Long-Term ROI
Apart from all technicalities the cost is one of the major factor that can significantly influence the decisions of a business. Usually only a few of the decision makers have enough technical knowledge to make in-depth technical comparisons, most of the decision makes focus more on timelines and cost of the system and also its operational/running cost. The COTS performance management systems have relatively less initial cost, but the system expansion, scalability, upgrades, updates, customization, integration and other such needs can significantly increase the cost of the system and reduce its long term ROI (return over investment) value. Which is why most of the businesses in Dubai and all around the UAE are diverting their attentions from the COTS and are rapidly adopting to the customized software solutions. A customized performance management system might have higher initial cost which includes the system design and development and implementation expenses, but in terms of operational/running or long term ROI the customized software solutions are much superior then the COTS. As thecustomized software solutions are exclusively developed for a business and the ownership belongs to the end-use there is no additional subscription or rental cost. The system is owned by the business, so they can also chose any vendor or outsourcing partner for maintenance and future customization/upgrades. They are not bound to a single vendor hence they can get very competitive services. Furthermore there is no restriction on the scalability and growth which also makes its ROI much better in long term.
Conclusion
A performance management system is one of the most important part of modern business environment. In the present day the markets are very competitive, the customer demands are rising day by day, the disruptions and abrupt changes in the market trends are becoming more common which demand a business to perform at its highest efficiency possible. It is not that the performance management and appraisal is a new phenomenon, however, the ways businesses were managing their performance to optimize their efficiency and productivity in past have drastically changed. Here in Dubai and all around the UAE the markets are growing steadily, the governments are very business-friendly and more and more investors are joining in, which requires businesses to maintain a strong competitive edge in order to stay relevant and keep growing. The employees are the most critical resource and a crucial asset for any business. The HR department puts tremendous efforts to hire highly talented and skilled workforce, however, the common problems that any HR department faces are lack of motivation among the employees, poor or average performance, and higher turnover. That is why the businesses implement a performance management system which help them boost employee performance, engagement and morale, it help them groom their employees, find future leaders, improve the skills and capabilities of their workforce, highlight the strengths and weaknesses of their employees and guide actions to improve that.
In this blog we have discussed some of the most important aspect any business should consider while choosing a right performance management system. This blog was intended to provide our audience a basic understanding of how different features of the performance management system works and what they should be looking for while comparing different performance management system available in the market. RSI Concepts is a leading custom software development agency in Dubai, UAE. We have a highly experienced and skilled team of experts, analysts and software developers. If you want to learn more about the subject or if you want us to help you with developing a highly cost-effective and impactful performance management system for your business, please feel free to contact us through our Contact Us page or leave a comment in the comment box below and we will get in touch with you soon.
Check out this: How Performance Management Impact on Organization’s Culture?