Performance management software is used to evaluate employees’ performance to improve productivity at your organization. It can help you determine which employees are top performers, and which employees may need some extra help. This information can help HR managers learn the best plan of action for running an efficient and productive team. Cloud performance management will allow you to access these tools anywhere you have an internet connection.
Cloud software is the delivery of software services through the internet or the cloud. It’s often seen as a more flexible alternative to an on-premise software solution. It’s designed to be user-friendly, is typically a smaller investment upfront and easier to implement. An on-premise software solution is installed on your company’s computers and servers.
A cloud solution is especially useful in an HR space because it allows employees to respond quickly to situations. Responsiveness and the ability to quickly adapt to changing business conditions are among the most critical responsibilities of HR professionals.
- Cloud performance management is valuable for HR professionals.
- The cloud is becoming increasingly popular in the performance management space.
- Cloud software includes a smaller upfront financial investment and is easier to implement.
- The top IT challenge for 2020 will be upgrading and maintaining software.
What Can Cloud Performance Management Software Accomplish?
As we stated above, performance management software is used to track employee performance to boost your company’s productivity. Every software program has unique strengths, but these are some of the main features of cloud performance management systems.
Performance Evaluation System
A performance evaluation system tracks employee performance and automates employee reviews. Employee reviews take into account anything from timeliness to work efficiency. Peer assessments, self-evaluations and 360-degree feedback might also be included in a solution.
A related feature that is popular among cloud performance management systems is ongoing feedback capabilities. Constant coaching is easy to facilitate with a cloud system, as you can send feedback to anyone on your staff, anywhere and anytime. Ongoing feedback has become a prevalent performance management method and is often used in conjunction with annual or periodic reviews.
With goal management you can set clear goals for employees and track their progress. Managers and employees can set goals together, aligning individual goals with those of the company or larger group. Setting goals together is a great way to ensure every employee is working toward your company’s mission.
With a cloud system, you can check in on your employees’ progress anytime and anywhere. Another potential benefit of a cloud system is that employees could set automated due date reminders to come to the device of their choice.
This function of performance management software identifies your highest performers and rewards them accordingly. Compensation management avoids unconscious biases and uses data to decide which employees are due for a raise or bonus.
Some cloud performance management vendors offer features such as pay-for-performance. For example, if an employee goes above and beyond, you can use your smartphone to reward them in real-time. Note that pay-for-performance isn’t always the best HR practice, and may work better in specific settings or departments such as sales.
Employee Lifecycle Management
Employee lifecycle management assists with all of the phases of employment. These stages might entail recruiting, onboarding, development, retention and exit.
Cloud recruiting features can include capabilities such as a mobile career site for applicants to explore open positions and apply for them. An example of a cloud onboarding feature is eSignature functionality, or the ability for new hires to use their smartphones to sign their paperwork.
Reporting and Analytics
The analytics dashboard provides visual reports of key performance management metrics, such as company goal progress or company performance trends. The reporting function can give instant performance-related feedback, which allows you to make data-driven decisions in real time.
Additionally, cloud accessibility allows you to analyze company-wide data and make informed decisions, even when you are traveling or working remotely.
Cloud vs. On-Premise Performance Management Software
Cloud software carries many advantages, but there are a couple of capabilities exclusive to on-premise software. Read on for a detailed comparison of these two different deployment options.
Cloud software is accessible and scalable for the end user. On-premise software requires a deeper commitment and a clear idea of what your business will need from a software solution.
You can access a cloud platform from virtually any device that has an internet connection. This allows employees to take their work to any location and stay in the loop when schedules become unpredictable. On-premise software is downloaded onto your company’s servers versus a hosted server, or an off-site server. This means that you will need access to your server to use your on-premise solution, and oftentimes, that entails using the computers within your office.
Cloud software can change as your business does. This is great for companies with varying bandwidth needs, because you aren’t required to predict the number of users and transactions you will have in the future as your business grows.
The initial cost of a cloud solution is often lower than the price of an on-premise solution. That’s because for an on-premise solution, you are buying the software outright and downloading it onto your computer’s server. When you adopt a cloud solution, you pay a monthly subscription fee. On top of ownership fees, there are also maintenance costs to consider.
Cloud solutions are continuously updated, but depending on what vendor you go with, you may have to pay to have these updates implemented. If you have an on-premise solution, you are taking ownership of the software and will have to keep up on maintenance using your own means. According to Spiceworks, keeping IT infrastructure up-to-date and upgrading outdated software will be some of the top IT challenges in 2020. This was a top challenge in 2019, as well. Another thing to consider is that your energy bill will be higher if you’re using an on-premise solution.
Here are some examples of ongoing costs involved in on-premise software:
- Maintenance of hardware
- Maintenance of security
- Maintenance of databases
- Use of the IT team’s time
- Upgrades and downtime
The security of cloud versus on-premise software is an argument that has lingered in the tech industry for years. In reality, one implementation method doesn’t clearly trump the other, and the decision of which implementation strategy to utilize often comes down to a matter of personal preference. No matter the implementation method you go with, making sure your solution is impervious to data security breaches is incredibly important, as a breach can result in great loss of revenue, reputation and more. Providing security training will be another top IT challenge in 2020, according to Spiceworks.
Cloud solutions come with high-security measures that would be a lot of work to employ in an on-premise solution. This is because cloud software is designed with security in mind; software developers are well aware of potential security breaches in the cloud.
However, organizations that handle sensitive information such as a government agency might not be comfortable with a third-party handling their data. If you opt for an on-premise solution and store data on your computer’s servers, you’ll want to make sure your office has physical security measures to help prevent break-ins.
Some examples of sensitive data that your cloud performance management system would contain are:
- Performance reviews
- Pay levels
- Background checks
- Social security numbers
- Addresses and other contact information
In short, your sensitive data is very safe in the cloud, but you have to relinquish some control. A private cloud solution would be a compromise for a company not willing to give up complete authority over their data. We’ll go over private cloud and other deployment methods later on in this article.
Implementation is the process of getting your software program up and running. A cloud software implementation is quicker than an on-premise deployment. At its most basic level cloud software requires you to purchase your subscription, log-in and train your staff. On-premise implementation includes several steps:
- Make a plan including budget (with room for unexpected costs), timeline and potential implementation team members
- Bring in an IT team or use your own IT team to install the software
- While the IT team is working on installing the program, involve end-users to ensure the system works as needed
- Conduct training and officially launch the program
Customization to the point of altering code within a system is more widely done with on-premise software. If you’re looking for a solution that can be deployed via the cloud but still retains robust customization capabilities, you may want to consider a vendor that offers open source cloud.
On the other hand, cloud performance management software typically offers configuration options — note that configuration is different from customization. Configuration allows you to personalize your features, and this is often enough scalability for most companies, especially in the HR and performance management space. Configuration can enable you to do things like change the look of different screens or run custom reports.
According to a Spiceworks 2020 trends study, cloud budget allocations for online productivity tools will increase from 10% in 2019 to 14% in 2020, while budgets for on-premise productivity software will remain the same. This indicates that more and more companies are opting for a cloud deployment strategy.
If you read the on-premise versus cloud comparison and feel like you can’t choose one or the other, you might consider a hybrid cloud deployment. Hybrid cloud is a combination of on-premise software, private cloud and third-party public cloud services. Hybrid cloud adoption is at 58%, so a little more than half of software buyers are going for this middle-of-the-road strategy.
This deployment method provides the most substantial amount of flexibility and is ideal for companies that may have fluctuating needs. It’s an excellent option for companies not willing to give up control over their data by handing it over to a third-party, public cloud service. Organizations that might be partial to a hybrid deployment method include government groups or financial conglomerates.
What to Look for in Cloud Performance Management Solutions
You’ll have to gather your company’s requirements to decide what you need in a cloud performance management system, but here are some basic functions you might consider when evaluating vendors.
Centralization is critical for efficiency. Having a disjointed software system can result in data islands, and defeats the overall purpose of improving productivity and saving time. Therefore, you’ll need to make sure that your program can integrate with other features, such as payroll and recruiting.
Even if you are looking for a standalone performance management system, you may find yourself wanting to add other modules in the future. One of the most significant benefits of using cloud software is the ability to pick and choose which modules you would like and to purchase add-ons post-deployment. You’ll want to make sure you set yourself up with a system where this possible.
For a software system to work optimally for your organization’s unique needs, you might need to enlist configurations to adhere to your specific requirements. Some things configuration would allow you to do are:
- Design training plans
- Tailor reports
- Customize workflows
- Set alerts or automated notifications
- Control user access
- Create performance review templates
Training and Support
Although the cloud implementation process is notoriously simple, training is still valuable. It is the best way to thoroughly understand all of the capabilities of your new software system and get any questions answered.
Additionally, customer support is a must-have for any software user. Make sure that vendors have a way for you to reach them in the event of technical issues. The reviews section on products is typically a good place to find out how well a vendor does customer support.
Technology and software usage isn’t just for IT teams; HR professionals are expected to use these tools as well. Cloud software is a great option for those making this transition because it is very user-friendly. If you haven’t already, get ready to make the transition — these innovations aren’t going anywhere. Ninety percent of companies utilize the cloud.
According to Sierra-Cider’s 2019 HR Systems Survey, on average, organizations currently have six Mobile-enabled applications, with plans to increase to seven within the next year. They also reported that performance management is among the areas that will experience an uptick in mobile-enabled applications.
All comparisons aside, there is no definitive superior option between cloud and on-premise software. The best software option for you is dependent on your company’s unique needs. You need to gather your requirements before you can decide what sort of platform will work best.
What we can say for sure is that cloud performance management typically requires a smaller upfront investment, is easier and quicker to implement, and provides more flexibility. The cloud is becoming an increasingly popular deployment strategy among software buyers, including those in the performance management space. On-premise software brings about some of the IT difficulties we are experiencing today and will continue to experience into 2020.
So, what do you think — is a cloud or on-premise performance management deployment more desirable for your business? Let us know in the comments below!