What Is Performance Management Software? A Comprehensive Guide

Explore the world of performance management software and understand how these tools work, their benefits, and how to select the right software.
What Is Performance Management Software? A Comprehensive Guide
Explore the world of performance management software and understand how these tools work, their benefits, and how to select the right software.

When people ask if ClearPoint does performance management, I usually answer, “Yes, of course,” and then ask another question in return: Are you referring to organizational performance management or personal performance management? These are distinctly different, but related concepts—individual performance naturally feeds into organizational performance. Usually, organizations in search of performance management software are looking for separate solutions to address one or the other, but in our view, that’s a mistake. The best performance management software handles both.

In this article, we’ll explain how software can dramatically simplify both organizational performance management and individual performance management—and give you a more complete picture of your company’s effectiveness.

Stay the course with organizational performance management software.

Organizational performance management is the art of defining, measuring, and ultimately achieving your strategy. Plenty of organizations fail to achieve their strategies for a multitude of reasons. Not all strategy failures can be averted, but some organizations never reach their goals simply because they don’t use the right tools to manage the process. Performance management is a complex art; software can help at every stage of the game, to keep your strategy at the forefront and remain top-of-mind.

From beginning to end, here are my recommendations for how performance management software helps you stay on course:

Devise A Dynamic Strategy

Your strategy defines your organization’s main purpose; it is accompanied by a set of key objectives that describe high-level goals. Creating a strategy is one thing, but you should never consider it set in stone. If circumstances—either internal or external—change, your strategy may also need to change to stay relevant. For example, organizations that had a strategy going into 2020 would have started revising it before the end of Q1 thanks to COVID-19. One I know of had a 25% growth target in place and was making a lot of investments to reach it. By the end of March, they had changed the target to maintain the same level of revenue as in 2019, and had cut all spending on new projects.

Using software allows you to be flexible with your strategy—much more than you could with a poster on a wall or a binder on a shelf. The best performance management software uploads new data automatically, so it’s always up to date. And rather than searching through text documents (which are likely outdated), software lets you easily drill down into any part of the strategy to get more detailed information, so you always know how and why things are going the way they are. And if you need to make a change on the fly, you can. The increased flexibility software provides makes you more likely to know when it’s time to adapt—and to make the necessary changes.

Net profit dashboard

Measure Your Progress

Measures show whether you’re meeting your strategic goals. Just as strategic goals sometimes change, measures do, too. Measure data needs to be updated continuously so you can see if you are making progress with your strategy. This is a challenge for many organizations, because data typically lives in a number of different systems. (One client I spoke with yesterday named nine different systems where strategic data is housed—and that was off-the-cuff and not including spreadsheets.) In addition to gathering data from various systems, you also need to roll up data from multiple departments. Depending on the number of systems and departments involved, data gathering can be time consuming, complex, and hard to manage.

A powerful performance management software system makes data gathering automatic. It allows you to import data from multiple sources, on a schedule or even live, saving you—and all the data owners you normally pester!—tons of time. It should also give you lots of options for displaying the data, like gauge charts, spider charts, area charts, and more. And to help you see at a glance how things are going, some types of software even automatically calculate performance according to green (good), yellow (OK), or red (needs help) indicators based on criteria you’ve set. If your software system can do all this, you have more time to do the more important job of steering the organization toward success.

Track Your Projects

Just as important as knowing how you’re doing, is knowing what you are doing—that means staying on top of the multitude of projects, project managers, budgets, and timetables across the organization. But projects are the vehicle through which your strategy is delivered, so it’s important to track them closely. Unfortunately, this, too, can be very time consuming (and even annoying to your project managers), and that’s where performance management software can help.

Performance management software is critical for keeping everyone up to date with the right information; it also lets you link individual projects to your organization’s goals. (Note that while project management-specific software helps you organize, prioritize, and track tasks, it does not generally allow you to view projects in relation to your organization’s overall strategy.) Not only can you track hundreds of projects across your organization and the tasks associated with each, but you can also see how the results of a project are impacting your organization’s larger goals—and make changes when things no longer align.

Report On Your Results

Performance management isn’t a one-time task that happens at a yearly strategy retreat; it should take place every day. Organizations that are doing it well report on performance both monthly and quarterly. But different audiences need different data. Some organizations are forced to rely on IT or software consulting firms for customized reports, which takes time. (One municipality we know of waited 18 months for software implementation and customized reports; in contrast, organizations using ClearPoint can implement the software and produce any report they need in the space of 18 days.)

Software should make reporting simple. Forget about IT. The best performance management software can quickly create different reports for different audiences (boards/councils, executive teams, department managers, etc.) from just a single set of underlying data. If new data is entered into any single source, the software will automatically update all reports, making it a lot less work to ensure information is accurate and current. You can even automatically send the right reports to the right people, on a schedule of your choosing.

Summary On The Benefits Of Software

  • Dynamically track your strategy.
  • Automatically gather data and organize it appropriately with measures, charts, calculations, and evaluations.
  • Update projects and show alignment between your budgeting strategy.
  • Build reports automatically for different audiences.
  • Customize performance data viewing for all audiences.
  • Easy to use and manage.

Personal Performance Management

Organizational goals are achieved through the efforts of individuals. Personal performance management entails looking at the performance of each employee, and how those individual performance levels are linked and aligned to the strategy of your divisions, departments, and enterprise as a whole. Performance management software can help managers track and report on the work of each team member, including progress on any competencies they are trying to improve or activities they need to manage throughout the year.

In recent years, tracking individual performance has largely revolved around Personal Scorecards (similar to the Balanced Scorecard concept) or OKRs (Objectives and Key Results, a goal framework which involves setting goals attached to specific metrics). Many organizations now track individuals’ goals and results, using a variety of metrics, software tools, and weekly performance reports.

But just because you’re tracking individual performance doesn’t mean that your organization is doing a good job strategically. You might not be tracking the right things. Are personal goals linked to your strategy? Are task lists aligned with your organizational objectives? If OKRs don’t clearly link to your long-term strategy, your employees are wasting their time. Unfortunately, many organizations are so enamored with OKRs and personal scorecards that they forget to start with the bigger picture and drive down to personal scorecards from there.

If you plan to use software for personal performance management, do it right: Make sure the software tool you’re using for personal performance management is the same one that helps you manage your organizational performance management.

Performance management software systems that have the capability to handle both aspects allow you to:

  • View and update an individual’s personal tasks, linking them either visually or mathematically to the organizational strategy.
  • Easily assign clear goals and targets (performance expectations) for teams and individuals. In ClearPoint, tasks appear under certain projects and measures. You can also create personal, one-page scorecards showing an individual’s key tasks and activities and the strategic objectives they are linked to.
  • Remind teammates to update and generate reports that show progress. (Software saves massive amounts of time and energy here.)

Making sure your employees’ goals are in sync with your organizational goals is key to reaching your objectives—your performance management software should help you get there.


Managing performance—both on an organizational and individual level—is crucial for reaching company goals. Comprehensive performance management system software can help you do it more effectively because it:

  1. Keeps all elements—employees, departments, projects, and organizational strategy—aligned and working together to increase the likelihood of meeting your goals.
  2. Simplifies the management process. The best performance management software has features that allow you to:
  • Customize the structure of your strategy in the creation phase.
  • Show alignment across your organization in an easy-to-understand, visual way.
  • Give different individuals customized data views.
  • Quickly produce summary reports for managers and directors to see how all the elements are driving strategy execution.
  • Automate various aspects of performance management, such as data integration, calculations and evaluations, and alerts and notifications.

The time you save using performance management software is time you gain to focus on strategic discussions, make adjustments during periods of change/crisis, and execute on actual projects that move the needle for your organization.

What Is Performance Management Software? A Comprehensive Guide

Ted Jackson

Co-Founder & Alabama Native

Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.

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