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Performance management software. What does it cost and what does it provide?

Performance management software is a term increasingly used in the HR field. But what is actually meant by it? Performance Management is a measurement and management method that helps define organizational strategy and achieve goals. Performance management is all about aligning employee performance and development with the organization’s goals. In this article, you’ll learn more about what performance management software costs but more importantly, what it delivers.


Investing in Performance management software

Purchasing performance management software, like purchasing any type of software, is not just an investment in money. Preparation for the purchase requires time and can take up to several months. By looking first at the problems in the current HR cycle and then at the needs and requirements of new HR software, you have enough information to choose a software vendor.

Implementing new HR software, not to mention adopting the software, also takes time. The success of any new system hinges on its embrace by the user. Furthermore, performance management requires a lot of discipline. Discipline in setting goals and outcomes. And in tracking progress and then making any necessary adjustments to processes and employees.


Different types of performance management software and prices

Performance management software can be divided into 2 types:

1. Reporting tool (AFAS or SD WORX).
The advantage of this is that you are building a digital file for each employee. The disadvantage of such a tool is that there are often no built-in feedback capabilities and and does not provide an ongoing dialogue between employee and manager. Price range of this tooling is approx. €2 per employee.

2. Complete performance management solution (Learned).
This new generation of software provides a complete solution that digitizes and replaces the entire HR cycle in the form of a continuous dialogue between employee and manager. These modern and quality development conversations increase employee engagement by up to 280% compared to employees who do not have conversations with their managers. This translates into higher productivity of up to 26%(Gallup 2017 survey)

The cost of performance management tools is slightly higher than if the software is only about reporting the HR cycle.

Learned’s price range is $4 to $6 with volume discounts starting at 100 employees. Here you can find more information about the package that suits your organization!


The benefits of performance management software

However, the higher cost outweighs the many benefits of a good performance management tool that provides for much more than just reporting:

  • Greater motivation through clear expectations.
  • More visibility into a person’s performance.
  • Greater focus on developing professionalism.
  • More information that can be used (e.g., in assessing and rewarding).

Learned’s research shows that there is a large savings in time by implementing continuous dialogue. Supported with the right software, this results in time savings of 44%. Time you can use as an HR department for strategic HR projects and on the human side of HRM.


What is the return on investment of performance management software?

Assuming an investment of approx. €5 per employee per month for a software platform that supports the creation of an ongoing dialogue, the annual investment is approx. €7.200. Considering an adoption phase of the new methodology, the maximum ROI in the first 3 years will be between 1200% and 1600%.

Calculate the
(ROI) for your organization by deploying continuous dialogue and a modern development conversation within the HR cycle. Watch the video demo or use Learned for free for 14 days.

Or immediately download the free ROI Calculator, enter the data and calculate how much time and money you can save for your organization.

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