Performance Management Tools: A Buyer’s Guide

June 20, 2025

In today’s fast-paced work environment, tracking performance isn’t just about annual reviews. Businesses are increasingly turning to performance management tools to set goals, provide feedback, and improve employee engagement year-round. But with so many platforms available, how do you choose the right one?

This buyer’s guide breaks down what performance management tools do, key features to look for, and which solutions are leading the market in 2025.

What Are Performance Management Tools?

Performance management tools are software platforms designed to help organizations monitor and improve employee performance. These tools support activities such as goal-setting, feedback, appraisals, skill tracking, and development planning. The goal is to align individual performance with business objectives while fostering continuous improvement.

Benefits of Using Performance Management Tools

Clearer Goal Alignment: Set and track OKRs or KPIs that link employee actions with company strategy.
Continuous Feedback: Encourage timely coaching and recognition instead of relying solely on annual reviews.
Increased Engagement: Empower employees with visibility into their progress and opportunities for growth.
Data-Driven Decisions: Use performance data to inform promotions, training, and workforce planning.

Key Features to Look For

When evaluating tools, consider platforms that offer:

Goal setting and tracking (OKRs, SMART goals)
360-degree feedback and peer reviews
Real-time performance dashboards
Employee development plans
Automated review cycles and reminders
Integration with HR and payroll systems
Customizable reporting and analytics

Top Performance Management Tools in 2025

Here are some of the most trusted tools used by businesses of all sizes:

Lattice: Known for continuous feedback, goals, reviews, and engagement surveys—all in one modern interface.
15Five: Combines weekly check-ins, pulse surveys, and performance tracking to boost transparency and team morale.
Workday: Offers enterprise-level performance and talent management integrated with HRIS features.
Betterworks: Focused on OKR alignment and enterprise growth with robust analytics tools.
Leapsome: A flexible platform designed for fast-growing companies, offering reviews, goals, learning, and engagement features.
Culture Amp: Blends performance reviews with employee feedback and culture-building tools.

How to Choose the Right Tool

Before committing to a tool, assess your organization’s needs by asking:

Do we need a system for formal reviews, continuous feedback, or both?
How many employees and managers will use the platform?
Do we require integration with existing HR or payroll systems?
How customizable and user-friendly is the software?
What kind of support, training, and onboarding does the provider offer?

Conclusion

Performance management tools are essential for businesses aiming to foster accountability, growth, and employee satisfaction. By choosing the right platform, your organization can replace outdated review cycles with a more dynamic, people-first approach that drives results.

Sources:
1. SHRM – Performance Management Trends
2. Gartner – Magic Quadrant for Talent Management
3. Lattice.com
4. 15Five.com
5. Betterworks Resources
6. CultureAmp Blog
7. Workday.com