Best Performance Management Systems for Small Companies

Matheen Haneef in Business Technology Aug 30 / 3 weeks ago

Are you running a small business and want to monitor your entire team's performance without the stress? While big companies have numerous HR personnel to conduct performance evaluations, most small business owners have to manage everything from payroll to customer support with maybe two or three people on their team.

Here's what makes it even tougher. You're working with a shoestring budget, you don't have dedicated HR staff, your business changes direction every few months, and honestly, who has time for complicated performance tracking systems?

But you can't just ignore performance management. In a small company, if someone's slacking off or struggling, it affects everyone. Your customers notice. Your other employees pick up the slack. The right performance management system helps you catch issues before they become disasters and shows your good employees that their hard work matters.

Key Takeaways

• Find the 8 best performance management systems with real pricing and honest pros, cons, setup, and other details to find what actually works for your small team.
• Understand why you can't skip performance tracking when every person on your small team directly impacts your business success.
• Follow our simple 4-step process to pick the right system without wasting money on features you'll never use.
• Start with free basic tools from Smart Tools AI before jumping into expensive performance management software. 

Why Small Companies Need Performance Management Systems

• They align all employees towards the same goal. When you have five or six employees in your company, every single one must move towards the same objective.
• A proper performance management system helps prevent burnout. With smaller teams, each individual is expected to perform several tasks. A proper system helps identify when an individual is struggling.
• They ensure tasks are completed properly. There must be good and periodic reviews in the absence of a direct supervisor, which the system can do.
• They are important to retain top talent. When employees feel neglected, they tend to quit. This is where a performance management system is important, which helps provide recognition and value employees based on their performance.

Best Performance Management Systems 

01) Lattice 

Best for growing teams that want structured feedback. Also, suitable for small Companies with 10-50 employees who are ready for formal performance reviews. The platform offers peer feedback, talent review, performance improvement plans (PIPs), goal tracking, and career development tools.

• Pros: A clean interface with solid reporting. Plus, it integrates well with Slack/Teams/Google Workspace.
• Cons: Can feel overwhelming for tiny teams, and the pricing adds up quickly.
• Pricing: Starts at $11/month per seat, with options to choose from various add-ons at additional costs. 
• Free trial: It appears they are no longer offering a free trial. 
• Setup time: 2-4 hours with their onboarding team.
• Support: Phone, chat, and email. Responds quickly within 24 hours.
• Best for: Small companies ready to formalize their performance process.

02) 15Five  

Best for engagement and lightweight check-ins. Perfect for teams who want simple weekly check-ins without heavy corporate processes. Focuses on staff engagement and quick pulse surveys. It includes the HR outcomes dashboard, manager effectiveness indicator, OKRS & goals, 360° feedback, talent matrix, career paths & plans.

• Pros: Super easy to use, great for remote teams, focuses on wellbeing, works with 1+ employees.
• Cons: Limited performance review features, and it can feel too casual for formal reviews.
• Pricing: Starts at $11 per person per month. No minimum users.
• Free trial: You can request a free demo, but it seems like they aren't offering a free trial.
• Setup time: Under 30 minutes.
• Support: Chat and email, generally quick responses.
• Best for: Remote teams who want to stay connected without formal processes.

03) BambooHR 

Best all-in-one HR + performance for small HR teams. Combines HR management with performance tracking. Good for companies that need payroll, benefits, and performance in one place.

• Pros: Everything in one system, excellent customer support, grows with you, and handles compliance.
• Cons: More expensive than standalone options, some features feel bloated, and a 5+ employee minimum.
• Pricing: Custom pricing, typically 10/month per employee. Pro and Elite plans cover performance management.
• Free trial: You can request a demo or fill out a form to get a 7-day free trial.
• Setup time: 1-2 weeks with an implementation specialist.
• Support: Phone, chat, email. Known for exceptional customer service.
• Best for: Companies that need HR management beyond just performance tracking.

04) Leapsome 

Best for OKRs and learning together. It has a good focus on setting goals and employee development. Good for teams that want to connect individual goals to company missions.

• Pros: Excellent goal alignment tools, includes learning management, and integrates with 20+ tools.
• Cons: Steep learning curve, might be overkill for simple needs, European company (time zone support).
• Pricing: The pricing depends on the number of employees, contract duration (all contracts have a minimum term of 1 year), and the modules you purchase. 
• Free trial: 14 days with full platform access.
• Setup time: 1-2 hours, includes guided setup.
• Support: Email and chat, European business hours primarily.
• Best for: Goal-oriented teams that want employee development features.

05) Trakstar Perform 

Budget-friendly option for small HR departments. Straightforward performance management without the bells and whistles. 

• Pros: Easy setup, affordable, covers the basics well, and has no user minimums.
• Cons: Interface feels dated, limited integrations (mainly HRIS systems).
• Pricing: $5/month per employee, and starts with 1 user.
• Free trial: You can request a demo for free, but no free trial option is available. 
• Setup time: 15-30 minutes, and very straightforward.
• Support: Email and phone, US-based team.
• Best for: Small teams that want basic performance tracking without complexity.

06) Engagedly 

Recognition-driven performance tracking. Built around employee recognition and peer feedback. Good for teams that want to boost morale alongside performance tracking.

• Pros: Strong recognition features, good for team building, mobile app works well.
• Cons: Can feel gimmicky and have limited goal tracking capabilities.
• Pricing: Starts at $5-$8 per person per month. Pricing may vary based on Employee Count and Bundling (Minimum pricing $7500/year)
• Free trial: The platform doesn't seem to be offering a free trial. 
• Setup time: 30 minutes to 1 hour.
• Support: Email and chat, response times vary.
• Best for: Teams focused on employee recognition and engagement.

07) Weekdone 

Best for OKR-focused startups. Simple OKR tracking with weekly reporting. Perfect for small teams that want to stay aligned on objectives.

• Pros: Very simple to use, affordable, great for remote teams, works with 1+ users.
• Cons: Very basic performance review features and limited customization.
• Pricing: Free for 1-3 people. $9/user if you choose the annual plan and $10.80/user if you choose the monthly plan.
• Free trial: 14 days of full access.
• Setup time: 10-15 minutes, and extremely quick.
• Support: Email only, usually responds the same day.
• Best for: Startups that want simple OKR tracking without complexity.

08) PerformYard 

This is a flexible system tailored to small companies. It helps perform reviews & check-ins, goal management, Continuous Feedback, and reporting & analytics. 

• Pros: Good flexibility and customer service. Reasonable pricing and works with any team size.
• Cons: Time-consuming for customization, and the interface could be prettier.
• Pricing: Starts at $5 per employee monthly, no user minimums.
• Free trial: No free trial option is available.
• Setup time: It may take 1-3 hours, depending on customization needs.
• Support: Phone, email, and chat. US-based support team.
• Best for: Companies with specific processes they don't want to change.

Key Features Small Companies Should Prioritize in Performance Management Systems

• Budget-friendly with no hidden costs: You should understand the price from the beginning and not face additional charges upon adding your fourth employee. 
• Quick setup that doesn't need a tech expert: If it takes more than an hour to get running, it's too complicated for your busy work schedule.
• Simple goal tracking: Set team goals, check progress, mark tasks complete. No fancy corporate jargon required.
• Compatible with your existing software: Integrates with Slack, Teams, and your payroll, so you’re not forced to deal with multiple apps. 
• Accessible on phones: Your team's always moving, so they need to update progress from anywhere.

How to Choose the Right System (Step-by-Step for Small Businesses)

Step 1: Define what you actually want to achieve

Before looking at features in different performance management systems, you have to figure out your real goals. Are you trying to stop good people from leaving? Or want to keep everyone focused on the same priorities? Write down your most important problems. This will help you avoid paying for fancy features you'll never use.

Step 2: Match the system to where your company is right now

• Just starting out (2-10 people): Go simple. Weekdone or 15Five works great when everyone knows each other.
• Growing fast (10-25 people): You need more structure. Lattice or Leapsome helps you stay organized as you scale.
• Established small business (25+ people): You can consider all-in-one solutions like BambooHR that handle multiple HR needs.

Step 3: Actually test the systems before you buy

Don't just watch demos. Get your hands on the actual software with free trials (if free trials aren't available, you can request clear demos). Set up real goals, invite a few team members, and see how it feels after a week. If it's confusing during the trial, it'll be worse when you're paying for it.

Step 4: Get your team involved from the start

Ask some of your employees to test the system with you. If they think it's a pain to use, they won't use it, and you'll have wasted your money. Their feedback during trials is worth more than any sales pitch.

Using Simple Tools Before Upgrading 

Is a full-fledged performance management system out of your sights for now? It’s not a big deal. A lot of small companies begin by keeping an eye on the essential KPIs using basic tools instead of jumping straight to advanced software.

For instance, you can make use of Smart Tools AI's no-cost Average Calculator to monitor such metrics as average sales per employee or average project completion time. Additionally, our smart Percentage Calculator can instantly provide goal completion rates or improvement percentages for your group. 

These small yet important calculations can be done with zero monthly charges or a complex setup. For the short term, keep your numbers in a spreadsheet to evaluate them in the future to have a better idea of what scaling up features you really want in performance management tools.

Wrapping Up

Choosing the right performance management system for your small company is absolutely important. You have to select one based on your real requirements. Always start simple and test thoroughly before buying. The best system is the one that solves your specific problems without creating unwanted headaches.

FAQs

Q1: How much does a small company spend on a performance management system?

It varies according to the platform and plans they choose. Most small businesses spend $3-12/month per employee. Start with budget-friendly options like Weekdone or PerformYard.

Q2: Do I need a performance management system for under 10 employees?

You may not need. Simple tools or spreadsheets work fine until you hit more than 10 people and need more structure.

Q3: What's the difference between performance management and HR software?

HR software handles payroll, benefits, compliance, and other functions. But performance management only focuses on goals, reviews, and other employee performance-related aspects.

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