Performance appraisal (PA) is a system of evaluation of individual or team task performance. A performance appraisal software is an application that helps in the assessment of performance and appraisal management. A major aim of performance evaluation is to evaluate accurately an individual’s performance and contribution as a basis for making reward allocation decisions. The analysis of an employee’s skills and abilities is a prime advantage of performance appraisal software. This type of software is vital to for the retention of an efficient workforce and talent. It analyzes and monitors performance of employees on an ongoing basis, with an objective to improve workplace productivity and employee efficiency. Conducting performance reviews helps enterprises reward and identify performers and also in providing feedback to them. Some products even allow the tracking of progress on performance goals and tie compensation to good performance.
The major factor responsible for driving the performance appraisal software market is a rise in the need for simplified, effective, and unbiased performance appraisal systems and processes by organizations. The increased use of the Internet is driving the performance appraisal software market. Businesses are increasingly shifting toward cloud for day-to-day activities and critical operations. Many companies across the world are adopting fully digitized systems in their HR departments. These factors are likely to propel the market in the coming years. Further, the need for replacement of old and traditional systems is anticipated to offer lucrative opportunities to the market in the coming years.
Enterprises are progressively adopting data integration solutions due to a rise in complexity and increase in complications in the maintenance and deployment of reliable data interfaces. An increase in demand for visual analytics and data integration is a key trend that is expected to drive the performance appraisal software market during the forecast period. The other trend gaining momentum in the market is the emergence of cloud computing services. Performance appraisal software also helps in the real-time decision making process by accessing real-time fusion of data. This, in turn, helps enterprises to bridge the gap between businesses and IT and understand and transform business processes.
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However, data security issues are estimated to hinder the market during the forecast period. Privacy and security of data related to employees are prime concerns in the adoption of performance appraisal software.
The global performance appraisal software market can be segmented based on component, enterprise size, vertical, and region. In terms of component, the market can be bifurcated into software (on-premise, cloud (public cloud, private cloud), and hybrid) and services (managed service and professional services (maintenance, integration, and installation)). Based on enterprise size, the market for can be categorized into SMEs and large enterprises. In terms of vertical, the global performance appraisal software market can be divided into BFSI, telecom & IT, media & entertainment, transportation, retail & e-commerce, utilities, health care, government, and education.