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If you are reading this blog then you have probably tried to evaluate employee performance using a paper based appraisal process and know how time consuming it can be. Often such performance appraisals involve a ‘one-size-fits-all’ form that is trying to be all things to all people. It then gets passed back and forth from HR to manager, to employee.
During this exhausting exchange, HR are generally chasing the process ensure it is completed on time. Finally (if it gets back to them) they need to evaluate employee performance data, including capturing employee’s strengths, development areas or career aspirations. The problem with such a manual approach is that it is virtually impossible to capture and act on relevant data which makes the performance appraisal process relatively meaningless as paperwork is filed never to be seen again!
There is a tangible cost to be placed on the HR and Manager time and resources used managing a manual appraisal process with very limited return. There are many occasions where people have cited development needs or career aspirations during their performance appraisal but get frustrated when nothing ever happens as a result, despite outstanding job performance. Carrying out a meaningful appraisal meeting takes time in terms of preparation, collecting feedback, considering performance against core competencies or company values and specific objectives. This is a lot to cover in one session and valuable data will be discussed that can be a really powerful driver of high performance. Paper based appraisal systems just don’t cut it any more.
In a rapidly evolving digital workplace, traditional ways to evaluate employee performance—most notably the paper-based appraisal system—are increasingly being replaced by smarter, digital alternatives. Online appraisal systems are becoming integral to modern HR strategies, offering a wide range of benefits that touch every part of an organisation. From boosting productivity and improving reporting accuracy to increasing employee engagement and streamlining performance conversations, the transition to online appraisal systems is not merely a technological shift, but a strategic one.
Perhaps the most immediately recognisable advantage of online appraisal systems is the administrative and operational efficiency they introduce. Traditional, paper-based appraisals are time-consuming, fragmented, and difficult to manage at scale. Printing, filing, and manually updating forms not only wastes time but also introduces the risk of human error and data loss.
According to a study by McKinsey & Company, practical tools and systems can reduce time spent on administrative HR tasks by as much as 40%. For a mid-sized organisation with 500 employees, if each appraisal takes 3 hours to complete and manage manually, that’s 1,500 hours per cycle. With an online appraisal system automating much of the process—notifications, form completions, and even performance tracking—the time spent can be halved, saving upwards of 750 staff hours.
Even with an average hourly wage of £25 for HR and managerial staff, this equates to a direct saving of £18,750 per appraisal cycle. Over time, and across multiple performance reviews (e.g. mid-year, annual), the financial return becomes even more substantial.
One of the most valuable features of online appraisal systems is their ability to capture, analyse, and report on performance data in real-time. Where paper-based systems rely on manually collated data, which is prone to inconsistency and delay, digital systems allow HR and leadership teams to access dashboards and reports instantly.
This real-time access means organisations can track performance trends across departments, identify high-potential employees, and flag areas of concern much more quickly. Moreover, analytics derived from consistent and structured data inputs allow for more strategic workforce planning and talent management.
Beyond HR, online appraisal systems positively affect overall productivity. Managers spend less time chasing documentation and more time engaging in meaningful performance discussions. Employees have clearer visibility into their goals, expectations, and development plans, which enhances focus and motivation.
For example, research by Gallup shows that employees who strongly agree that their manager helps them set performance goals are 3.6 times more likely to be engaged. Engagement, in turn, has a well-documented correlation with productivity: companies with highly engaged teams show 21% greater profitability.
There are many other elements to factor in when thinking about the transition from paper to an online appraisal system. Your CFO may see it as an unnecessary cost to their bottom line and you may need to present a business case to secure budget, but what else does it deliver:
At Actus we view people performance as we do projects. You don’t start a new project and then review right at the end do you? No, you keep on monitoring progress, the budget, record achievements, resolve any issues and ensure it is completed on time. That is what we should be doing with our people, focusing on goal setting, constructive feedback and continuous improvement. These are all configurable aspects that we can configure our online appraisal system to do.
The traditional once-a-year sit down appraisal meeting has been replaced with year-round performance conversations and regular check-ins to ensure clear expectations of the job role and individual objectives are in place. An online appraisal system enables that year-round approach making it a real-time tool enabling both manager and employee to keep a continual dialogue. This will then ensure no nasty surprises when it comes to the end-of-year review.
We know that individuals are going to be more effective if:
Better still, as a manager, you can catch them doing something great and recognise that achievement in real-time. If you can capture that in your online appraisal system over the course of the year then the performance appraisal process is going to become much easier during the final review period.
If you’re not wasting so much time chasing up the paperwork, then you can dedicate more time to value-added work or strategic thinking. This is something we struggle to find time for but is so important for the evolution of our organisations.
We also talk a lot about the right culture, attracting talent and employee engagement. Increasingly people expect everything to be readily accessible and up to date and that means it needs to be online. By comparison a paper based performance management process seems antiquated and disengaging – it must be time to change!
Employee engagement is no longer a soft metric. It has become a critical driver of organisational success, influencing everything from retention to innovation. A well-implemented online appraisal system supports employee engagement in multiple ways.
One of the main barriers to effective performance management is inconsistency in managerial practices. Some managers are excellent at holding regular, structured conversations with their teams; others are not. An online system levels the playing field by prompting and guiding managers through conversations using structured templates, reminders, and checklists.
For instance, systems like Actus ensure that one-to-one meetings are diarised, objectives are updated, and progress is reviewed consistently. This regular cadence of feedback ensures that performance management is not a once-a-year event but a continuous dialogue, which is far more effective in maintaining motivation and alignment.
An online appraisal system allows employees to engage more actively with their own career development. Instead of filing away development goals never to be revisited, the system keeps these front of mind. Employees can update their progress, flag new learning needs, and request feedback in real time. This autonomy drives engagement by making development feel personal and continuous.
Additionally, many modern systems provide space for career aspiration conversations, which are often neglected in traditional appraisals. This creates a stronger sense of purpose and direction for employees, which, again, is closely tied to retention and performance.
Digitally capturing performance conversations and ratings also introduces greater transparency and accountability into the process. Managers are less able to overlook employees, and biases can be more easily spotted by HR through consistent review patterns. This supports a culture of fairness and inclusivity, which is key to both engagement and employer brand.
Not all online appraisal systems are created equal. While many HR Information Systems (HRIS) offer appraisal modules, these are often ‘bolt-ons’—basic repositories for storing completed reviews. In contrast, purpose-built systems like Actus are designed specifically to support and improve the entire performance management lifecycle.
Actus is more than a digital appraisal form. It offers a comprehensive suite of tools including:
This integration ensures that performance management is treated as an ongoing, strategic process rather than a compliance task. It aligns individual goals with organisational objectives and supports continuous development.
One of the common pitfalls of HRIS bolt-on systems is poor user experience. If the appraisal module is buried in a complex system, adoption rates suffer. Actus, being purpose-built, offers an intuitive interface designed with managers and employees in mind. Simple navigation, reminders, and visibility of performance data all contribute to higher engagement and completion rates.
Moreover, Actus includes features such as action tracking and automated reminders that help maintain momentum. It nudges managers towards regular performance conversations and ensures key milestones—like probation reviews or quarterly goals—are not missed.
By using Actus, HR gains a centralised view of performance across the business. This visibility allows HR to identify trends, support underperforming areas, and highlight development needs at a macro level. Rather than spending time collating paper forms or chasing up missed reviews, HR can focus on strategic initiatives such as succession planning, leadership development, and workforce optimisation.
Furthermore, Actus offers reporting dashboards that can be used at board level to demonstrate the link between performance and outcomes. This elevates the role of HR from administrator to strategic partner, armed with data-driven insights.
Organisations that have adopted systems like Actus frequently report tangible business benefits. For example:
These case studies demonstrate that moving to a digital, purpose-built platform does more than digitise paperwork—it transforms the culture and capability of performance management.
Of course, any shift to a new system must contend with change management. Common concerns include the perceived complexity of the new system, data security, or the time required to train users. However, these concerns are generally short-lived when the long-term benefits become clear.
Most providers, including Actus, offer comprehensive onboarding, training, and customer support to ease the transition. Moreover, once managers realise that the system saves them time and supports better conversations with their teams, adoption tends to accelerate naturally.
The benefits of online appraisal systems are compelling and far-reaching. From hard financial savings and increased productivity to improved employee engagement and strategic HR capability, the shift from paper to digital is both a practical and a cultural upgrade.
However, the full value of this transformation is only realised when organisations go beyond bolt-on solutions and invest in purpose-built systems like Actus. These platforms are designed not just to store appraisals but to facilitate a culture of continuous performance, development, and alignment.
In an age where talent is the most valuable asset an organisation can have, performance management should not be an afterthought—it should be at the heart of business strategy. And with online systems now more accessible, scalable, and user-friendly than ever, the case for making the shift is clearer than ever.
So, in summary, it is completely understandable to question the perceived upfront costs of implementing an online appraisal system and it’s also very natural to be nervous about introducing new technology, but the benefits really do far outweigh the cost and if you keep it simple and communicate the benefits to all the results will speak for themselves and you’ll never look back! Why not take a look at our White Paper on building the business case or book a demo of the Actus appraisal system below.
White Paper: Making the Business Case for Performance Management in the Cloud
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