Small and Medium Enterprises are core contributors to GDP and employment index, not just for India but globally as well. Limited understanding of technology, finite availability of funds and resources are often a cause of major concern for most small and medium organizations. SMEs can benefit from AI-powered Performance Management Software with multiple benefits that can significantly contribute to overall organizational growth.

SMEs should opt for digitized performance management software:

  • To align individual objectives to the overall business objective
  • To provide Instant insights into organizational and individual Performance and save valuable admin time
  • To drive Employee engagement and improve their productivity
  • To save costs by automating Employee Performance Management process
  • To stimulate growth of SME by increasing their scalability potential

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Small &Medium Enterprises (SMEs) in India are one of the largest contributors to the Indian GDP with over 63.4 million units across the country. Around 6.11% of India’s manufacturing GDP and 24.63% of the service GDP and 33.4% of manufacturing output GDP is contributed by SMEs. And SME’s employ over 120 million people in India.

India’s SME sector plays a crucial role in generating large scale employment opportunities and inclusive development of the rural areas. It employs 20% of the rural workforce and contributes 45% to the overall export of the country. Most of the SME’s face specific issues like:

  • Generating regular cash flow
  • Finding new clients or leads
  • Customer retention
  • Workforce management

While generating cashflow and driving investments may be a major concern for SMEs, the lack of technological know-how is also a limitation it encounters.

Small organizations have a limited number of employees responsible for overall business operations. While large organizations may have buffer resources, small businesses employ limited personnel for managing their day-to-day activities. The managers are responsible for keeping track of each employee’s performance around the desired outcomes.

As small and medium businesses scale up their operations, they have specific requirements in terms of managing employees and their performance. Modern technology can be a key derivative of innovation and performance management in SMEs. When resources are numbered, technology-driven solutions like digital performance management system can complement the day to day working of small and medium organizations.

Let us understand how Performance Management Software can help SMEs:

1) Align Employee Efforts to Business Strategy

A digital Performance Management System or Software alongwith a performance management methodology like OKR ensures that the tasks allotted to your employees are always aligned with your business strategy. In small companies, each employee is valuable and it is easier to identify their capabilities to realize individual goals and align them with business objectives.

A digitized performance management solution helps set individual goals and prioritizes workflows. Additionally, when your employees understand how their performance  contributes to the overall business objectives, they become more engaged and motivated to achieve the assigned goal(s).

Objectives and Key Result (OKR) driven performance management software helps SMEs to create an agile organization.

2) Technology Saves Valuable Administration Time

We have all heard the phrase “Time is Money. Waste it now and pay later.” It is especially true for smaller businesses. Businesses should always look for ways to save time and AI-based performance management software saves small and medium enterprises time to perform administrative activities.

Digitization saves admin from doing mundane and repetitive stuff by automating a lot of processes. Systematic capture of data through digitization also ensures that more granular data is available. Availability of such data means the HR and senior management can get instant and deeper insights on employee performance in tune with the organizational objectives with better access to performance data. The managers can generate detailed reports that analyze the set objectives, progress on each goal, and the need for training and development. SMEs can make informed decisions regarding course correction (if needed), training needs, promotion, recognition and rewards with a wholistic performance management system.

Management can choose from Monthly, Quarterly or Annual reports for performance reviews. You can also choose from 360 degrees, Manager, Reportee, or Self-reviews with an in-built workflow for preparing performance reports with PossibleWorks.

3) Drive Employee Engagement & Improve Productivity

Performance Management System creates a powerful and easy way of communication between employees and managers centered around performance enhancement. Ensuring regular feedback to and fro between employees and their managers also increases overall engagement.

Leveraging a digital and 360-degree feedback system deepens the employee and manager bond through regular conversation. A comprehensive feedback system ensures an unbiased review of employee performance. Managers can boost employee morale and provide coaching and mentoring opportunities for increased engagement. When an employee feels valued and involved in the organization, they are motivated to achieve goals. The result reflects in increased productivity of employees.

4) AI-based Performance Management System Saves Money

A major concern for small and medium enterprises is the availability of capital. Most SMEs consider investment in a digital performance management system an added expense especially when they have limited resources to monitor. HR functions often take a back seat to save expenses for small organizations.

As per a recent survey, by 2035, AI is expected to boost average profitability for enterprises by 38%. A major example of how AI helps SMEs save expenses is chatbots. Chatbots are installed on websites and applications to provide Intelligence-based response to users and customers. Small organizations save on the expense of hiring dedicated customer service personnel on their limited budgets.


5) Stimulate Growth Through Automated Performance Management

AI-based Performance Management Software can prove to be a catalyst in spurring the growth and for small and medium enterprises. The automated AI-powered performance management software is scalable i.e. new features can be added to the software with the growing demand of the organization.

The automated system of performance management helps align individual goals with company objectives, encourages continuous feedback, and provides instant reports. With constant access to the dynamics of the employees and regular insights, the management can make informed decisions regarding performance appraisal, rewards and recognition, training and development. Most importantly, management can assess the performance of individuals, the organization, and decide if any interventions are needed to correct course. Without a digitized system, such proactive decision making is extremely difficult.

However, as Richard Branson says, “A big business starts small.”, and hence, to grow into a successful business, investing today in its resources in a good investment. Investment in managing the performance of resources is equally important as the resources themselves.

Key Elements of a Performance Management Process For Start-ups


In conclusion, we can say that Small Businesses can drive employee engagement, increase productivity, and stimulate growth with automated performance management software. SMEs can have access to all organizational objectives and employee performance at their fingertips by catalyzing growth and innovation through digital performance management.

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