 Startups Should Implement Performance Management Early)
Why (and How) Startups Should Implement Performance Management Early
Why (and How) Startups Should Implement Performance Management Early
A company is only as successful as its people. However, early-stage companies often deprioritize proper talent management and place all their focus on the day-to-day operations of the business. These companies eventually find themselves reaching a point where their talent management processes aren’t keeping up with growth.
Hiring and retaining the right talent for your organization is just as crucial as having a great service or product, especially in the early stages of building a company. In this article, we list some important considerations in implementing employee performance management for startups.
Implementing Employee Performance Management Early
1) Define company values
Firstly, startups should define their company values. Values are the guiding principles and fundamental beliefs of an organization, and there are many benefits in defining company values early on. For example, having a core set of company values makes it easier for a company to hire and retain employees with the right aptitudes. Moreover, values help shape company culture, which will influence employee experience, engagement, and productivity.
In addition to defining values, startups need to ensure that their values are communicated frequently. Only 27 percent of U.S. employees strongly agree that they believe in their organization’s values. Instead of simply listing values on your website, startups need to integrate values into their talent management process. They can do this by:
- clearly and frequently communicating the company’s values
- aligning core values with behaviors expected from employees
- continuously monitoring employees’ actions and behaviors
Integrating values into the performance management process enables the employees to live and practice company values on a day-to-day basis. Companies can also make their values known during the hiring process – write the values in the job description and reiterate these values during the recruiting process.
Candidates and current employees should always be aware of the fundamental beliefs of the company. One tip on values – make them as actionable as possible. If one of your values is “honesty,” define specific behaviors that enforce and demonstrate honesty. (There are many resources (Korn Ferry, Iota Consultants, Ignition Group, etc.) that can help you define or adapt company values.)
“If I could go back and do Zappos all over again, I would actually come up with our values from day one.” – Tony Hsieh
2) Align goals
Effective performance management begins with goal alignment. Understanding company objectives is imperative. Half of the workforce doesn’t know what is expected of them. Managers should understand every company’s mission, clearly communicate the objectives, and make them easily accessible and visible for all team members (e.g., team-wide monthly progress report).
In terms of goal alignment, a common question that startups often face is “should I use OKRs?”
OKRs (Objectives and Key Results) are often used to cascade goals from the organizational level to the individual level. This can help create goal alignment as it helps employees understand how they contribute to organizational objectives.
OKRs are powerful; however, if a company’s strategies and objectives are frequently adapting (which is often the case in startups), the structured top-down approach of setting OKRs from the organizational level to department- and then to individual levels can be a hassle.
OKRs would need to be adjusted each time overall organizational strategies are changed. Frankly, this is a significant exercise that is not worth the time.
This doesn’t mean a company shouldn’t align goals. One approach is to set up OKRs at the organizational and department levels on a monthly basis and let managers delegate and own their key results and adapt as often as needed.
“Building a visionary company requires one percent vision and 99 percent alignment.” – Jim Collins and Jerry Porra
3) Develop a culture of feedback
Feedback is crucial in the talent management process. There are many benefits to having regular feedback conversations with employees. Firstly, it motivates employees, thus increasing employee engagement & productivity. Secondly, it generates lots of employee performance data which can enable better training and talent decisions. Finally, it enables better work relationships which can have a significant impact on company culture.
While managers may avoid giving feedback due to fear of hurting an employee’s feelings, more than half of employees want corrective feedback over praise and recognition! Most employees want real-time feedback and recognition for jobs well done.
The younger generations (Millennials and Generation Z) want 50 percent more feedback than other generations. Sharing feedback can be challenging at first. Enforcing the right processes and rituals early on will help ingrain feedback into your company culture. It is worth noting that creating and sustaining a culture of feedback is easiest to implement early on.
When it comes to documenting feedback, pen-and-paper approaches can be sufficient for early-stage companies. If an organization has more than 15 people, it will highly benefit from a performance management system that helps store and analyze feedback, objectives, etc., in one place. Ultimately, this will help simplify the performance management process and enable people analytics to help make better talent and training decisions.
“Make feedback normal. Not a performance review.” – Ed Batista
Conclusion
Implementing a performance management process in the workplace early on will better equip startups in developing and motivating their employees and ultimately improve a startup’s success and growth.
Remember that culture and people cannot be replicated – these two factors often differentiate a startup from its competitors. Your culture and people are worth the investment upfront.
Image Credit: ron lach; pexels; thank you!
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