Performance Management at Startups
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Performance Management at Startups
Giving and receiving performance feedback is a crucial part of career development.
BS
Beth Scheer
As your company approaches 20+ employees, it will become clear that you can’t track performance feedback in a spreadsheet. You can try! But this will get messy very quickly. So we’ve put together some guidelines to help you avoid spreadsheet purgatory.

The guidelines will address how to:
Manage the communication process around feedback
Choose a performance feedback tool that works for your company
Deliver feedback (the good and the difficult)
Use feedback to drive performance

Hopefully these guidelines and tips help you motivate and engage your employees. The earlier you think about a systematic performance management process in the workplace, the better alignment you will have between employees, their career goals and overall company objectives.

This is a living document that we’ll edit and update as we learn and get feedback. We look forward to a thoughtful and productive conversation about this topic. Don’t hesitate to contact
, Homebrew’s Head of Talent, if we can help your startup think through these issues.

Huge thank you to Kim Malone Scott at
for her input on this working document.

Performance Management

Giving and receiving performance feedback is a crucial part of career development. In startup culture, where things move at a frenetic pace, it doesn’t make sense for anyone to wait a year to find out where they stand in terms of performance. Employees need constant feedback so they can adjust their behavior and make improvements or modifications. If no feedback is given by managers or peers for an entire year, too much time goes by without feedback and without alignment on goals and how to measure success.

So what works?
Setting goals and sharing them with your colleagues
Getting, giving and encouraging impromptu feedback
Recommended tools for implementing review processes

Goal Setting… the New OKR

There are strong business reasons to set goals:
Organizations that use formal goal setting exercises are 3.5X more likely to be in the top tier of financial performers every year.
Only 7% of employees report fully understanding their company’s business strategies and what’s expected of them to help achieve company goals.
Making goals visible to everyone is a necessary condition for consensus and alignment in an organization.


Getting Feedback

Getting feedback from your team sets a strong example that you are self aware and working on improving. If you create a culture of open and honest communication, employees will want to share their thoughts. Here are some tactics:
Open your door. Don’t just have an “open door policy.”
Remain constant and consistent in asking for feedback. It may not happen the first time.
Get to know your team as individuals. Eat meals and participate in non work related activities. This builds trust and rapport.
Follow up with them regarding feedback they have given. Have you improved? How can you improve more?


1:1 Meetings - A Good Place to Get Feedback

For starters, managers should be having
weekly
1:1s with their direct reports. This should take the form of a 30 minute meeting to connect and review priorities, goals, concerns, or any roadblocks the employee may be experiencing. Also, the 1:1 is a good opportunity to solicit feedback from direct reports. However, it’s NOT the time to deliver feedback.

How should the 1:1 be structured?
The direct report should come prepared with an agenda (sent in advance so the manager has time to prepare).
Managers need to be focused (phones off/no distractions).

What should you get out of the 1:1s?
Do you have alignment between employee and manager?
Is there clarity around role expectations and performance?
Is the employee engaged?
Is the employee’s workload manageable?
Is there anything going on that may be impacting his or her work?
What can the manager be doing to support him or her?

This is a time for the employee to ask questions about the business that may need some explanation. Having the right performance management tools will help you come prepared because you will be able to remember what items need follow up.

Giving Feedback

Giving and encouraging feedback shows you are in tune with how people are performing. Feedback should be given in the most transparent, direct way possible. No “suggestion” boxes where people can hide behind their thoughts. Give feedback in person.
Create a safe environment. The person receiving the feedback needs to feel comfortable and know it is coming from a good place. This only happens when there is a solid pre-existing relationship of trust and proper context for the feedback.
The positive feedback should be outweigh the negative. Don’t deliver this feedback at the same time because it dilutes the praise and can make the criticism less clear.
Be specific and offer examples.
Don’t delay providing feedback.
Be firm and direct, but not mean spirited.


The best way to deliver feedback, both praise and criticism, is to do it right away and in person. Good feedback gets measured at the other person’s ear, not at your mouth. So make sure you know how your direct report feels about what you’ve said.

How should these conversations be structured?
If you see somebody do something great or make a mistake tell them right away.
This often means providing feedback in-between meetings. Make sure you have time between meetings, or just be willing to be late to your next meeting.

Performance Management Tools

Performance Management Tools help companies align their resources, systems and employees with their strategic objectives and priorities. In simpler terms, they offer a way to gather and calibrate feedback for employees and set and track individual and company goals.

We looked at various performance management tools on the market and selected a few that are are a fit for early stage companies. We encourage you to demo them and see what works best for you.

Homebrew's recommended performance management tools
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Culture Amp
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Reflektive
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Betterworks
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Lattice
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Careerlark
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Next up

Adjusting Compensation
Unless an employee’s job changes, his or her salary shouldn’t change.