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Performance Management Systems for Startup Organization

Most start-ups focus on product, service and finance during their critical initial years. However due to the intense pressure of survival the people and process aspects get neglected. Performance Management system hence gets the last number in priority list because it is considered as HR process.

This can be a dangerous myth to believe. Because Performance Management is an integrated business management process that monitors to what extent your organization and your people are executing the strategic goals that you have defined for your start up.

For effective performance management during start up phases, managers and employees should work together to plan, monitor and review mutually agreed work objectives and overall contribution of the team to the organizational goals. These goals also should be flexible enough so that employees can easily adjust with the changes in organization priorities and feel comfortable in multi-tasking that is unavoidable in start up situations.

Start-ups need a scientifically defined performance management process from day one. This is especially important process for start ups because a well-defined performance appraisal and management process aligns the small multi-tasking team towards a definite direction and provides focus for performance. This also brings lot of clarity in roles, deliverables, results expectations and avoids errors/omissions during executing business plans. It is also strongly recommended to involve employees in the various steps from goal setting, finalizing Key result areas (KRAs) and Key Performance Indicators (KPIs) etc. This not only energizes the employees but also builds their sense of accountability towards their tasks

An Effective Performance Management System should:

  • Cover broad range of jobs in the organization and create clear job descriptions for each of the organizational role.
  • Define smart goals (Specific, Measurable, Achievable, Relevant, Time bound) aligned with business plan document and define KRA’s and KPIs critical for such roles.
  • Set-up clear communication between various internal /external stakeholders, managers and employees for better execution of the mutually critical goals/projects
  • Identify good performance and provide for immediate recognition, pat on the back and rewards
  • Counsel employees to effectively deal with the stress resulting from start up level teething troubles and empower them with appropriate on-the- job training and other career development opportunities.

It is also important to note that performance goals are not the same as a job description (JDs). A JD could be a typical starting point for goals but in startups, JDs themselves can be highly fluid. Also, in a startup, you seldom have established procedures and need employees to commit to results rather than get blind-sighted by work tasks. Thus, it is very important to evaluate employee understanding on his/her role and deliverables from time to time.

In addition to interaction with employees, documented performance information can also be useful for regularly keeping track of progress and to review the ongoing achievement.

Lastly, it would be inappropriate to equate performance management system with annual performance appraisal process (which in most cases are completed with increment completion mindset). Performance management is an ongoing-continual process starting with goal setting and ending with effective performance coaching/counseling and employee development activities.

Thinking of getting into start-up adventure? We can help you out with our strategic HR and OD expertise so that you can build a wining team and achieve your business goals. We believe we can help your organization in setting clear directions, building team commitment and capability to for performance excellence. Please feel free to get in touch with us to discuss your challenges and opportunities as a start up. Together we can take your start up on speedy and sustained growth path.

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