Startups: Manage Employee Performance Right from the Start

To Succeed, Start Managing Employee Performance Right from the Start

When we’re in startup mode, it’s easy to put all our focus on market research, product development, financing, marketing and sales. What we often forget to focus on is setting up basic employee performance management processes to support the growth and success of both our business and our staff. Since our people ending up being our most strategic resource, and our only sustainable competitive advantage, it’s vital to have processes in place to maximize their performance right from the start.

There are three basic performance management processes every company should really have in place, regardless of their size:

1. Goal management
2. Regular feedback on performance
3. Performance based employee development

Effective goal management includes setting organizational goals, communicating these to all staff, establishing individual goals for staff that are linked to your higher level organizational goals, periodically reviewing progress on goals (individual and organizational) and communicating the status of goals up and down the reporting chain. Periodically, it can also be important to review goals to ensure they are still realistic and relevant – a rapidly changing business climate can make this imperative. Finally, it’s important to regularly review performance on goals and give each employee feedback on their contributions, so they know what they did right, and what they can improve. Formalizing this process is a great way to communicate company values and priorities, and ensure everyone is working collaboratively towards the same objectives.

Giving employees regular feedback on their performance is also important to everyone’s success. While we can and should do this informally, on an ongoing basis, it’s also important to setup a formal process for giving feedback. A formal process will give this activity the weight and value it deserves. A formal performance appraisal should ideally evaluate each employee’s performance of key competencies and their goals. It’s a vital way to manage employee performance, and identify, document and address any performance issues early on.

Finally, it’s important to establish development plans for our employees. The best employees are those who are continually developing and expanding their skills. Start by looking at each employee’s performance, and identify strengths and areas for improvement or expansion. You should do this in context with the company’s and the employee’s goals. Then put develop plans in place to help improve or expand the employee’s skills and expertise in needed areas. It’s important to then also look for improvements in performance to make sure the training has been effective.

“Basic performances management processes are vital to the success of your employee and your company.”

These basic performances management processes are vital to the success of your employee and your company. When your company is small, it might seem like a lot of extra work to do any of this formally – but remember, you’re setting precedents. It can be easier to evolve and change your processes as your company grows, than to implement new processes. Initially, you can probably manage these processes manually, using paper or electronic forms. As your company grows, you should investigate automating and integrating them using one of the many software tools available on the market today. Many will pay for themselves in terms of the time and paper you’ll save.

This post was contributed by Sean Conrad, a Certified Human Capital Strategist and Senior Product Analyst at Halogen Software, one of the leading providers of employee performance management solutions. He’s passionate about helping companies of all sizes improve their employee performance management practices. For more of his insights on talent management, read his posts on the Halogen blog, and to learn more about best practices visit Halogen’s Talent Management Centers of Excellence.