Performance Review Options for Startups

You probably know your employees dread performance reviews, but did you know that most managers are uncomfortable with them, too?

If you fall into this category as well, it’s good to know you aren’t alone. Performance reviews are difficult to do, but they are the basis of a happy, well-trained staff. That is, if they are done right.

In this article, let’s look at performance review options for startups.

Ditch the Annual Review

Who really wants this hanging over their head all year long? Plus, when you have one major annual review, it makes it hard to accurately take into account your employee’s breadth of work all year long.

Ultimately you want many examples but waiting from January to January requires an immense amount of research, and usually the reviews become less detailed and more of an overview of the employee’s overall body of work instead of specific examples.

Conduct Regular Reviews

Another option instead of the annual review is a more frequent review. Consider providing real-time feedback. If you are a project-based business, you might do your reviews after each project. If you aren’t, consider doing short monthly reviews.

By doing more regular reviews, you give yourself more time to praise good work. In addition, you can catch problems while they’re small enough to fix. If issues are left to fester for a year, you can end up with major issues.

Have Ongoing Reviews

In an ongoing, continuous review situation, these become more of a coaching system instead of ratings system.

A rolling review requires your managers to provide consistent feedback, so while it is time consuming, it allows for better employee coaching.

Consider weekly or bi-weekly sessions. Give managers a general outline on what should be covered. Make sure it’s coaching-centered.

Change the Name

Since most employees hate the term, “performance review,” call it something different.

Get creative with the name. As an example, you might have monthly coaching sessions, or you might have monthly mentoring meetings.

The goal of these might be helping your employees perform and grow to the best of their abilities. Ultimately, they’ll have a better shot at success as will your startup.

This real-time review and mentoring process lifts your employees up instead of stifling them with the threat of a review.

Forgo Ratings Systems

Traditional review systems often involved a type of scale, usually a number scale. For example, managers might rate the ability of their employees to communicate on a 1-5 scale, with five being the best.

Other times, you might see something like, “needs improvement, acceptable, meets expectations, or exceeds expectations.”

These types of ratings systems are often too generic and open to personal interpretation. They really don’t give an accurate representation of the employee’s body of work. Your staff member might be great at product development, but not so great at communication, and there’s no reflection of this in the traditional ratings system.

Ditching the old system means concentrating on what your employees are doing right, and then it means working on how to make them even better at what they do. In the end, you want more productive, skilled workers, so your reviews should reflect this goal.

Use 360 Reviews

These reviews take the burden off your manager and put it on your entire team. With this system, everyone who works and interacts with a specific employee does a performance review one or two times a year.

You’ll find online apps to help you put this in place. First, develop a set of criteria, questions, and ratings to measure each person.

You want to create a positive culture behind this type of review. It’s important as well to keep all responses anonymous.

The 360 review is quite beneficial for your managers, too, as their staff can evaluate them. You’ll find this helps them develop even better leadership qualities.

Final Thoughts

Put your performance review system into place before you start hiring for the best results. This helps you create a culture where feedback is encouraged and appreciated.

You want your employees to take pride in their work, and a well-thought out review system can help them do just that. You’ll encourage accountability and productivity.

In the end, healthy performance reviews can help ensure the success of your startup and the retention of your employees.

Are you a new startup ready to succeed? Are you looking to get your new business off the ground and watch it rise to success? We are here for you. We can help answer your questions and guide you through the process. Outsource your HR duties, finances, payroll and more to us. Contact Escalon today to get started.

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