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Home / Blog / A Start-Up's Guide To Building a Performance Management Cycle

A Start-Up's Guide To Building a Performance Management Cycle

Overcome the stigma of performance management and build a culture of feedback at your start-up

Hibben Rothschild
Founder and Fractional Head of People at foundHR, and PoepleOps expert
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When a founder, or founders, first come together to create a new business they often do so to disrupt an industry, to fill a need not being met, or improve upon a current model. They seek to do something different and, in doing so, they will find their success. Part of this spirit inherently wishes to denounce more traditional or ‘corporate’ practices. One of the biggest things many start-ups loathe to incorporate is anything that remotely nods to Human Resources (HR).

There’s an unfortunate assumption that implementing HR practices is synonymous with bureaucracy and red tape — the worst news for start-ups that need to be nimble and quick. Tracking productivity can be construed as micro-managing and performance reviews can feel redundant when the company is small and everyone is in constant communication. The problem? They set themselves up for failure as they scale.

In This Article

A manager reviewing the performance and work of an employee.

Starting Out Right at Your Start-Up

In foregoing seemingly ‘corporate’ routines such as employee performance reviews, start-ups miss out on forming a solid feedback culture from the very beginning.

On the other hand, companies who do place importance on giving and receiving employee feedback at every level, creating clear performance rubrics, and providing training and coaching to managers are weaving this into the fiber of their being.

The goals of a performance management process are to create:

  • Avenues where employees feel valued and where they have a voice,
  • A culture where they can grow professionally, and
  • Trust between leadership and individual contributors.

As a start-up scales, this foundation will make them a stronger business and attract and retain their top talent. These employees will be more engaged and come to the table with creative new ideas.

Financial Barriers

There is a range of tools for employee development available, from Google Docs to more robust free HR software solutions, that can accommodate every budget.

Limits to Time Commitment and Training

To train managers on best practices, look into free online tools or more formalized manager training programs offered by consultants and learning platforms.

Lack of Metrics

Taking the time to have each manager develop a job description (even an informal one) that outlines the key functions, skills, performance expectations, and competencies of the role can create meaningful clarity from which to provide feedback and track progress and growth. I also recommend encouraging managers to sit down at least quarterly with their direct reports to align on individual goals and priorities for the immediate future.

Culture Clashes

When considering how to integrate performance reviews into your company, both the cadence and the content can be tailored to your culture, size, and company goals. 

The way in which you do performance management can grow and shift to meet you where you are. Gone are the days of overly formal annual reviews and long-winded employee performance plans. Some best practices for Performance Management in recent years are to keep things simple and check in more often.

A start-up manager conducting a performance review.

Setting Your Performance Review Frequency

I recommend going with either a twice-per-year (mid-year and end-of-year) review cycle or a lighter-touch quarterly review. The latter should include weekly informal one-on-one manager check-ins to start.

When deciding between these two strategies, consider whether your projects are longer or shorter-term. Are your employee’s goals and priorities time-bound, or ongoing?

If things are moving and changing rapidly I’d recommend a quarterly cadence and regular check-ins to ensure timely feedback and ample time to pivot based on results. If you feel that feedback given on a quarterly basis wouldn’t change much, a twice-per-year cadence will be the sweet spot.

Your Performance Review Plan

Performance reviews are a collaborative process that looks at individual performance as well as plotting an individual contributor’s work against organizational goals.

A performance review should include at least two things: Self-review and a manager review, plus an optional peer review.

Self Review

It’s important to give an employee a chance to share their own voice and reflections. It allows them to highlight the things they’ve accomplished, show how self-aware they are of their areas of opportunity, give feedback to the manager, and make it clear what their professional goals are.

It is also the stage of the performance management cycle where they can look at their own career goals and whether they are still on the right path to reach them.

Manager Review

The manager review should mirror the self-review and allow the manager an opportunity to respond to what the employee has shared. They can agree, disagree, or expand on what the employee review brought to light. They should also use this section to clearly document if this person is on track for a promotion, set performance goals for the future, and address any concerns.

Peer Review

I recommend doing peer reviews at least once a year. They do not need to be the same frequency as individual and manager reviews, but it’s helpful for managers in both understanding performance and cultivating a culture of well-rounded feedback.

I am also lumping in upward feedback here. Being a manager is an additional skill set that needs cultivation, especially if the leader in question is still developing new skills in management. Getting feedback from direct reports is part of their growth.

It can be difficult to give upward feedback and often requires some manager training, but if you can foster this culture early on amongst your managers and employees, you’ll be well served. Also, peer feedback is a great resource among managers as they aren’t always able to observe all aspects of their direct reports’ work.

A manager giving employee feedback using a performance review template.

Structuring a Performance Review

Within each performance management cycle, you want to start with a self-evaluation.

Allow the employee to reflect on their overall performance during the time period. Let them share what they feel is going well, what could be going better, roadblocks they face, progress made on goals, feedback for their manager, and some time to check in on their professional development plan. After this, there should be a manager review in response to the employee’s self-evaluation. I also recommend incorporating peer feedback from approximately three to five team members who can add additional context and insight at least once or twice per year.

If you want to take things a step further, I recommend incorporating company values, business goals, and key competencies into your reviews. These should be aligned and communicated by your leadership team.

Concentrate on three or four behaviors you think are most important to your business. They should be short and easy to remember - for example, helpfulness, creativity, problem-solving, kindness, and curiosity.

Incorporate a question into your reviews asking the individual and manager how this person has embodied these attributes. This adds an additional layer where you highlight what is most important to the company, and help employees align with these priorities. Thereby, you create a continuous process of clarifying what success at your company really looks like in practice, regardless of level or department.

Performance Review Templates

You want to provide some guidance in your performance review template to help structure the discussion. Here are simple examples of performance review templates to get you started:

A Template for Self-Evaluation

  • What’s going well? Highlight any specific accomplishments, wins, goals achieved, etc. over the last 6 months.
  • What could be going better? Highlight any specific areas you are working on, work not accomplished, goals not met, etc. over the last 6 months
  • What are your professional aspirations or goals? Where you are looking to grow in your career.
  • Is there anything else you need from your manager?
  • Anything else you would like to share? (free space)

A Template for a Manager Evaluation:

  • What’s going well? Highlight any specific accomplishments, wins, goals achieved, etc. over the last 6 months.
  • What could be going better? Highlight any specific areas this person is working on, work not accomplished, goals not met, etc. over the last 6 months
  • How would you like to see this person grow? Use this space to highlight any professional development goals or opportunities, as well as any areas they should focus on over the next 6 months.
  • Anything else you would like your employee to know?

It can feel daunting, or maybe even unnecessary when you are a very small company, to implement a performance review process. However, at the end of the day, employees want opportunities to receive and give feedback. People benefit from talking about their growth and development and from dedicated time to stop and reflect on their performance with their manager.

If you approach developing your performance reviews through the lens of supporting your employees, being kind and fair, and laying a strong foundation for a feedback-forward environment, you will be able to create a process that feels authentic to your culture. This will ultimately be helpful to your employees, your managers, and your business.

Hibben Rothschild
Founder and Fractional Head of People at foundHR, and PoepleOps expert
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Hibben Rothschild is an experienced People Operations leader with a track record for building progressive, foundational HR within tech, growth, and high-performing companies. As the founder of foundHR, she scales her impact by working with organizations as a fractional Head of People and as a partner on a project basis.

In her former role as the first Head of People at Source Intelligence, a PE-backed supply chain management company, she led all People Operations for the global business as a member of the executive leadership team. Prior to this, Hibben led People Operations at Jellyvision, a 280-person Healthcare tech company, and PayPal.

Hibben graduated from The George Washington University with a B.A. in Archaeology and B.S. in Biological Anthropology and holds a Professional Human Resource (PHR) certification. She lives in Chicago with her husband and two children. When she’s not solving HR or toddler problems you can find her reading or dreaming of her next trip to Italy.

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