The term ‘performance management’ has seen many evolutions over the years in the corporate world, but what does it actually mean? And how applicable is it as a one-size-fits-all model, especially in a new world filled with start-ups and non-traditional work environments?
These are two complex questions, so let’s take them one at a time.
The role of performance management
Feedback is the lifeblood of performance. It sounds straightforward. You tell employees how they can improve based on what you (and others) have observed, and voila. Change is there.
That’s the simple scenario but rarely is it the case. The meaning of performance management itself is based on several components:
These can be complicated individually, and together, even more. You could be seeing certain behaviour that are keeping employees behind, like procrastination. Or there might be projects where a team member wasn’t performing well. They might be missing certain skill sets that are keeping them from progressing. A simple change could help evolve in their position and equip them with knowledge on how to improve and progress within the team.
However, taking all of these disparate pieces and trying to cobble them together is difficult. Which is why performance management has seen a lot of shifts. How do you address all of these things effectively, and with impact? Ideally, you would be able to talk to colleagues right then and there, as soon as you spot whatever it is that needs fixing…but that doesn’t happen. By the time feedback is delivered, that moment is long gone so it takes more time to see a change.
In an earlier post, We wrote about the diminishing role of management and there’s a particular phrase that bears repeating:
We have all heard the cliche, “don’t measure a fish by its ability to climb a tree”. Yet, we implement this cliche with religious zeal through performance management systems, every year, around the world.
Rather than making feedback, and thereby broader performance management more individualized, it becomes standardized. This version of performance management doesn’t end up working for employees. But recognizing their individual strengths and weaknesses does. It’s about showing employees, in real time, about what’s going well and what isn’t. For feedback to be effective, it needs to be timely and tailored.
Examining startups in this context
Taking on the second question, performance management takes on more importance in the context of startups, for a variety of reasons.
Startups function differently from conventional corporations as they are made up of smaller teams of talented (and often young) professionals. Within these teams, management experience itself can be varied in these settings, which makes employee feedback and morale that much more critical.
Sometimes younger team members might be put in a management setting they are unfamiliar with (and therefore struggle with delivering employee feedback) or might be managing employees with more experience. Or there might be more experienced senior managers who struggle with the start-up setting and delivering feedback in a more meaningful way since they are more used to different performance management methods.
In either scenario, I think the role of ongoing feedback takes on more importance because it is experience-agnostic. Rather than adhering to older, stolid ways of feedback, there needs to be a shift in thinking.
There is more focus on multiple milestones rather than big accomplishments. By rewarding their employees for making incremental progress, they can nudge them towards the overall goal and encourage them to ‘level up’ at every step of the way. This form of structuring and delivering feedback is beneficial, both for employees and management teams.
By utilizing this interactive (and rather fair) form of appraisal (constant feedback), managers can benefit from a less time consuming and more cost-effective way to manage employees. It becomes a collaborative process between employee and employer, and it sets up expectations well. Either employer/manager or both employee and employer can begin setting up objectives and goals for the employee, which can, in turn, help him/her perform better. This is due to the fact that it lets employees know the goals they need to reach as well as the quality and quantity needed to achieve them.
It is also worth noting that, if both employee and employer decide on objectives together, the probability of meeting those goals can be much higher.
So what difference does ongoing feedback make?
Simple, because feedback involves two parties: employee and employer. Rather than siloing feedback, this allows smaller teams to grow together. Remember that earlier phrase about not teaching fish to climb trees? It applies here. This form of appraisal opens up the process into a dialogue and a real conversation. Instead of expecting employees to adhere to the same standards, treating them as individuals opens up a new realm of professional development that has true impact.
While it might seem daunting to start a system of ongoing feedback, I can tell you firsthand, the individual employee approach works. I’ve seen it time and time again in different circumstances, and for start-ups, in particular, this form of performance management is far more effective and meaningful – both for employees and employers.
Is your startup struggling with delivering feedback that provides real value for employees? Our Feedback module can help. We’ve created a simple system that allows co-workers to receive and provide timely help by sharing development insights. By linking it directly to a project, skillset or behaviour, feedback can have a real tangible impact on professional development. Learn more here.