December 29, 2019 0 Comment

5 Tips for Effective Performance Management in Start-ups

For most start-ups, their initial years are both exciting and overwhelming like roller-coaster rides. The lack of effective performance management in start-ups can actually prove detrimental to the continued progress of the venture. With a seemingly unending list of tasks, all of which seem to be of great importance for business growth, start-ups tend to lose focus of their most important asset, namely their employees.

After all, it is the people, their efforts and their commitment that ensures the growth and profitability of the venture. However, with the rapidly changing metrics and the frequent addition of new responsibilities and goals, the process of tracking employee performance generally takes a backseat.

Challenges of Performance Management in Start-ups

Managing employee performance in a start-up environment is often quite challenging. With most employees handling multiple and changing responsibilities, setting clear performance objectives for individual employees becomes really difficult. Having said this, managing and measuring employee performance is absolutely critical for start-ups as it helps them monitor the extent to which the organizational strategies are being executed by its employees.

This can result in inspiring greater employee engagement besides cultivating a work environment that drives increased focus and productivity. For this, start-ups need to work towards setting up a scientifically defined performance management process from day one or at least as early as possible.

It will ensure greater clarity in roles, deliverables, and expectations, besides avoiding errors and omissions during the execution of business plans.

How to Create an Effective Performance Management System in a Start-up?

Performance management is an ever-evolving process and it is important for organizations to integrate certain key aspects in the process to ensure the best results.

Discussed below are a few effective points that can help start-ups develop a truly effective performance management process for ensuring enhanced employee engagement and motivation:

1. Understanding the intent

Start-ups should have a clear understanding of the intent behind developing performance management processes. They need to develop systems that are able to better assess the performance of employees with respect to the needs of the business.

In addition, it also empowers the managers and supervisors to guide the employees in the right direction and ensure their maximum contribution towards business growth. A process developed with a clear understanding of intent assures the employees that it can help them succeed.

Moreover, it enables the employees to treat their managers as their coaches who can guide them rather than auditors, who are there only to evaluate them.

2. Establish smart goals

The setting of performance objectives should be based on the employees having a clear understanding of what is expected of them and the measures that will be used to determine the successful completion of these goals.

The goal-setting should be SMART, which means that it should be:

• Specific – Should clearly define who and what of the goals

• Measurable – Should define quantifiable targets

• Attainable – Should be challenging enough without being unrealistic

• Realistic– Should be achievable given the available resources

• Time-Based – Should have a well-defined time limit for easy tracking

However, it is important for start-ups to ensure that the process is flexible enough to work effectively in the dynamic business environment in which they are operating.

3. Invest in employee recognition programs

Having effective employee appreciation and recognition programs in place can help enhance the efficiency of performance assessment and management systems quite significantly. By recognizing and rewarding the efforts and achievements of their employees, start-ups can drive both engagement and performance continuously.

Contrary to popular belief, most startup employees are well aware of the limited resources with which the organization is operating and feel satisfied even upon receiving a simple note of thanks or a word of praise from their superiors. These simple initiatives can positively impact employee performance and engagement.

4. Giving and seeking regular feedback

Providing regular feedback to employees and receiving the same from them can help in developing a more transparent performance assessment and management process. Regular feedback from their superiors can help in personal and professional growth and development of the employees.

At the same time giving feedback to their superiors provides them with an opportunity to express their opinions and ideas for the timely achievement of business goals. Two-way feedback can also help reinforce positive behavior and build a work culture based on mutual cooperation and coordination.

5. Ensure proper documentation

Documenting the various aspects of performance appraisal adds to the credibility of the process and makes it more acceptable for the employees. In addition, proper documentation also makes it easier for start-ups to monitor larger trends in employee performance over a given time period.

At the same time, it enables start-ups managers to track and communicate performance changes and developmental needs over time. Even though documentation might seem like an administrative overhead, it is necessary for ensuring greater effectiveness of the performance management process.


Developing an efficient performance management process keeping the above tips in mind can help start-ups set clear direction, build greater commitment and higher levels of performance from employees.

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HiFives ( is an employee rewards, recognition and engagement SaaS platform that enables organizations to digitize, automate and transform their employee experience. The platform enables supervisors and co-workers to nominate, recognize and reward employees using a points-based system. Budget management, jury-based evaluation and multi-level approval workflows are built into the platform. HiFives has social features such as a wall of fame and gamification features such as leaderboards, e-certificates and digital badges. It also has a global redemption system with country-specific e-gift card options. HiFives integrates with all leading HRMS systems, Office 365, Google Workspace, MS Teams, Slack and other popular tools used at the workplace. HiFives is used by many large enterprises, small businesses and startups across 25+ countries in the world, in many industries including manufacturing, retail, technology, financial services and media.