Traditional performance management reviews and processes take a lot of time while producing little positive impact. Legacy annual review processes look backward instead of forward. As a growing startup, you need to ensure every second can be spent with intention.
That means scaling your performance management processes to solve problems as they occur. While scaling up your human resources processes can be challenging, it also presents opportunities to take a strategic approach to your company culture and employer brand.
With your first round of funding in hand, it’s time to scale strategically. You need to implement performance management processes that align with your overall business strategy and drive business results.
Here’s how to enable performance as you scale your startup.
Prepare for Common HR Challenges in High-Growth Companies
A growing startup may face a very big HR challenge: not yet having an HR team at all. Many startups rely on outsourced HR to handle payroll and other transactional aspects of HR management. Before scaling up your HR processes, it’s best to hire an HR leader or work with a strategic HR business partner. Be cautious of scaling your startup without investing in a long-term HR strategy.
Being strategic with your people decisions during the early stages of your growth will enable you to scale the business up faster and with less risk. Be intentional about people processes, such as performance management, after your first round of funding and empower yourself to develop a talent strategy aligned with your business strategy.
Don’t leave the HR function and decisions entirely up to others. Leadership needs to be involved in making HR process decisions, especially around day-to-day performance management. Consult with a strategic HR representative, such as an internal CHRO or an external business partner, regarding best practices for scaling people management at your organization.
Building a High-Performance Company Culture
Scaling your startup’s talent strategy has to start with the overall business strategy. Look at your 3-5 year plan. What are the top business’s top 3 priorities for the next few years? What are your business priorities for this quarter?
A strategic HR partner can advise you on what policies, programs, and training you need to implement to make sure you have the talent to support your goals.
Your talent strategy impacts every aspect of people management, including big picture items like company culture and employer brand. Your company culture is the foundation of your brand, so it’s essential to be strategic as you grow.
Prior to receiving your first round of funding, your culture might have come from the interactions of just a few people. As you add to the team, your culture will evolve. This does not mean the culture will spiral out of control, provided you take steps to shape how it develops.
Ironically, one of the best ways to get the desired culture is by selectively giving up some of your control. In a high-performance culture, employees are empowered to set their own goals. They’re given the freedom to move the business forward in ways that align with their specific skills and interests. Implementing a performance enablement model can help achieve a high-performance company culture.
Successfully Scaling Performance Management
As you scale your startup and design your company’s long-term culture, you can’t rely on unguided, informal performance management. Without structure and set expectations, performance management conversations may not happen. Even if they do occur, they likely will not be deliberate or directed enough to be particularly useful.
Scaling performance management up requires a strategic framework, like OKRs. OKRs are aligned with your overall strategy but allow employees to determine how they can support organizational priorities most effectively.
OKRs also help set cultural norms for communication and transparency. Using an OKR framework forces you to be explicit with your company strategy and communicate high-level business decisions across the company. This gives employees a greater sense of purpose and ownership over their performance outcomes.
Enabling Performance at Your Small Business
Performance enablement goes beyond performance management. It means giving employees the resources and ability to take greater ownership of their performance. You have to make it clear you want to hear new ideas and innovations regarding products and services. Employees must know it’s okay to try something new and fail at it, so long as they learn from their mistakes.
In a performance enablement model, managers function as coaches to help their reports understand company goals. The coaching process helps them determine where they can have the biggest impact on business results. Performance enablement, built on an OKR framework, aligns managers and employees with their greater purpose in the company so that employees learn to think strategically.
Empowering Employee Engagement Through Goal Setting
In addition to scaling and improving performance, an OKR framework drives employee engagement. In a startup, it’s easier for individual team members to see the role they play in supporting the company and moving the business forward. Use that clear sense of purpose to drive employee engagement.
By allowing employees to set their own goals, they determine how they can best support the business. This creates a sense of responsibility and investment that results in higher engagement and ultimately supports retention.
When a company scales up, it can be a time when carefully laid plans come to fruition … or the moment everyone discovers seemingly solid foundations are actually a little shaky. As your company scales up, take the time to implement strategic performance enablement processes. Set the tone now for a high-performance company culture moving forward.