Performance Reviews for your Startup

Inspiring and challenging teams to ever-improving performance.

Step 1: Choose It

Never assume you “should” conduct a company wide performance review. It can sound like something so basic you’re negligent for not already doing them, yet there are successful teams out there simply giving and receiving acknowledgments, challenges, raises, and promotions organically in conversations between a manager and their direct reports. The camaraderie possible by everyone doing this process simultaneously is surprising when done well, but if you don’t devote the resources to doing it right it’s far better to not do it at all. Consider that it’s always an option to stick with individual reviews in a one-on-one format, on their own natural timing. Introducing unsolicited formal feedback into a company culture can corrode morale quickly if poorly executed.

Step 2: Enroll the Owner

Choose someone to “own” the review process, and it’s sometimes ideal that it not be the obvious choice of top executives like a COO or Director of Operations. Find someone who not only enjoys overseeing processes and is naturally detail-oriented but is also comfortable pestering everyone (including you) to finish writing their reviews on time.

The owner ideally loves what’s possible in a masterful performance review, with first hand experiences both of reviews being totally demoralizing and being empowering.

Step 3: Design It

First familiarize yourself with standard protocols you’re legally bound to review with employees, from harassment to vesting schedules, etc.

Then layer in more personalized inquiries…these are often “rate yourself 1–10” type questions regarding how satisfied they are with their choice to work here, how familiar (and then how confident) they are with company goals and strategy, and how likely they are to be here in a year barring any fundamental changes. Choose the voice of these questions carefully, sometimes less formal will land more authentically, for example in that last question you can give a nudge towards more candid reveals by asking 1–10 “In the past 3 months how likely has it been for you to casually browse for other job opportunities out there”.

Finally, consider a third layer of offering and receiving written subjective assessments of various competencies. This can become a massive energy expenditure if it gets out of hand, but it’s often manageable for each member of the company to receive 3 written critiques: their own self-assessment, a peer-to-peer assessment & an assessment from whomever they directly report to (often these may be at different times in the year to avoid overloading people with too much assessment work). We do peer-to-peer assessments at the end of Q1 and Q3 and self/manager assessments at the end of Q2 and Q4.

These reviews can simply be an invitation to write two pages or less for each person, but I recommend a feedback form with some specific categories to get their wheels turning — “Generous Listening”…when they ask questions, how likely are they to set aside their own biases? “Healthy Humility”…how likely are they to proactively seek advice or feedback “hey how do you think I could’ve done that even better” after a project? “Constructive Ambition”…how likely are they to complain without including either a suggestion or request? These questions should be informed by your explicit Values Statement, and as the review questions evolve so will the values of your company! Oh, and of course leave open spaces for “Anything else positive and/or constructive you’d like this person to know in service of their contributions to this company”. Also, it is best to use a tool to facilitate this process such as Lattice or Small Improvements.

Step 4: Announce It

Announce the logistics of the process of course, but also clarify the spirit of “why we’re doing this at all”. Especially for young teams I recommend pitching it as an experiment in intentionally motivating and challenging each other to higher effectiveness, to elicit everyone’s buy-in. A healthy team with mature individuals is unlikely to have an allergy to hierarchy when it’s sincerely based on competence and results. That said, even if no one takes offense when you suddenly take on an authoritative voice with a super intimate founding team relating to you as their buddy they frequently work until 2am with…you can absolutely earn some eye-rolls, sometimes worse.

Step 5: Deliver It

I’ve seen an entire company begin performance reviews and then as engineering deadlines weren’t met literally have it drift to the back-burner without even officially acknowledging it to the team…this not only had people much less likely to take reviews seriously when they re-launched them six months later, at its worst, it conveyed a lack of conviction around professional growth and even (for the less trusting/more paranoid members of the team) an avoidance of giving out raises, etc.

Assign who is giving peer-to-peer assessments to who, distribute all forms, and regularly remind everyone of deadlines to ensure this really happens! Once all feedback is consolidated, regularly scheduled one-on-one’s are an easy way to review all forms with each member of the company. For an executive team, it’s likely a worthy investment to have an independent mediator/coach help executives digest all feedback in front of the entire leadership body. Put a nice bow on this process, which you invested considerable resources in doing, by taking time at the next scheduled “town hall” type gathering for a high level review of how the process went. Invite shares from anyone who had a highlight moment, as well as suggestions on how to do it better next time, and thank everyone for caring enough about the company and each other to bring rigor and compassion to each other in the ways they did.

A common Step 4.5 is a 90 minute management training on Delivering Potent Performance Reviews, remembering that some managers have never actually facilitated one before. A simple approach is to focus on the balancing act between humility & dignity. On one hand, managers are not asserting ultimate authority on what someone is proficient at, we are all fallible and you want to invite dialog around even your most dire concerns with someone. On the other hand, a manager expressing their concerns about specific events with intensity and passion can be the motivating energy that makes this entire process worth doing for some employees. You can wrap up this particular training with a surprise mock performance review for each manager. You can demonstrate the point of the training by reviewing specific moments in which they seemed to be best participating in those 90 minutes, as well as ways you believe they could’ve been even more model trainees. Complete each with a quick inquiry into how well your assessment fits for them and why!

Find ways to make this process enjoyable every chance you get, and assume this article fails to mention countless steps 1.5, 2.5 and 3.5…hopefully discovering what those steps are for your absolutely unique and ever-evolving organization is another essential part of the ride.

Prime Movers Lab invests in breakthrough scientific startups founded by Prime Movers, the inventors who transform billions of lives. We invest in seed-stage companies reinventing energy, transportation, infrastructure, manufacturing, human augmentation and computing.