Performance
How to manage performance reviews at a fast growth company
Performance reviews, performance appraisals, performance evaluations, or maybe just that-one-stressful-annual-process…whatever you call them, performance reviews can be an effective way to formally assess an employee’s work performance.
For companies that are growing quickly, (say you’ve doubled or tripled in size in a year) having a formalized performance review process is important. Perhaps this means that performance will be assessed more than once-a-year or perhaps it remains an annual review. Whatever you decide, it’s important to ensure managers are involved in and informed of the process so the experience of performance reviews is consistent across your company.
This how-to on managing performance reviews at a fast growth company includes advice from People Leaders who have lived through hypergrowth and managed performance throughout.
What is an employee performance review?
A performance review is a formal evaluation of an employee’s job performance. Reviews typically take place between an employee and their direct report. Reviews can be annual or more frequent. Effective performance reviews can help managers support employees who are struggling, and reward and recognize their high performers.
Stacey Nordwall, Pyn’s Head of Employee Experience, gives this advice when it comes to managing performance through fast-growth, “If you want managers to have development conversations and put time and effort into performance reviews, doing so should be bundled into their own performance reviews and be considered an expectation of all managers.”
Managing a performance review process through hypergrowth
All of the experts we consulted said that evolving your process as you grow and accepting that things will change over time is important to successfully managing performance reviews through hypergrowth. Let’s meet Adriana, Kristen, and Nadia.
Adriana Roche, Chief People Officer at Mural oversaw growth from 150 to 900 employees in two years. She advises that sometimes it’s okay not to have a formal process, because you need to have the fundamentals in place first.
“Do you have clarity on goals, a culture of continuous feedback, managers that know how to coach, a compensation philosophy and how it ties to performance?
Big and heavy formal performance reviews take time and effort - when you're growing quickly, this might not be something you have the luxury or energy to do. It's better to find an agile way to do smaller ones. At MURAL, we do quarterly reflections where we hold managers accountable to have a lightweight feedback and coaching conversation,” she explains.
Kristen Sinch VP of People at Wild Earth saw the company double in size in one year. Introducing a formal review process at 15 employees, she says, “It's important to get feedback on the process every time and continue to evolve as the team grows.”
Nadia Vatalidis, VP of People at Remote has seen the company grow from 70 to 1000 people over the last 18 months. Their company has two formal performance reviews a year, one in Q2 and one in Q4, with smaller reviews in the off quarters.
“It’s very hard for new managers to keep up with this pace, but it's vitally important that we have very well documented reviews and provide regular feedback to folks,” she says.
Nadia’s advice is to remain open to change and create a process that is sustainable and efficient for your company. Let’s review some of the main questions high growth companies will have to answer when creating a performance review process.
How do you decide what should be assessed in performance reviews?
What defines high performance can vary from company to company. What your company decides to assess in performance reviews can be based on core competencies by role, tied to company goals or values, based on industry benchmarks, and more.
During the first go at performance reviews at MURAL, says Adriana, employees were assessed based on accomplishments and impact as well as how they represented company values and helped build the company.
At Remote, there are a few core questions each review is trying to answer:
- How is this person performing in the role they were hired in?
- How are they aligning to Remote's values?
- How are they contributing to the team they are in?
You can read more about Remote’s employee performance review process on their public Notion page that is updated regularly.
How often should you review employee performance?
Setting the cadence of employee performance reviews is a choose-your-own-adventure decision. That said, all of the high-growth companies we interviewed have some form of performance review more than once-a-year.
Whatever you decide, consistency in timing and communication is key so that everyone, managers and employees, feel prepared for the process.
Some companies, like Remote and MURAL review more frequently with somewhat less intensive processes. MURAL reviews four times a year, however, says Adriana, “It's very light weight. We want to encourage continuous feedback but it's not a heavy thing with ratings etc.”
Remote’s bi-annual reviews are complemented with lightweight check-ins in between. “We wanted to ensure feedback is very well documented and therefore have two major Performance reviews a year, Q2 and Q4, and two smaller pulse type reviews in Q3 and Q1. The pulse reviews are mostly written feedback, but aiming that this should take less than 2min to complete per person that you review,” says Nadia.
At Wild Earth, reviews take place every six months. Kristen explains, “The annual review is a 360 which includes peer reviews, so it is more time intensive. The mid-year check in is a modified version that does not include peer reviews. Our culture is very fast-paced and we found this structure is very useful for managers to slow down to reflect and get in the habit of providing positive and constructive feedback.
How long should you plan for your performance review cycle?
All of our experts said their formal performance review cycles take 2-3 weeks from start to finish.
Should you link compensation to performance reviews?
Along with how often you should review, whether or not you should link compensation to performance is another long standing debate for companies and their People Teams. Our experts agreed that you should link compensation and performance, but that having more than one performance review can help people be more open to feedback throughout the year.
“You need to link performance to compensation - I don't see how you can get away from it,” says Adriana, “It's the formulaic link that can sometimes be tough. If it's ONE review that ties you to comp changes, people tend to be not as receptive to the feedback and the coaching that can come from it.”
How will you structure your performance reviews?
Our experts were split on how to structure performance reviews. It’s another decision that comes down to what is best for your company in its specific circumstances. Many companies ask employees to complete a self evaluation (an individual's assessment of their own performance) or a 360 review (when individuals provide feedback to their colleagues and manager) around performance reviews time as well.
Formats used were OKR, Check-in, and company-wide goals and per Vertical sub goals. Learn about different types of performance review structure below.
Different types of performance review structure
- The Google Approach: OKR reviews, self evaluation, rating calibration, manager reviews, lengthy
- The Madlibs approach: Filling in the blanks but pre-structuring the script
- The check-in approach: Brief reviews, quantitative and short descriptions
- The growth approach: Very much a development conversation structure. Emphasis on "not yet."
- The anniversary approach: Reviews are based on the last review date, so managers are constantly reviewing a person, but never their whole team at once. Challenge: calibration
- The Graph approach: 2D plotting of performance (performance/potential axis) to steer conversation, maintain calibration (and to steer it away from performance rating number)
Should you use performance review/management software?
Our experts use either Lattice or PerformYard (both come recommended), and other solutions like Culture Amp, Reflektive, and BambooHR are available as well. A software review site like Capterra can help you decide what solution is best for you based on budget and other factors.
How should managers be prepared for performance reviews?
Managers are an integral part of your performance review process. In order for managers to give employees a positive performance review experience, they need to be set up for success.
Kristen says an ideal situation is one in which an employee is not surprised by the evaluation they are given during a performance review. Meaning, if an employee is underperforming, overperforming, or somewhere in the middle, they should already know where they stand come formal review time because of ongoing open communication and consistent feedback.
For managers, Adriana gives this advice, “Always give feedback, think about coaching, think about values, think about your biases.”
Nadia adds that it’s important for managers to have clear documentation on the review process and the outcome of the review or rating as well. “I've often seen managers in start-up environments shy away from constructive feedback and tend to focus on the positive. However, the quicker areas of growth or under performance are addressed, the better each individual will perform in the role they were hired in, she adds."
How should employees be prepared for performance reviews?
Employees may be excited, anxious, ambivalent, or a whole host of other emotions when it comes time for performance reviews. How you as an HR or People Team communicate, as well as managers, sets the tone for your performance review process.
If there is feedback that your employees will be asked for, ensure they know about it ahead of time. At Remote, employees share feedback about their managers during the review process. Nadia explains, “We have not implemented 360 reviews yet, but even this one review is vital for the Manager to also continue to develop and grow in their role and in the team.”
At Wild Earth, reviews are also a time for employees to give feedback to their managers. Kristen also recommends that employees highlight key accomplishments and bring self-awareness to the review of the areas they are not as strong in. Employees should be thinking about how they want to develop and where they see themselves growing.
Adriana’s advice is for employees to track their impact and keep a “brag list” of accomplishments. Ask for feedback along the way to be proactive about performance.