5 Performance Appraisal Methods for Startups & SMEs
Most of the organizations experiment with traditional and modern methods of performance appraisal methods, whereas many startups and SMEs do not have a proper guide to set up a performance management system for their closely-knit teams. The performance appraisal system helps a company to grow and provide opportunities for the employees to learn and develop.
The startups and SMEs are not process-driven, but results-driven. They set dynamic goals and expect immediate results out of it. They are open to ideas when it comes to talent management as they must retain smarter talents to develop their business. But there are very few articles pertaining to the performance appraisal process for startups and SMEs. So, the companies lack the direction to implement a trailblazing appraisal process.
The performance appraisal process is a system that never halts and should be given importance throughout the year. The goal to generate revenue always puts startups and SMEs in a tight spot that the companies look for an effective performance management system rather than creating one.
These 5 simple performance appraisal methods will help startups and SMEs to be on track of development.
Goal Setting and Performance Appraisal are Two Different Processes
Performance appraisal meetings are for discussing the performance of employees. The meetings help employees to learn their strengths and weaknesses. Separate meetings should be held for goal setting. The development and growth of an employee should be the primary focus of the performance review process.
Frequency of Process Decides the Motivation of Employees
The performance appraisal process should take place at least every three months. An organization may not conduct the performance appraisal process often, but a startup or an SME should conduct it very often to keep the employees motivated. The employees may easily lose interest when they do not know about their contribution to the company and where they stand in their performance.
360 Degree Feedback Promotes Culture of Openness
360 degree feedback empowers employees. Employees share feedback on their immediate superiors and the company. They also receive feedback from their managers, peers, and clients. Peer feedback allows an employee to know about his/her strengths and weaknesses better.
360 degree feedback paves way for self-awareness too. An employee can rate self and share observations on his/her performance.
Repudiate “Everyone Fits the Same Mold;” Inherit “Personalization”
Personalization will be one of the most important factors in performance management. In startups and SMEs, the employees know about each other and communicate very well as their company size is smaller. But using personalization as a parameter in a formal scenario such as the performance appraisal process requires effort and correct approach.
Giving importance to an individual employee brings the best out of the employee and increases productivity within a short period. Understanding the needs of the employee helps a startup to provide the required training to that employee and focus on his/her development.
Employee Engagement Retains Talent and Increases Productivity
Startups and SMEs should focus more on work-life balance to retain talent. If there is no balance between personal and professional lives, employees tend to lose interest in the work. This may lead to an increase in employee turnover and decreased productivity. People-centric culture, employee-friendly benefits, and employees’ wellness should be given importance and considered as key factors for talent management.
For a company of a smaller workforce, these approaches are the primary steps toward an effective performance appraisal system. Talent production and management should not be taken lightly by startups and SMEs as those talents decide the future of the company.