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Ask HN: How are you doing performance appraisal at your startup?
77 points by tmlee on Dec 8, 2016 | hide | past | favorite | 48 comments
Are you with a job at a startup or currently running a startup. Do you do any form of employee performance appraisal? (either once a year or multiple times a year).

What format (top-down, 360 Peer Review) and tools do you use to facilitate that? Has it been effective?

I've seen a bunch of performance assessment systems, most of them being pretty bad.

The worst ones tend to boil down to: "As your manager, here is my subjective view of your performance over the last N months." which essentially rewards high visibility and self promotion rather than actual performance.

Second worst is: "As your manager, here is my subjective view of your performance plus 360 input from peers" which rewards your ability to join cliques and alliances.

Sadly in almost all jobs I've ever had, it was one of the above.

Sometimes the company would throw in a "self assessment," purpose unknown to me, which is likely not even read.

The ideal (in my view) performance assessment would be: "Here are the numeric metrics we agreed N months ago to measure your performance by. The data (collected neutrally and transparently throughout those months) show you met metric 1, 2, and 4, exceeded 3 and 5. Based on the transparent and mutually agreed upon formula, your raise and bonus this year are X and Y". Measurable and objective: Clear goal posts for you to aim for throughout the year. I've never seen this anywhere. I understand some sales roles get something like this.

VCs and shareholders don't come to shareholder meetings and say things like "CEO, I subjectively feel in my heart you are not doing a good job!" No, they look at the company's measurable, numeric results and judge by that. Why should it be any different with employees?

Obviously the hard part is coming up with those metrics so you're rewarding the right behavior and performance, but I'd much rather see companies put effort into coming up with those metrics rather than crafting the world's best self-assessment question or wasting everyone's time on 360s.

Like CEO pay, purely metrics driven performance reviews lead to gaming the metrics. Maybe you wouldn't do it, but how would you feel if your peers were getting better raises and bonuses than you because they file and close more do-nothing bugs, or ship more features because they wrote fewer tests.

This would be a problem with the choice of metrics, and I've already conceded that coming up with the right "un-gameable" metrics is a tough problem indeed.

At Pixar they concluded that all metrics would be gamed eventually. So, they responded by changing up the metrics on a regular basis.

when a metric becomes a target...

My experience as a performance management vendor:

- For very small startups: just talk. A lot, every week at least. Setting metrics is hard until you gain more visibility. If you can though, do it.

- For midsize startups: set goals with clear metrics/achievements (we use OKRs), and still talk a lot (one-on-ones and amongst the team). Metrics are here to set expectations not to be your final rating. If your manager wants to screw you, they'll do it with any system.

- For larger companies: Do as above + add formal appraisals. The appraisal is more about career direction.

This tends to work well because employees find it fair and predictable. And as others mentioned, don't wait 6 months to give feedback. A review shouldn't come as a surprise.

I totally agree with this. Metrics are so very important just as is talking. Don't wait to have discussions talk all the time. Debrief projects what worked, what where the bottlenecks, what they did great what areas did they need to improve on.

Do you think it is possible to find accurate metrics for the performance of creative thought workers like software developers or programmers?

I have a very strong feeling that there are important qualities that are required for both of those jobs that are almost impossible to quantitatively measure. And therefore introducing purely quantitative metrics would actually hurt performance, make employees miserable and make the best of them leave the company.

Most definitely, it would be difficult to come up with metrics for developers that both rewarded the right behavior and were not game-able. The "ideal" I proposed is probably unachievable.

For instance, I once had "customers repeat app usage" as a KPI. This aligned with the company's goals for this mobile app, but resulted in pressure to add "dark patterns" and product features that annoyed people into launching the app. If the metrics are simple and naive, you're going to get employee behavior that has unintended consequences.

That said, I'd still argue that any steps taken to make one's performance goals more transparent and _measurable_ are steps taken in the right direction. If I knew what those magical "right" metrics were, I'd go into business tomorrow an HR consultant.

Things like this is why I dislike anti-discrimination laws, originally designed for manual labor type jobs.

> I've never seen this anywhere.

While I don't run a dev shop (sports science lab instead), we have this as the majority of the reason compensation is increased. Fluency in Spanish, getting certain certifications, passing some tests, etc, all trigger pay level increases, bonuses, and so forth.

Subjective review is part of the game however, and unavoidable entirely.

We also analyze the workforce by free cashflow and percentage of FCF per employee and pay global bonuses based on the needle being moved in the correct direction, which keeps incentives aligned properly RE: expense waste and income generation.

Having a lot of triggers seems to help, in my experience.

Cool! Your setup seems great compared to many places. The only place I've ever seen the practice of directly financially rewarding people who gain education and certifications is in Teaching. Some tech shops will help pay for some of the costs of the education but won't bump your salary for doing it! Profit sharing, equity, and bonuses based on earnings or cashflow are blunt incentives but better than nothing, and far better than relying 100% on subjective.

I should note we pay for all of our employees training fees incurred as a result of getting the certifications. (On top of rewarding them for doing so.)

It seems obvious to do as a business owner, but as you pointed out, I guess it's not that common.

It is just strange to ignore basic incentives/economics. The more you can align the incentives in the same direction, the better result you get. Highly-trained workforces are not fungible. All of this sounds like being "nice" to employees, but in reality it serves the business simply better than the alternatives.

As an employee, those perks annoy me because they promote checking boxes over actual learning. Oftentimes what you really need to learn is not available as a certification (the subject may be too new, or obscure, or only taught in person far away, etc) and you're better off learning by yourself, but then you won't get the same pay raise as your coworker, despite their course being mediocre and barely relevant to their job.

If your training was useful, it'll reflect itself on your work, no? Why do we need to reward it specifically?

This is surely where SMART goal-setting makes sense. As a way to control subjective judgments. It is old practice, but widely and effectively used. (S = Specific, M = Measurable, A = Achievable, R = Relevant, T = Time-bound). A pretty standard metric for larger companies, or any organisation.

And make sure managers and HR departments stand by their metrics.

Avoid, on all counts, what I have in the past seen "We are a quickly growing company, where out goals may change any minute. We cannot possibly have fixed goals or ways to track them or past performance ... Just show me the result" Anyone demanding such is dizzy and unable to steer any direction.

And 360s: They simply do not work otherwise than to give more senior management more transparency from their viewpoint - if they feel the need to use them, they don't feel sufficient transparency and this is what needs to be addressed.

> shareholders don't come to shareholder meetings and say things like "CEO, I subjectively feel in my heart you are not doing a good job!"

They infact do. Smaller shareholders in particular. Shareholder meetings can be quite fun if you're informed and trying to see a small shareholder get an answer to an obscure question.

the purpose of self assessment is so that your manager doesn't need to provide useful feedback, or take any sort of stand whatsoever. You sell yourself and as long as things are ok they stamp it "OK sounds good"

What's the best one you've seen?

Worked one place with a roughly 50/50 split between "subjective manager's opinion" and transparent business KPIs. It was OK. My work partially affected the KPIs so they were sort of fair.

KPIs like "share price" and "revenue" where you as Software Engineer #39 have little effect can be frustrating but at least they're transparent and you can connect the dots between that number and your compensation.

I've been on both ends of the performance appraisal spectrum; from ultra formal annual appraisals to nada.

Each and every time, the biggest predictor of a successful outcome was how well I was prepared. If i could articulate in a concrete, detailed way how much value I'd added.

It's not easy to do this. It takes time and effort to prepare. I used to search old emails, IMs, run user metrics, check old Microsoft Project charts, ask coworkers, reread all appraisals. [Shameless plug incoming] That's one of the reasons i built JobRudder [1] to help me keep track of all that stuff.

One other constant among the decades worth of performance appraisals. They're very messy. Feelings, first impressions, unconscious biases, stereotypes, cliques, politics etc etc etc. It's not particularly data driven or even objective. Be prepared.

[1] https://jobrudder.com

I started keeping a daily list of my accomplishments. I read about this technique somewhere. I haven't seen how it has worked out yet but I think it will help a lot with preparation.

Interesting site. I signed up and will give it a try. Very well done landing page.

Thank you for giving JobRudder a try (and for the kind words).

I'm (obviously) a big believer in achievement/accomplishment tracking. I think it's the best thing anyone can do for their career, outside of the work itself (and doing good work is not enough these days).

I had a streak of bad performance appraisals/interviews going before I started tracking my achievements. It's made a world of difference.

Even if you end up not using JobRudder long term, I'm excited for you. I hope it's as helpful for you as it was for me and others.

PS. If there's anything I can do to make JobRudder work better for you. Please don't hesitate to reach out (email in profile).

TL;DR: If you decide you need a process, keep it very simple. If your company is small, trust that you likely already have a pretty good idea of how any one person is contributing. The faster and larger you grow the less likely this is. Either way, it can often help to make these thoughts and conversations accessible somewhere, especially when you want to recognize someone for their achievements.

In a 20 person company we focus only on 360 Feedback as needed throughout the year and set quarterly Objectives, while having regular 1:1 meetings.

Through our own personal experience, we've learned to keep it as simple as possible. Using only three questions during 360's (What did you do well? What could you improve on? and Is there anything else you would like to mention?) - we show the author of the feedback, but many also keep the author anonymous. It's personal preference, there are pros and cons to both.

Objectives make it easier to align with others and observe your team's progress over time. Regularly updating these saves a lot of energy when providing feedback to others if/when they're asked to provide more formal feedback. If feedback is actionable it's more likely to be useful and the smaller the company the more informal you should make the process. Small teams often already know what needs to improve intuitively, but it can help to record this somewhere so you remain aware of what you're working towards.

Most important though is recognizing and celebrating the successes of your team. It feels good to be appreciated for the work you do and encourages you to do more.

Disclaimer: I'm a developer for Small Improvements, a feedback tool. We work specifically with startups and medium-size businesses.

I don't think 360 feedback is ever really anonymous. I worked for a place that did that, and it was always obvious from the writing style who wrote each comment, since you typically also get emails from the same people.

A possible fix for that is to hire a writing service that rewrites all feedback.

On timing, I like our approach: initially 9 months after joining, then yearly after. A year after joining for your first salary review is too long.

Our strongest tool for performance "reviews" are 1:1s. Weekly/bi-weekly with your direct manager, typically monthly (or more) with your business unit's engineering lead, and about bi-monthly with the head of engineering, though newer engineers have 1:1s with me more often at first [0].

Some of this is covered in our manager's faq [1], specifically about performance reviews, score cards, ranking, etc, and why we think it's utlimately harmful, as it benefits the insitution more than the unique employee.

[0] This is tough to do as engineering groups scale, but critically important.

[1] https://blog.esharesinc.com/a-managers-faq-35858a229f84#.tqb...

+1 to "A year after joining for your first salary review is too long."

We have tick-tock reviews at the end of the year then mid year and people who start in the fall aren't eligible for the end of year. If we didn't have the mid year, I can't imagine the restlessness.

I joined my company on June 1st. At the end of the year, I was told that I performed well and would be getting the typical 2.8% raise, but divided in two because I had only been there six months.

* 360 Peer Reviews in winter and summer

* 1-1 with manager and peer twice a month

* 15five once a week as a mental health check for the employee

It's not a perfect system, and it's ever evolving, but it the best I've experienced so far.

The 360 system is great for highlighting projects and contributions a top-down review might miss, and also gives the coworkers a chance to call out areas for improvement. Employees can game the system by exchanging positive reviews, but that is easy to spot. An honest review with proper critical feedback is valuable to an employee's progression.

The 1-1's work for general sanity checks, but require preparation from the manager to have an impact. Too many managers show up with without preparing and expect the employee to do all the talking. I use 1-1's to discuss career progression, establish SMART goals, and ensure that my report is happy with the work they're doing.

15five is still a relatively new process for us, but the perceived anonymity of a form allows employee's to more direct with their feedback. A report is a great indicator for what to discuss in a 1-1.

> The 360 system is great for highlighting projects and contributions a top-down review might miss, and also gives the coworkers a chance to call out areas for improvement. Employees can game the system by exchanging positive reviews, but that is easy to spot. An honest review with proper critical feedback is valuable to an employee's progression

The 360 review as i understand can be quite a complex flow ie. reviewer nomination, anonymity, ensure everybody answers the review, releasing the questions. Are you using a software for this or straight up google forms or paper?

With these 3 different flows, do you tend to get push backs from teams? How did you overcome that?

We just did a round, very simple: both of the founders sit down with each and every employee individually and ask a couple of questions:

- what was the thing you did last year you have been most proud of - what is the thing you did last year you have been the least proud off - what did we do as a company that you think was great - what did we do as a company that you think was bad

We got great feedback and engagement on these sessions.

Now obviously this wont work if you have a decently sized head count but in our case it worked just fine over the course of a week or so.

I think what you're doing is a great exercise, culturally, but I wouldn't use it to assess anyone's performance objectively.

What happens if you have a great employee who finds it difficult to articulate on these points? Would you have to hear through the grapevine that they were doing great things? What if you have someone who is a poor employee but can talk the talk?

That's a good point - what you'd be evaluating there is how good people are at talking about their performance rather than their actual performance.

A lot of excellent developers I've known (in fact I might say particularly the excellent ones) were rather modest and often rather hard on themselves.

Formal appraisals are a waste of resources in a startup.

Focus on addressing issues as they come up as a team or let them go.

First, I do weekly 1x1s with my directs and give feedback and regularly do career planning in them. You can't wait to have these types of conversations only once or twice a year.

Performance Reviews were definitely not a waste of time and a very important carrot that motivated the company. they were great when things were going well and my startup was growing, but when we started to have churn and laid off half of the company they were less important. They were even less important when we had another round of layoffs after that. I would send very mixed signals at an annual review if I couldn't give anyone a raise and couldn't offer them a way up the corporate ladder, even for top performers. E.g., "You're doing awesome work but all we can do is let you keep your job." Furthermore, equity grants would have been meaningless. I had multiple employees say tell me they didn't think the stock was worth anything, since the odds of an exit had dwindled. Growth had stalled, so they cared purely about salary and career path. I spent a lot of 1x1s talking about what they wanted to do after working for me and helped them plan it out and make progress towards a new goal.

I work for a company that doesn't do performance reviews. Thus, there is little incentive to perform well as nobody will even notice. Everyone just works hard enough to keep their jobs.

Maybe the lack of performance reviews and lack of motivation are probably causatively linked to a wider, underlying issue?

I think it's management that thinks an attaboy can pay a mortgage.

Wow, thats just sad. If the only way employees at your company can get their performance noticed is in a yearly performance review, you need a better job.

It will be noticed (you might get a "good job") just not rewarded in any monetary way as there is no process for that to happen (outside of finding a new job and demanding a raise to stay). The person who has the authority to give me a raise (and I suspect even he'd need approval to do that) lives in another state and I've spoken to him twice.

I'm getting married in a few months. I'm going to look at other jobs when I get back from my honeymoon.

If everyone "working hard enough to keep their jobs" isn't sufficient to enable the company to succeed then there's something wrong with the company.

I wrote software to automate about half my job. I'm certainly not going to tell them about it as it can only result in a loss of income for me and my coworkers. Incentives matter I don't care what the management gurus say.

I'm surprised you're getting downvoted.

Having worked at several well funded startups and mentored or been involved with many more through founder friends around the accelerator in town, I completely agree. Especially at the early stage startups just don't have time for these formalities. Regular 1:1s are pretty much the best option.

There might be a threshold for the number of employees before the formalities kick in? What would that be?

1 on 1 is definitely ideal until you find yourself not being able to spend time with everybody and so are the managers. Even more so when everybody keeps getting more other priorities to work on.

The study below has an adequate analysis and conclusion about politics in performance appraisals:


Politics being "My appraisal is more to achieve an outcome in the self-interest of the person reviewing me, than it is to accurately assess my performance."

Thank you! This study was very informative!

It would seem that the Performance Review is less a measurement to be taken accurately, and more a Tool to be used to subtly move people.

The study you cited provides a useful enumeration of why. And if you read carefully you can begin to see that the perception of the tool is likely to be incorrect. (that of a measurement to be taken accurately).

To quote the end of the study: " The goal then is not to arbitrarily and ruthlessly try to eliminate politics but, instead, to effectively manage the role politics plays in employee appraisal."

We use our own tool internally (https://www.intuo.io/). It works pretty well I'd say. What we do is basically:

* Continuously give each other 360 feedback

* Each manager does a monthly one-on-one with all of their teammembers

* We have quarterly objectives, on a personal, team and company level (using OKRs)

* Apart from that, we do continuous pulse surveys, measuring the happiness and engagement of our people

I really like the 5-word review described here:


Having been on both sides of the review process, this form of review is not as time-sucking for the manager and can elicit good conversation.

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