Startup Employee Performance Appraisal

A Startup employee performance appraisal is not given the importance it deserves. Startups may be by a single individual or a team of 2-3 partners. The focus of any startup in the initial phase is to test the idea for market acceptance and gain traction.

A startup with 2-3 partners may not hire any employee till they reach a particular sales volume or they feel confident about generating revenue. The various jobs may be divided among the partners. 

A solopreneur may have a very small team of 2-3 employees who may join right from the beginning. They work very closely and the owner interacts almost on a daily (hourly?) basis. The employees may generate leads and the owner may close the deals. This closeness may lead to the belief that there is no need to have any formal system or process for performance appraisal. This honest wrong belief is likely to result in dissatisfaction, when the time comes to reward employees or as the organization grows and owner’s interaction level comes down due work pressure.

Image Source: Stuart Miles

Startup Employee Performance Appraisal- Definition

Performance appraisal is a systematic process that evaluates an individual employee’s performance in terms of his productivity with respect to the pre-determined set of objectives.

Startup Employee Performance Appraisal- Objectives

This gives the employee an opportunity to reflect on the duties that were entrusted to him, as it involves receiving feedback regarding his performance. It also evaluates the individual’s attitude, personality, behavior and stability in his job profile. There are various applications of appraisals like compensation, performance improvement, promotion, termination, test validation, and much more. Various performance appraisal methods are followed by organizations to ensure fair appraisals to their employees. Appraisals facilitate communication between the management and the employees, which helps in conveying the expectations of the management to the employee and vice versa. In case of startups, it has been observed that shorter cycles are preferred, so that they can motivate their employees more frequently, to perform better. It can be quarterly/half yearly /annual.

Startup Employee Performance Appraisal- Target

SMART is a best practice framework for setting goals.  A SMART goal should 

be specific, measurable, achievable, realistic and time-bound.

Startup Employee Performance Appraisal- Parameters

The twin aspects of measurements are ability to achieve targets and soft skills. The targets can be set and easily measured. However, having a committed employee is critical. The following seven parameters will help in developing a committed team. The review can be done monthly in the beginning and after about a year this can be done quarterly.

The goals can be set for the entire team and the individual’s soft skills should also be measured

Soft Skills

1.      Attitude/Effort:

  Amount of effort that the employee puts into their duties, and the extent to which he maintains a positive work attitude while performing these duties.      

        Poor                                                   Moderate                                             Excellent

            1                         2                               3                           4                             5

Fails to meet deadlines                                                           Meets deadlines or is early

Refuses to take on extra duties                                               Team player/assists others

Must be told what to do                                                          Self-starter

When own work is done, does nothing                                  When own work is done, asks for more

Complains about job duties                                                    Takes initiative

                                                                                                Enthusiastic about job


 2.      Works Independently 

The ability to work conscientiously to complete tasks with minimum supervision.


         Poor                                                  Moderate                                             Excellent

            1                         2                               3                           4                             5                  

Fails to Meet expected work output                                                         Completes assignments on time                                                                     

Incomplete tasks                                                                                         Tasks are fully completed

Needs constant supervision/help                                                              Works well independently



3. Adaptability.


Poor                                               Moderate                                             Excellent

            1                         2                               3                           4                             5

Cannot accept criticism                                                                           Willingly accepts criticism and

Does not respond to feedback                                                                  modifies behavior/task accordingly

Resists change to work duties                                                                    Willingly accommodates new



4.. Interpersonal Skills:  Degree to which an employee gets along with others (co-workers, supervisor, clients).


Poor                                               Moderate                                             Excellent

            1                         2                               3                           4                             5

Ineffective on work-team                                                        Maintains effective and cooperative

Receives complaints                                                               relationships with co-workers

Avoids working with others                                                   Initiates interactions with others

                                                                                                No complaints/receives compliments




5. Verbal CommunicationThe ability to communicate orally.


Poor                                               Moderate                                             Excellent

            1                         2                               3                           4                             5

Poor/ineffective verbal skills                                                              Excellent verbal skills

Lack of eye contact                                                                            Clear voice


6. Reliability:  Extent to which the employee can be counted on to be in attendance and complete tasks in a timely fashion.


         Poor                                                  Moderate                                             Excellent

            1                         2                               3                           4                             5

Chronically late for work                                                             Arrives on time or early

Fails to show up for work                                                             Rarely absent

                                                                                                      Absence planned/non-disruptive


7. Ability to learnThe extent to which the employee is able to understand/grasp new ideas & instructions.


Poor                                               Moderate                                             Excellent

            1                         2                               3                           4                             5

Not interested in learning new tasks                                       Actively seeks out information

Has not improved in job performance                                    Continually improves in job performance 

A score of thirty is excellent and employees who score less than 20 in two consecutive

reviews to be counselled. If these employees do not show improvement   they are

required to leave.

How do I even begin performance reviews at a startup?

To quote One-Minute Manager, “Rather than catch people doing something wrong, it’s most important to catch your teammate doing something right!” So we improved it, and on day one of that change, 50% of people gave positive spot feedback. It immediately elevated our morale with a sense of celebration!

Startup Employee Performance Appraisal- Conclusion

Managing performance is absolutely critical. In large companies, under performers may disrupt goal attainment for their specific areas. But in a startup, an under performer could throw the entire company off track. Managing employee performance appraisal may appear challenging. The startup the entrepreneurs should devote time   for performance appraisal and feed back to employees