11 performance management problems in fast-growing companies

Effective performance management is an integral part of the employee lifecycle and is as crucial to organizational success as talent acquisition and retention. Performance management encompasses monitoring and evaluating employee performance, productivity and efficiency. To contribute to organizational growth one needs to constantly improve one’s performance.  

In a fast growing company, time is the most valuable resource.Therefore, the need for having an effective performance management system becomes non-negotiable to measure output levels, both in terms of quantity and quality. Each employee must be able to deliver and improve efficiency to maximize the tight bandwidth. 

However, there are certain performance issues that employees and employers face at work that  make performance management challenging and hinder quick yet sustainable growth.

In this article, we will discuss the top 11 performance issues and obstacles to effective performance management that are common in fast growing companies and how to overcome the same. 

1. Lack of clarity in vision and objectives

One of the first performance issues which prevents effective performance management is a lack of clarity in what needs to be achieved. A vague vision and unclear objectives leads to situations where employees do not know what is expected of them and the leadership is unable to identify parameters to evaluate their performance. Without specific objectives, there will always be an ambiguity in what constitutes effective performance.

Solution for fast growing organizations: 

Start with a clear vision and strong company values. Clearly and regularly communicate them along with long term and short term objectives. It is possible for the vision to be dynamic and change from time to time. In such cases, keep the team members updated on what the organization is progressing towards. Additionally, fast growing organizations must clearly indicate the role of each employee in achieving the vision and objectives to ensure transparency across all levels. When employees know the how and what of their roles, they perform better. 

2. Lack of well-defined work processes

The next employee performance issue that organizations come across is a lack of clarity on how the vision and objectives are to be achieved. This obstacle is especially true for fast growing organizations which lack clear processes and systems to achieve an identified goal. Often, employees have no institutional benchmark for a particular task and hence, face performance issues. 

Solution for fast growing organizations: 

Leaders need to guide team members on how to navigate their way to the end and collectively brainstorm and ideate on the best path. While internal benchmarks might be lacking, fast growing companies can always take inspiration from external benchmarks and processes. Additionally, hypergrowth organizations can give their employees the freedom and autonomy to experiment the best way forward. 

3. No alignment between employee and leadership thinking

Another performance issue is a lack of alignment between employee and leadership thinking. This is again more relevant to fast growing companies, where a dynamism of vision and best practices leads to conflicting views between employees and the leadership. They may have different notions of what constitutes effective performance, and, thus, achieving the same will have different pathways and metrics for evaluation. 

Solution for fast growing organizations: 

Involve employees across the organization in brainstorming and promote shared goal setting. Identify a middle way on what success will look like and how it can be achieved. The best way for fast growing organizations to mitigate this obstacle is by having effective OKRs which communicate the top objectives and associated key results to align expectations across. 

4. Lack of evaluation metrics and tools

Effective performance management and the path to dealing with performance issues requires mapping and measuring performance and productivity. However, most fast growing companies lack metrics and key performance indicators to measure the same. Often, they have an ad hoc approach and understanding of what constitutes good performance, which is neither inspirational nor uniform. 

Solution for fast growing organizations: 

It is important to have specifically defined KPIs and metrics to measure performance effectiveness. It is important to customize the KPIs to specific roles and tasks, instead of simply implementing those that appear on the first page of Google search. Since the work culture of fast growing companies is different from others, the KPIs must be customized and adapted accordingly to suit specific business needs.

5. Shortage of the right talent, skills, and resources

This performance issue is faced by almost all organizations as there is an overall shortage of skilled, qualified talent with the right attitude and work ethic. However, it is more apparent for hyper growth organizations which have financial constraints and limitations on how much they can spend along with a relatively lesser know brand name. Shortage of competent talent and resources leads to inefficiency in performance and other employee performance issues.

Solution for fast growing organizations: 

Despite financial constraints, fast growing companies can deal with shortage of talent and resources by focusing on upskilling existing employees through intensive learning and development opportunities to address organizational needs. 

Furthermore, there needs to be a judicious and strategic approach to hiring and resource utilization based on top organizational priorities. It is a good idea to complement the compensation for employees with other benefits and rewards to attract the top talent as most millennials prefer autonomy, flexibility, and work culture over a fat paycheck. 

6. Inadequate rewards and recognition

Performance issues arise when employees feel their efforts are going unrecognized. Often, in the hustle of growing the businesses and 1000 other things that go on, fast growing organizations miss rewarding, acknowledging, and appreciating everything their employees do, especially when they go the extra mile. Many companies in the growth stage feel the financial limitations prevent them from rewarding exceptional performance. However, this leads to a lack of motivation, resulting in low levels of performance.

Solution for fast growing organizations: 

Focus on showing gratitude to employees for everything they do. Most performance issues can be solved by creating incentives for higher outcomes. Rewards don’t have to be monetarily driven and can simply be Thank You notes, public acknowledgement and appreciation, gift vouchers, an extra day off, etc. The idea is to show that their performance and efforts are being recognized. 

7. Overlooking employee voice and opinion

Employee performance issues are intrinsically linked to overlooking what employees have to say. Most employees who join fast growing companies are driven by their purpose and passion and seek to make a difference. This requires organizations to hear what employees have to say, and when this does not happen, there is a performance disconnect.

Solution for fast growing organizations: 

Focus on gauging employee pulse and opinion by leveraging different platforms. It is important to understand what employees have to say about the culture, factors contributing to performance problems and much more. If employee performance issues are to be addressed to facilitate effective performance management, understanding their side of the story is crucial to uncover the challenges as well as potential solutions. 

8. Lack of leadership commitment

Unless the leadership is committed to addressing performance issues and removing the obstacles to effective performance management, it is very difficult to move the needle. Often, leaders in fast growing companies are occupied with multiple things on their plate and find themselves stretched for time. Invariably, they are unable to understand the causes of performance problems and thus, unable to manage the same.

Solution for fast growing organizations: 

Leaders must set time aside to address employee performance issues and commit to their growth and development. They need to display their commitment by regularly communicating with team members, understanding the challenges, and identifying solutions collaboratively.

9. Inability to provide coaching and mentoring

Coaching and mentoring are integral to effective performance management. Due to lack of mentoring and guidance, employees find themselves lost in the way, leading to performance problems. Leaders and managers find themselves pressed for time and are often unable to see the return on investment with respect to coaching and mentoring. 

Solution for fast growing organizations: 

While companies in the growth stage may not have enough leaders to offer coaching and mentoring support to all their employees, leveraging external partnerships and technology to facilitate personalized 1:1 meetings can be a good option. The idea is to invest in the personal and professional development of employees to encourage and motivate them to bridge the performance gap. 

10. Poor communication and siloed working

Employee performance issues often stem from lack of transparent communication and a siloed approach to working. Adapting to new models of working, especially in the new normal, employees in hybrid organizations find it difficult to communicate with everyone on the team. This leads to miscommunication and prevents everyone from being on the same page. Consequently, these collaboration barriers result in declining performance. 

Solution for fast growing organizations: 

Explore and experiment with unconventional forms of communicating with team members. Have an open door policy and share as much as possible. Promote a clear and transparent communication policy without hierarchies. Greet everyone in the team with a smile and have coffee/ virtual coffee breaks to bond beyond work. Finally, conduct icebreakers and different activities to facilitate communication and collaboration, which fall in your financial constraints, but are also effective and impactful. Using technology to keep employees engaged is often a useful and cost-effective solution.

11. Inability to offer feedback 

Finally, many fast growing companies lack the patience to allow their employees to make mistakes and offer feedback to help them improve. This often results in performance issues or rapid turnover. Either way, it is an obstacle to effective performance management. 

Solution for fast growing organizations: 

Encourage leaders to provide constructive and timely feedback to all their team members to help them learn from their mistakes. Share what team members can improve and also listen to their side of the story. Explain how small changes will not only improve their performance, but add to their professional development in the longer run.

Addressing performance issues: Essential guidance for fast growing organizations

Before we wrap up, here are a few best practices for fast growing organizations to address performance issues and facilitate effective performance management:

• Promote clarity of vision, goals, objectives, roadmap, expectations and anything that employees might have questions about to ensure they understand what they are performing for and why. 
  

• Leverage OKRs or Objectives and Key Results for strategic goal setting to help employees gauge how each objective will manifest itself and where they fall in the picture.
  

• Provide opportunities for growth. Most employees that join fast growing companies are driven not simply by monetary gains, but by a thirst to grow and make a difference.
  

• Have clear performance management metrics to help employees evaluate their performance on their own and offer adequate feedback to address the challenges and performance problems.
  

• Communicate as much as possible. Often lean teams of fast growing organizations work on different tangents, leading to different priorities. Step up the communication game to work like a well oiled machine and improve performance.
  

In addition to these best practices, it is important to collaborate with a platform that helps hyper growth companies create an empowering and high performing culture. Such a platform can help gauge employee pulse, set OKRs, measure performance regularly, facilitate manager development based on employee opinion and industry benchmarks and much more. Effective performance management by leveraging capabilities of an employee experience platform like SuperBeings can go a long way to attract the right talent, facilitate engagement and performance and reduce voluntary turnover.