While in the initial years, startup companies mostly focus on their product, service, and finance; they tend to ignore the criticality of having a performance management system in place. Performance management is an integrated business management process that helps an organization to monitor the extent to which its employees are executing the defined strategic goals.
The phase of defining goals in startup companies can be a flexible one, in the sense that employees may adjust in accordance with changes in organizational priorities and be comfortable in pursuing multi-tasking activities when the situation demands.
Performance management process is important in startups because a clearly marked appraisal and management process ensures that the small multi-tasking team keeps in line with the defined direction and provides increased focus for performance. Also, a well-documented performance data will be very useful for continual tracking of employee progress and to review the ongoing achievement.