Working in a high-growth environment? If so, you are most likely no stranger to chaos. With priorities, strategy, goals, and tasks changing at an accelerated pace, clear frameworks and structures need to be implemented to remedy the mayhem. From an HR perspective, this is particularly crucial to retain employees and give teams a sense of security in the midst of constant change. Keep reading to find out more about the frameworks and structures which can secure a great culture, where you have employees thrive and perform despite ever-changing circumstances.
The Need for HR Frameworks and Measures Within the Start-Up Environment
Within the start-up space, roles, projects, and tasks are subject to constant change. Although change is an inescapable part of any organization’s makeup, the rate and fluctuation of change at start-ups is particularly fast-paced. That’s where aggressive prioritization comes into play. The advent of pulse surveys and eNPS (Employee Net Promoter Scores) can guide HR professionals and management on important areas to focus their time, attention and efforts on.
Within the context of long term strategic planning, having a solid HR framework and structures in place is also crucial. Naturally, as an organization grows and people have been there longer, a question that people always ask is: ‘’What does my future look like here, how can I learn and grow and develop further in this company?’’ Therefore, building robust career development plans and career development ladders are crucial. Solidifying career development as part of a clear and equitable framework is critical. First, it helps each individual understand how they can get promoted and grow in the company. Secondly, in the case where you have a team of ten people and five of those people want to be promoted to management level, but only one manager role is available, having a clear framework in place ensures fairness.
Sometimes career paths and promotions can be tangible, such as sales roles: there are very clear outputs, you can tell who's doing well, and who isn't doing well - and can promote individuals accordingly. Other roles are not so simple. Let’s take the example of software engineering: how do you determine who is ‘’good’’ and who is ‘’bad’’? There's technical competence and output and some markers such as code, but generally output is quite intangible. Determining fairness within promotion can be a tricky hurdle in any kind of startup, because things change so fast, but you need to do your best to make your processes transparent and fair.
Effective HR Frameworks To Implement Within A Start-up Environment
A luxury of being a bigger, more-established organization is that HR and management has had time to see what is working within the context of the culture, the values, and the team structure. For new start-ups that do not have this luxury, it’s useful to implement frameworks to help with acquisition, onboarding, and retention to determine what will work. Here are some frameworks and models that I have found incredible helpful and implemented in my journey working as head of People and Culture in several fast-growing startups:
- Define frameworks from the get-go: Within any growth company, a constant battle of figuring out what to prioritize generally takes place, and a kind of ‘’organized chaos’’ can become the norm. Therefore, if you don't build the hiring frameworks early, trying to build anything else later on is going to be hard because you won’t have a set standard, or you don't have a framework or a mechanism for deciding on what to define as ‘’good’’ and a desired standard. One such framework was understanding why our best people were our best people by using a Five Factor Model. We saw clear correlation between high performing individuals scoring high in factors such as consciousness and openness. This allowed us to approach hiring from a Trait centric approach as opposed to a ‘’Past Experience’’ approach. It broadened the hiring pool we could 'fish' from and completely changed how we perceived good talent. I’ll discuss how to implement psychometric assessments in the following section.
- Implement psychometric assessments, such as the Big Five or Ocean Model to find the right job fit: The five broad personality traits described by the Big Five are extraversion, agreeableness, openness, conscientiousness, and neuroticism. An individual’s percentage score can be analyzed to decipher their suitability for a particular job role. For example, a person who ranks high on extraversion may be suited to an outward-facing position such as sales or customer success, whereas a person who ranks high on openness (which is correlated with creativity), may be suited to a role in marketing or design. At Proper, I used this model to try to understand the correlation between individuals’ personality traits and its predictive capability on job performance. When recruiting sales employees, we would target people with high degrees of conscientiousness and openness, and we’ve seen correlations between high performers and high scores in these personality traits.
- Define company values from the founders’ perspectives: While it’s important to focus on company culture, the term culture can be a blanket term that gets thrown around, especially in the startup world, where you see companies use it as a buzzword, without defining its meaning. Defying cultures comes from the values. The values are the bedrock and the culture shifts constantly when you keep growing or adding or changing. Therefore, it's about defining company values and it needs to have come from the founders. While some companies get a third party to help, or even have the HR department to help build out the values, founders are usually the only constant presence in a business. This does not mean that HR or an external consultant cannot help facilitate the process (in fact, they might be needed to get the best result), but the founders need to be there to help articulate the values, including behavior connected to the values (do’s and don'ts).
- Have values reflect the company, not the latest trends: Sometimes founders try to be ‘’in vogue’’ with their values and it doesn't really reflect the people that they are or the company as it is led, which leads to a huge mismatch. For example, if the founders are quite introverted and very shy by nature, but the company promotes a culture of partying and ping pong tables, there will be an inevitable clash. It's important to focus on who you are as a business, and what the founders stand for. Then the company can hire people that reflect those values and ensure that new hires are the right cultural fit for the company.
- Define company culture - but get the balance right: Defining company culture is important, but it’s also important to remember that not everyone is going to fit in the culture perfectly - and that’s okay. The more rigid your company culture is, the more people may actually be turned away from it. It can turn into a strange mismatch of: ‘’culture should promote individuality and bring people together’’. Instead of defining a rigid company culture, let your values define your culture - whilst also allowing employees to bring their own individuality and sense of self to the workplace.
- Define a compensation framework: Defining how people get paid and why they get paid that particular salary, is an important framework to establish right away. Salary is going to end up becoming a contentious issue for employees if they feel as if they are not being compensated fairly, or if an employee in the same position is making more money than them. Startups with large salary disparities create huge problems in the long run. Although start-ups should not pay for expensive salary data, having a consistency model at the very least is a good starting point. Here are some principles I used to define a compensation framework:
- Align with market: If your compensations are aligned with market, then no one should be below market range (give them a raise before they quit), and no one should be above replacement cost (then they should be replaced). A good offer acceptance rate is in the 70-80% range—too low, and you might be underpaying, too high, and you might be overpaying. If you make a lot of offers, you should develop a pretty good understanding of the market from making offers and learning about what other companies are offering. There are also datasets such as Radford, which you have to pay for, and levels.fyi, which is a free database of self-reported salaries.
- Create consistency: A useful Litmus test to measure consistency is: if all salaries were made fully transparent, would people be upset? If so, you might have an inconsistency problem that needs to be addressed.
- Other types of compensation: There's of course many other things that constitute the total compensation, so let's also consider base salary, bonus, equity, and sign-on bonus.
- Craft a well-written employee handbook: Onboarding is an important part of the retention process, and how it’s approached will leave a lasting impression on employees. An employee handbook is a great communication tool in which you can tell people: this is what we believe in, this is how we operate, and here’s what to expect.
How to Help Founders understand the importance of HR Frameworks and Measures
Often, HR is subject to pushback from founders when introducing new HR frameworks and measures. Founders sometimes forget that they are learning and developing as well, and that they will benefit from frameworks just as much as the employees will. In one particular case in a prior role, I emphasized the importance of tracking: having eNPS, and doing pulse surveys - which received pushback. Eventually, the founder let me implement these frameworks, and they were amazed by the results. Convincing founders is part of the job. Like with any business relationship, it takes time to build up that trust. The most critical step in convincing founders that frameworks work, is by showing proof of concept, which helps to build trust. Show founders the numbers, metrics, and results to prove the efficacy of HR frameworks and measures. Giving examples from other companies who benefited a lot from the implementations also helps. Most importantly, do not shy away from the conversation just because you might get pushback. Your role is to support, and sometimes challenge. Finding the right balance is key: being supportive, but also speaking up on new ideas and challenges. but be aware of not only being supportive, and never challenging or bringing in new angels and ideas.
I hope you have enjoyed reading this article and taken away some practical steps to implement within your organization. Frameworks and measures provide a remedy to high-growth chaos in ever-changing environments. Concentrate on solidifying the right HR frameworks for your organization and watch its people, its culture, and its systems thrive.