Does an early stage social enterprise need a performance appraisal process in place?
Unlike a mainstream corporate job, most employees in a social enterprise join the organisation with a passion for social good and a zeal towards personally contributing to solving some of the society’s biggest problems. With this as a context, it is pertinent to know how should you as an entrepreneur undertake a performance appraisal of your employees.
Consider Your Social Essence, Social Impact, And Business Operations
Many theorists, researchers and management stalwarts have put forth their mechanisms for assessing the performance of a social enterprise. In a research paper Chang-Lin Yang, Rong-Hwa Huang and Yun-Chen Lee from the Fu Jen Catholic University, Taiwan have talked about three key factors that can determine the performance of a social enterprise.
As the core of the measurement model, this dimension supports the social enterprise and maintains it on the right path. This model dimension refers to the relevant literature to measure two aspects of social enterprise performance, achievement of social mission, and performance in social entrepreneurship. Social mission and social entrepreneurship are the two main aspects of a business and a social enterprise.
Social enterprises essentially build a profitable model with an aim to solve a socio-economic objective and hence retaining the essence of a social enterprise hinges on the sustainability of the social enterprise.
Social impact is how organizations’ actions affect the surrounding community. – Stanford Daily
Social impact is the quantitative and qualitative change in the socio-economic lives of people brought about by conscious and concerted intervention.
Social impact and the subsequent business operations have a golden mean that binds them. Social Innovation.
Social Innovation is a product or a service that is designed in response to a specific socio-economic or socio-environmental problem and which positively impacts the lives of affected people.
The business model of any social enterprise is a derivative of social innovation because that innovation is designed to deliver your desired impact in the most effective way.
Performance Assessment Of Your Team In A Social Enterprise
While the assessment of the above three factors are said to measure the performance of a social enterprise, performance assessment of your employees are closely linked to your organization’s performance and its vision. That being said, there are a few questions that arise when we talk about having a performance assessment system for your team in a social enterprise.
How would you define the goals of an employee in an early stage startup?
You cannot have all your employees chase the company goals at the outset. Yes, those are your macro level benchmarks, but every system, be it corporate or impact driven, needs goal division that is tangible, measurable and impactful. Goals that you set for your employees are the subgoals of your vision.
“When an organisation is young and the team is small with a few good people, response and therefore trust moves very quickly through the system. You are bound together by a founding set of experiences where many things, including the value system are lived out visibly. However , as more people join and the circle grows bigger, it is difficult to transfer the expectations and values in a short period of time. Having a performance assessment system helps force the organisation to make expectations explicit. The value system then reinforces the fundamental nature of these efforts. Together, they determine the direction, rigour and promote higher order systemic behaviours resembling resilience and courage. This allows the new members of the tribe to hit the ground running and leverage the powerful cultural and execution momentum of the founding team” – Ashwin Kurian, ex-Simpa Networks
Goals are a direct derivation of your value system, your essence and impact creation. It is necessary to cross check time and again whether the goal that you have adopted speaks to your philosophy.
“That is the only thing that will provide strategy with defensibility. It gives you the strength to avoid bias in your goals.” – Ashwin
Does an organisation with a team size of 10-20 need an assessment system?
Sometimes, the answer to this question depends on the personality and the approach of a social entrepreneur. There is no one thing that is right or wrong here.
Pranil Naik, Founder of LeapForword believes,
“I run LeapForWord sans any rules based on certain core human values like Freedom & Fairness. We have no PA and the idea is to not have one.” – Pranil
On the other hand, Anusha Bhardwaj, Executive Director of Voice4Girls spoke to us on why a social enterprise needs performance assessment system.
If you have a strategy you have goals. Having a performance assessment model for your social enterprise is necessary. If you are a small company, then all the more. Metrics are allotted to each employee and the alignment of goals of each employee is closer to the vision and mission of the goals.
How often should one carry out the performance assessment of employees in a social enterprise?
“At Voice, we do an early assessment of employees like the normal practice, but internally, the teams do this on a half yearly, quarterly, sometimes even on a monthly basis to ensure that they are on the right path and that the micro goals allotted are met on a regular basis.”
While the impact is qualitative and subjective, micro goals like relationships with donors, feedback from 100 impactees are some such instances of goals that you can set for your subordinates. Just like hiring for a leadership position is more strategic in nature than a field role, goals for members at key positions is going to be more strategic, managerial and holistic. As against this, goals for your junior employees will be more technical and focused on tasks.
For instance, Nanohealth’s ultimate goal is to deliver healthcare to the doorstep of millions. Thus it follows that the goal of the Saathis (community health workers) is to monitor the health of families or patients in their targeted communities. Their goal is to undertake regular check ups, prescribe medicines and report them to a hospital for advance medical care.
Like corporates, Social Enterprises also need a performance assessment system not only to decide on the compensation but also ensure that the organisation’s vision to deliver impact is met. A well thought out performance assessment will not only bolster your impact delivery process but also help your team align their individual goals to your social enterprise’s vision. But again, some entrepreneurs may disagree.
Cover Image: TheStartup Garage.