Performance Management in Startups: Why Feedback Culture Matters More Than Formal Reviews

Performance management rarely makes the “top reasons I started a company” list.

Yet at Startup Boston Week, a packed room of founders, operators, and people leaders stayed late for a candid conversation about one of the most overlooked levers of startup success: how teams give feedback, set expectations, and help people grow.

Moderated by former Chief People Officer Christina Luconi (People Innovations), the panel featured talent and HR leaders Tania Philipp (Vor Bio), Laura Poisson (ClearRock), and Trupti Banda (Breed’s Hill Human Resources Solutions). Their collective experience spans scaling organizations, advising startups, and helping early teams build the foundations that determine whether growth strengthens culture or fractures it.

Their shared message: performance management in startups isn’t about forms, ratings, or annual reviews. It’s about building habits that help people succeed. And the earlier you start, the easier everything becomes.

The full event video is embedded below if you’d like to watch the conversation start-to-finish, or keep reading for an overview.

https://www.youtube.com/watch?v=oP93XOt18hY

It Starts Earlier Than Most Founders Think

Many founders assume performance management begins once the company reaches scale. In reality, it starts the moment a second employee joins. Not with software or formal reviews, but with conversations.

“The starting point is communication,” said Trupti Banda. “You don’t need a heavy HR system, it’s about regular dialogue and clarity around what people need to succeed.”

Early-stage teams don’t need bureaucracy. They need shared understanding: What does success look like? What matters right now? What’s working and what isn’t? Regular dialogue builds alignment before misunderstandings become performance problems.

Build Habits Before You Build Systems

In startups, speed is constant. Roles evolve weekly. Priorities shift overnight, that’s why habits matter more than processes.

Laura Poisson encouraged founders to think in terms of cadence rather than compliance. “Establish regular meetings and make them consistent,” she said. “Those are your most important meetings. Your people are the key to success with your clients.”

A simple structure can go a long way:

• What are you working on?

• Where are you stuck?

• How can I support you?

Consistency creates clarity and clarity reduces friction.

Feedback Shouldn’t Be a Surprise

Few people enjoy annual performance reviews. The discomfort often comes from a deeper problem: feedback arrives too late. If someone hears for the first time in December that they’ve been missing expectations since March, the system has failed them.

“No one should ever be blindsided in a performance conversation,” Luconi noted. “If you wait a year to tell someone they’re struggling, you haven’t helped them or your company.”

Frequent conversations change the dynamic. Annual reviews become summaries, not revelations. When feedback is shared early and often, improvement becomes possible.

Culture Determines Whether Feedback Works

Feedback systems fail when people feel unsafe speaking honestly. Psychological safety (the belief that it’s safe to speak up) isn’t a buzzword. It’s a performance multiplier. 

To build that safety, leaders must model it. “All eyes are on you,” Poisson said. “If you want feedback to be normal, you have to show people how to give it and how to receive it.”

Startups, by definition, are figuring things out in real time. Treating mistakes as learning, rather than failure, builds a culture where people can improve without fear. 

“Excellence is caring,” Poisson added. “Mistakes are learning.”

Compensation and Promotions Set the Tone Early

Startups have an advantage: they can establish fair practices before complexity sets in. Even without formal career ladders, leadership teams should align early on:

• what strong performance looks like

• how advancement decisions are made

• what behaviors are rewarded

“If you get everyone aligned early, you set the trajectory for the rest of the organization,” said Tania Philipp. Shared philosophy builds trust and prevents confusion as the company grows.

Addressing Underperformance Without an HR Team

In small teams, performance issues can feel personal. Avoiding the conversation often feels easier. It isn’t.

“Start with empathy, be honest, and address the issue,” Banda advised. “Silence makes the issue bigger.”

Effective conversations include:

• clear examples of what isn’t working

• a definition of success

• a timeline for improvement

• written follow-ups to ensure clarity

Most people want to succeed. Direct, supportive feedback gives them the opportunity to do so.

Not Every Struggle Means a Bad Hire

One of the hardest leadership decisions is determining whether someone needs support or isn’t the right fit.

Something to remember is that role clarity issues often show up as inconsistent performance and strong intent paired with uneven execution. “Good intent with poor execution usually means they’re trying, they just don’t know what success looks like,” Poisson explained.

Poor fit, on the other hand, tends to look like persistent underperformance and lack of improvement despite coaching. 

Understanding the difference helps leaders choose development or transition thoughtfully.

The “Fire Fast” Debate Isn’t Black and White

Startup advice often emphasizes hiring slow and firing fast. The reality is more nuanced. Waiting too long to address issues erodes morale and burdens the rest of the team. But moving too quickly without clarity or support undermines trust.

“When performance issues linger, the team feels it,” Poisson said. “The question shouldn’t be, ‘Can we survive another week?’ It should be, ‘Is this working?’”

At the same time, Philipp emphasized empathy in difficult conversations. “Sometimes the most important question is: Are you happy?” she said. “People are often relieved when someone finally asks.”

Lightweight Practices You Can Start This Week

You don’t need an HR department to build a performance culture. Start here:

• Prioritize weekly one-on-ones. Short, consistent check-ins matter more than long, sporadic ones.

• Keep priorities simple. Focus on the top three goals.

• Make feedback two-way. Ask employees what they need to succeed.

• Document key conversations. Clarity prevents misunderstandings.

• Model humility and curiosity. Leaders set the tone.

“Model the behavior,” Banda said. “Ask for feedback and show people how to receive it.”

Keep It Simple. Keep It Human.

Startups don’t fail because they lack performance review templates, they struggle when expectations are unclear, feedback is avoided, and trust erodes. Performance management isn’t about process, it’s about helping people do their best work  and building a culture where honest conversations are normal.

Startups rarely have perfect answers, but they can create environments where teams learn, improve, and grow together. And that, more than any system, drives performance.

The full event video is embedded above (or you can watch it directly on YouTube) to catch the complete Q&A and founder stories shared from the stage.