I know it still may feel like Summer now, but we’re all starting that year-end push now. Or at least, it’s time to.
And how are you doing on year-end stuff?
- Did you do all the performance reviews this year, I mean for real? I know you didn’t. At least, not for real.
- Did you get any routine salary adjustments done? I hope so. But I doubt you did this yet.
- Did you make any option grant adjustments for the Top 10% of folks knocking it out of the park? That’s OK, just start thinking about when. And planning.
- Did you remember to really thank the folks on the team that just killed it this year? Of course, you did. Maybe not enough, though.
- Did you really recognize the folks that stepped up in the crazy year? Because some stepped up … and others really stepped down a bit.
Anyhow that’s all important, but ultimately, smaller stuff in a start-up. You can survive without performance reviews, and you can give your raises out and additional grants in January if you don’t get to them before. And just remember to thank people all the time, and then that part will be OK.
But there are some things you just have to get done now, before the year closes out and gets crazy. Because if you wait — the impact will just be too small.
- First, start the promotion talks now. And promote one more great person than you’d planned. The #1 thing that leads great people to leave a pretty good start-up is lack of career advancement. That informal team lead on your engineering team? Time to make her a director or formal manager. That top 5-10% AE that really thinks they are ready to manage a small team? I know they aren’t. But you may have to promote them now, anyway. I know there’s no room on the org chart, you’re all Teal, you think this stuff doesn’t matter. You are wrong. It does. The best of us, the ones looking to grow, need this. So first, don’t wait until next year. At least not to start the discussions. And second — find a way to promote one more great one than you’d planned. Again, I know there’s no room on the org chart. But find a way.
- Second, payout any year-end bonuses early, at least before the Holidays, if you can. They don’t feel nearly as good in January. I know you don’t exactly know how the year will end. But even if you have to hand out envelopes of cash yourself– get it done now. Bonuses don’t really move the needle. But folks — they are tangible proof that you are honoring the social contract. Pay up. At least in time to put a few extra presents under the tree.
- Third, do top-up stock option grants to your top employees who have been with you for > 2.5-3 years. Don’t listen to the VCs here. If the great people on your team are 75% vested, they need another grant. A much smaller grant — but another one. You know they do. They won’t feel very good being “fully vested”. They aren’t founders, it’s not the same. Your VCs may tell you this is a bad idea, because as a policy, it leads to higher-than-model dilution. They’re right. Respectfully disagree, and do it anyway. At least, do it strategically.
- Fourth, fix whatever’s truly messed up in comp (and whatever else) before the year ends. Don’t wait for annual raises. We all end up with an engineer or two that is significantly underpaid compared to her peers. A marketing lead that is undermarket. A customer success manager that came from a crappy job and was fine with a mediocre salary at the time. Now is the time to true it up, folks. It’s not much money. And it’s the right thing to do.
This stuff may sound minor, but it isn’t. You gotta do it. Once you are at Initial Traction, it’s all about the team. You need to spend 20% of your time recruiting your management team, all the time, every week, every month (more on that here). But also, as the year winds down especially, you need to make sure you deliver for your non-management team, too. Fix what’s wrong now. It’s not too late. Promote who deserves it. Pay up. And level up.
Especially — don’t wait until next year to do it. By then — they may be almost out the door.
(note: Updated version of a SaaStr classic post)