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Managing the Matrix: Performance Management in Matrix Organizations


Whether you are a startup or a mature company, employee performance management is critical in order to achieve growth and success. The antiquated annual performance reviews have evolved, and for good reason – they simply don’t work. If you work in a matrix organization, you know better than most that the traditional annual reviews cannot accurately assess an employee’s performance.

In this article, we outline some of the performance management problems often faced by matrix organizations and offer some solutions.

Problem #1: Unclear responsibilities

Due to the flexible aspect of a matrix structure, employees can move around from position to position and from team to team, and their goals are constantly changing. Moreover, employees also have more than one manager, which in turn means that they have more than one manager to report to thereby creating further employee confusion. A big issue that can arise in matrix structures is that employees may be unclear about their expectations and tasks at hand. In fact, research by McKinsey asserts that only a minority of matrixed employees are clear about their goals, whereas 60% of non-matrixed employees know what is expected of them.

Solution: Set SMART goals

Setting SMART goals, which stands for specific, measurable, attainable, realistic, and time bound, are important in any workplace team, but for a matrix structure with different departments working together they are critical. Only 68% of senior managers fully understand organizational goals. Therefore, it makes it more critical to have organizational goals aligned and communicated clearly for everyone in the organization.

To be successful, companies need to be able to set clear goals that are actionable and easy to track. In fact, those who set actionable tasks for goals and initiate weekly progress reporting to their peers tend to achieve 40% more than if they didn’t. The goals also need to be specific, so that each employee has a clear view of their responsibilities. Moreover, goals need to be measurable so that the progress can be assessed. Goals should also be time-bound, with a clear start and end date, and managers need to be able to track goal progress (check out Pavestep’s goal management solution which helps managers track all their employees tasks in one place).

Of course, managers must ensure that their employees projects are attainable. Goals need to be realistic so that employees feel motivated to complete their tasks done and produce great work. If you create goals using this framework, employees will have a better understanding of their tasks and hence, a better chance in completing their task efficiently and effectively.

Problem #2: Uncertainty about assessing employee performance

Because employees may be working on multiple tasks on multiple teams with multiple managers, this can make it challenging for managers to accurately measure employee performance, particularly if the traditional annual reviews are the only way of measuring performance. There can also be confusion from the employee’s perspective – whose assessing their performance? Who can they talk to for career advancement or compensation discussions?

Solution: Implement continuous feedback conversations and check-ins

Feedback is crucial in order to check-in with your employees and discuss how their performance is going. In matrix organizations, constant feedback from managers to direct reports allows them to check in with task progression, but it also allows managers to make sure the employee has the right set of skills and tools to complete their tasks efficiently and effectively. 360 feedback is also very powerful in matrix organizations as many employees often change teams and managers, and the ability for upward feedback ensures that everyone is getting right developmental opportunities. Check out Pavestep’s continuous feedback solution which helps organizations develop and motivate their employees with 360 feedback in real-time.

Feedback check-ins should happen before the implementation of a project so that goals can be clearly communicated to all employees. Managers should also provide feedback throughout the project. A basketball coach doesn’t sit quietly throughout a game, rather they provide feedback throughout the game. Managers should too. This is particularly relevant as goals and expectations may change throughout a project. These check-ins can be as simple as asking an employee in real-time the status of a task or offering support.

Lastly, feedback needs to be given after the project is completed. These last conversation is really important for measuring employee performance because the manager can discuss where the employee did well during the project and where they can improve for the next one. If an employee feels a lack of feedback, they can begin feeling unmotivated. On the contrary, feedback motivates employees. 68% of employees who receive accurate and consistent feedback feel fulfilled in their jobs. Moreover, constant feedback sessions can ensure fairness and accuracy in performance appraisals.

Wanting to revamp employee performance management at your company? This guidebook can help. Download the Guide to Employee Performance Management.

Problem #3: Insufficient clarity on who is in charge

As mentioned, within a matrix structure, an employee often has multiple managers (project manager, direct manager, etc). Employees with two or more managers often juggle multiple assignments that each manager considers urgent. This can be a source of confusion for employees – who do I report to? Who do I go for help? Whose tasks should I prioritize? Moreover, in any type of conflict situation, one of the managers could easily become “the man in the middle.”

Solution: Create clear communication guidelines and have the right tools in place

Multiple managers often mean there are different perspectives and priorities. Clear communication is key. There needs to be explicit guidelines on how an employee will work with each manager, how frequently the employee and manager will meet, how progress will be documented, etc. Frequent meetings can guarantee that all managers are kept in the loop about productivity or any bumps the employee has run into. These meetings are essential as employees are seven times more likely to be engaged when they report that their managers are aware of the task and projects that they are working on.

Since team members may report to more than one manager, the details on the employee’s progress need to be clearly documented in central location that is accessible to both the managers and employees. Availability of employee performance data allows managers to compare notes, ensuring the right developmental and training plans for employees.

For many matrix organizations, finding the right performance management software can be difficult. An ideal performance management solution should (i) have the ability for continuous, 360 feedback, (ii) allow for clear goal management, and (iii) be open access so all parties have the employee performance information.

If you are part of a matrix organization, make sure to check out Pavestep’s performance management solution. We are perfectly designed for matrix/agile teams. Book a demo with us today!

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