WorkforceGrowth: Making Dreaded Performance Evaluations Less Dreadful

Earlier this week, Andreessen Horowitz’s newest general partner, Scott Weiss, sang his new employer’s praises, telling me that Andreessen Horowitz is a well-run organization that solicits 360-degree reviews of its GPs yearly, including from its CEOs and (presumably anonymously) other employees within the firm, including its other GPs.

The firm isn’t the first. Tens of venture firms have worked for years with consultants who conduct personality assessments through anonymous 360-degree performance reviews.

Newer is that Andreessen Horowitz isn’t waiting for cracks to emerge to examine what’s working and what isn’t, and it’s the kind of forward thinking that Haris Khan believes is catching on elsewhere.

Khan is the CEO and co-founder of  WorkforceGrowth, a bootstrapped, 18-month-old SaaS company that provides performance management tools that make far easier – and ostensibly more fun – for employees and managers at small to mid-size companies to evaluate one other.

Khan says the company — moved from Washington D.C. to San Francisco this week — was born out of his own experience. A Carnegie Mellon grad, Khan ran a software development company while in school, and “every time I reviewed employees. It was a painful experience,” he says. There were sometimes perception gaps. Worse, as is often the case, the reviews were tied to pay, which created stress on both sides of the table.

“I just thought, ‘Let me solve this problem myself,’” recalls Khan, who says the company already has roughly 10 paying customers using its software, which more recently began incorporating (yes) social and gaming mechanics. Employees can solicit feedback about how they handled a presentation by conducting an ongoing conversation with their peers and/or managers online. Because the communication takes place outside of email, it can happen entirely anonymously.

The gaming aspect layers in other elements, like the ability to give public kudos via virtual “badges” to employees or managers who are particularly helpful, and through games like “Happiness Inspector,” which basically ferrets from employees how challenged they are by their managers, then rewards the bosses whose employees are happiest.

If WorkforceGrowth doesn’t sound revolutionary, that’s kind of the point on which Khan is hoping to sell seed investors. (WorkforceGrowth is raising a $750,000 to $1 million round.)

“It’s evolutionary, because even though employees want a bottom-up system, in most organizations, HR people don’t buy into it and neither do executives,” says Khan. Giving them software tools to supplement the processes they are already using is less threatening. At least, that’s the hope. And at least one outside observer thinks it makes a lot of sense.

“No one wants to do bottom-up reviews, but I think it’s critical,” says L.A.-based venture capitalist Mark Suster — who has founded two companies, including the content management company Koral, acquired by Salesforce.com in 2007 — and who blogs regularly on management issues.

“Too many companies tie reviews to pay. Too many of them invite their employees to game the system,” says Suster. “If you want to get into performance management, you have to get people wanting to log in, to make it a lightweight way to assess their own skills, their peers’ skills, and senior management’s skills. You have to build a software tool that’s part of [everyone’s] job function.”