4 tips for performance management in matrix-style organizations

Are you running a matrix management structure and feel like your performance management needs a boost? Unfortunately, there is never a clear answer to improving employee performance, and a matrix structure is often confusing.

But by understanding the challenges of running a matrix organization and following our recommendations for better performance management, you and your employees will feel more aligned, connected, and functional.

What is a matrix management structure?

A matrix management structure is an organizational structure where employees report to more than one manager and there is a strong emphasis on cross-functional teams and collaboration.

In matrix organizations, the chain of command is segmented into two lanes, with one employee reporting to two separate managers who are equally accountable for performance. Typically, a manager is in an administrative role, such as finance, human resources, information technology, sales, or marketing. The other works in a business unit related to a product, service, customer, or geography.

Matrix structures contrast with hierarchical models where business control is centralized and employees report to a manager who is in a single track chain of command. This type of structure follows the military model and can often create silos around products, regions, departments, and customers.

Challenges of the matrix management structure

A matrix organizational structure allows companies to easily collaborate across different departments, operate more agile, improve team communication, and upskill employees. Also, because teams and employees are shared across projects, the matrix structure means that resources are used more efficiently.

However, a company can face numerous challenges operating in a cross-functional matrix-style structure.

Managing multiple reporting relationships

In a matrix organization, employees will have multiple managers who are equally responsible for different aspects of their work. This can make it difficult to establish clear lines of communication and accountability, which can affect performance management.

Conflicting priorities and goals

With multiple reporting relationships, employees receive conflicting priorities and goals from different managers. This can lead to confusion and frustration, making it difficult to manage and measure performance.

Identify and measure performance

It can be difficult to identify and measure performance in a matrix organization, especially if employees work on multiple projects or teams. Additionally, without clear performance metrics, it can be difficult to accurately assess individual performance.

lack of visibility

Managers may have limited visibility into the work employees are doing for other teams or departments, making performance evaluation difficult.

ensure consistency

With multiple managers, ensuring consistency in performance management practices across the organization can be challenging. This can lead to confusion and frustration among employees, which can affect employee performance and engagement.

Provide feedback

Providing timely and effective feedback can be challenging in a matrix organization, especially if employees work remotely or across different time zones.

Four Tips for Improving Performance Management in Matrix-Style Organizations

1. Align goals and objectives

research by McKinsey found that only a small percentage of enrolled employees are clear about their goals, compared to 60% of employees in a more traditional organizational structure. Unclear responsibilities can affect job performance, employee satisfaction, and create bottlenecks, and McKinsey states that “clear and accountable roles are among the most important drivers of organizational health.”

To counteract this, leaders need to focus on creating clear goals that are specific, actionable, achievable, and time-bound, which helps employees have a clear understanding of their responsibilities. In addition, it is necessary to measure objectives (which is simplified with a centralized system for performance management), so that the progress of employees can be monitored and evaluated.

Goal and OKR tracking and management is easy with Focus, where every employee can set goals, track progress, and take action to achieve them, regardless of reporting structure.

It’s important for everyone to have visibility into each other’s priorities to provide clarity and transparency, as well as being able to update those goals within the workflow.

2. Implement continuous and effective performance feedback

A matrix-style structure means that employees often work on multiple projects and juggle multiple tasks for different teams while reporting to two different managers. A situation like this makes it difficult for managers and leaders to measure employee performance. For the employee, it can be a challenge to understand who to report to and who is responsible for their performance.

A proven way to provide valuable and ongoing feedback is through 1-on-1s. At 15Five you can have recurring 1-on-1 agendas with multiple colleagues, regardless of role or level. For example, if an employee has two managers they report to for different projects, there is a clear and streamlined way to organize talking points, action items, and next steps on a regular basis.

Now both managers and employees feel equipped to focus on the right things that drive higher levels of performance and engagement.

Regular, asynchronous check-ins are also crucial for matrix-style organizations so that teams stay aligned and monitor the progress of multiple initiatives, all while saving time by avoiding hours of meetings per week.

When performance feedback is used effectively, it has the ability to grow and develop employees and retain them for the long term, improve trust and communication, and strengthen bonds between employees and managers.

3. Conduct 360-degree reviews

To ensure feedback is impactful in a matrix-style structure, leaders should adopt a 360 model that takes sole responsibility for feedback off a manager and relies on peer reviews and feedback up and down to help form a broader evaluation of the employee. Self, manager, peer, and/or upward reviews are a great way to holistically assess performance.

You can also reduce bias in your review process by evaluating competencies by role and allowing multiple managers to review a single employee.

In a matrix-style organization, you likely have multiple managers who need to provide feedback and have visibility into their employees’ performance. Within 15Five it’s easy to add additional managers to a performance review cycle for your employees, so no matter how the report is structured, you get the full picture of performance in a fair and efficient way. If teams and roles change frequently, you can also have flexibility by assigning some reviewers as default admins and others only for certain review cycles.

A great benefit of 360 reviews is to help identify development needs at an individual and organizational level. This generates common themes that the employee can use for growth and development, while ensuring that employees who change departments or job roles have access to continuous development across the organization.

4. Create clear communication guidelines

In a matrix organization, there is confusion about roles and responsibilities because employees report to more than one manager. As discussed, this leads to confusion and uncertainty about expectations. Without communication guidelines, employees risk operating in a silo and opening avenues for confusion and conflict, and no manager wants to end up caught in the middle playing referee.

To solve this problem, companies need to create and implement clear communication guidelines that allow employees to easily understand who they should go to for guidance, how to best communicate with this person, how they will work with each manager, the frequency of 1-on- 1 and what is expected from those conversations, and how employee progress will be measured and documented, which typically occurs in a performance management system that allows for dual input.

In addition to the regular check-ins and 1-on-1s that are a fundamental part of strengthening the manager-employee relationship, at 15Five we start each employee-manager relationship with a Best Self Kick Off to ensure psychological safety.

The benefit to matrix-style organizations is that you can hold these meetings as often as you like and document important things like work style, strengths, communication preferences, and more.

When asked about the benefits of being on different teams, McKinsey research found that supermatrix employees were twice as likely as slightly-matrix employees to say that their organizations not only helped them collaborate more effectively with coworkers, do their best work, and serve customers well, but also stimulated bottom-up innovation.

With cross-functional collaboration being a key goal of matrix organizations, it’s even more important to ensure clarity of communication as teams focus on problem solving while working across different departments.

Using performance management software that provides a comprehensive platform for individual checks and records, tracking and managing OKRs, and has additional management capabilities for fully aligned performance reviews, managing employees in a performance organization. matrix style. it becomes more agile and efficient. Sign up for a free trial of 15Five to get started.