This Y Combinator-backed HRtech startup helps companies better annual performance reviews

Mesh helps companies track their employees’ performance against their goals, as well as helps employees engage with each other better. The startup’s backers include Sequoia Surge and Y Combinator, among others.

This Y Combinator-backed HRtech startup helps companies better annual performance reviews

Monday February 14, 2022,

5 min Read

"Efficiency or die" has always been the axiom in the business world, but it has become even more pertinent today in the post-COVID-19 era we inhabit.

‘Productivity and efficiency’ have today become an integral industry instead of just business parlance, and make up a market that could potentially be worth $75.09 billion by the end of 2022, as per a Statista report.

The blockbuster successes of Zoho and Freshworks lend credence to the fact that every business — big or small — is willing to loosen its purse strings for resources that can help it become agile, more streamlined, and efficient, especially when it comes to human capital. Employees are obviously important cogs in the business machine, and their efficiency (or the lack thereof), can make or break a company.

Which is why it’s even more important these days — due to increasing work-from-home and hybrid setups — for employees to resonate with their employers’ mission and values.

Mesh, a San Jose-based startup founded by Gaurav Chaubey, Rahul Singh, and Saurabh Nangia, has made it its personal mission to help other companies improve their efficiency when it comes to employee engagement and productivity.

It supplements companies’ efficiency efforts by helping them manage and measure their employees’ performance on an ongoing basis and enables leaders to set Objectives and Key Results (OKRs) for their team members.

The platform also nudges team members and managers to evaluate their performance based on these OKRs, thereby encouraging people to take ownership of their objectives and work.

“​​The primary challenge businesses face today arises from traditional performance management systems that have been practised for decades, utilising manual operating systems and annual reviews and appraisals. Our vision is to bridge this obstacle with a modern model that looks at organisations as organisms," Gaurav tells YourStory.
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Essentially, Mesh puts the onus of tracking one’s performance on the employee, as well as the management by pushing for regular check-ins on OKRs. It also has a social aspect to it where employees or teams can post their achievements on the microsite Mesh creates for each company like an internal social media page, which can inspire others to aim higher.

The startup has been backed by Sequoia Surge, Y Combinator, and RTP Global, which have together invested $5 million in its seed funding round.

"At the heart of it, Mesh drives today’s high-performing workers to use critical self-application, rather than rigid and robotic structures," Gaurav says, adding the startup, which has around 35 employees, also uses the platform internally.

How it works

Mesh’s platform has three main components:

  1. An internal social media page open only to the company’s employees where they can publicly acknowledge each other’s wins, contributions, and achievements.
  2. A goal-setting interface that allows managers and employees to chart out their objectives and key results.
  3. A feedback and review process that nudges employees to evaluate themselves against their goals, and helps managers track their progress. The ‘review’ component uses artificial intelligence (AI) and automation to intelligently pre-populate appraisal forms managers have to mostly work manually on, and is based on inputs entered by the employees as they evaluate their performances.

Business model

Mesh charges companies for the use of its interface on a per-employee basis, and bets on the company’s growth to result in greater revenues for it.

Currently, the startup charges companies between $4 and $10, per month, per employee for the use of its platform.

It claims that the 30-plus companies it works with across five continents — including the likes of CRED, Trell, Meesho, CoinDCX, ShareChat, among others — have seen a 20 percent increase in goal attainment, and a 30 percent uptick in employee engagement.

Gaurav says Mesh’s aim now is to onboard even more companies on the platform and help them become more efficient when it comes to their human capital.

Interestingly, there’s a small group of Fortune 500 companies such as Adobe, General Electric, Deloitte, Accenture, among others, that have suspended the annual performance review ritual after realising that A) it’s not super efficient, and B) it affects employees’ morale when they’re ranked.

In fact, a Harvard Business Review study found that, for millennials, especially, doing away with rigid goals helped them communicate with their managers about their aspirations better.

"Of the 30 companies we studied, one preliminary finding that jumped out was that after a company removed ratings, managers talked to their teams significantly more often about performance (three or four times a year instead of only once). More frequent communication helps with employee engagement, development, and fairer pay, as managers better understand how their people are doing," the report by David Rock and Beth Jones read.

Another Harvard Business Review story stated: “With their heavy emphasis on financial rewards and punishments and their end-of-year structure, they hold people accountable for past behaviour at the expense of improving current performance and grooming talent for the future, both of which are critical for organisations’ long-term survival. In contrast, regular conversations about performance and development change the focus to building the workforce your organisation needs to be competitive both today and years from now.”

Whether businesses subscribe to a ‘no reviews’ policy, or an annual performance review ritual, the system and business of going about performance reviews, as they currently exist (mostly manually) are archaic and need to adapt to the evolving needs of the workforce.

And enabling this are startups like Mesh, and its competitors that include the likes of Betterworks, greytHR, Workday, Darwinbox, Belong, Monjin, Mettl.

Edited by Saheli Sen Gupta