Thursday, April 23, 2015

CIO as Agility Leader: How to Practice Performance Management in Agile Way

As a rule of thumb, measure what you want to get.

Agile becomes a principle and practice to run the project and even today’s digital business. From a performance management perspective, how to do it in an agile way? Self-organizing teams, help each other to meet the commitments. The performance of a team differs from others. The delivered business value, the velocity is subjective or relative and can't be compared between teams. How is the team's performance considered during performance management? So, if you get to choose; do you want to motivate your people, or would you prefer annoying them? Does your management want to change its culture? That would mean they need to start thinking in different ways to practice performance management and rewarding for motivation - how is it applied in agile teams, or more broadly, how to do performance management in an agile way? This is one of the fundamental questions from the management, towards the cultural change in an organization.

Performance Management for Agile focuses on Autonomy, Mastery, and Sense of Purpose: Different things motivate different sorts of people. For the types of work in Software Development, the prime motivators are "Autonomy" (being in control of your own destiny and your own work); "Mastery" (becoming good, becoming very good, at the things you choose to become good at) and "Sense of Purpose" (the knowledge that what you do is part of something well worth doing). Performance management is important because as soon as specific aspects are measured, a person will concentrate on improving what is being measured. This can have a bad effect as they neglect or even degrade the other aspects; other aspects that likely are also important.

It is a mind-shift for organizations when you start using agile techniques and assess agile performance. You'll just need to figure out what is important to the team and to the business, and use those as your benchmarks for measuring 'performance.’ What’s expected from an agile team, where the team needs to complement each other on various needed capabilities to deliver the commitments, the selection of parameters becomes very critical. The parameters must enhance the sense of togetherness as a team and improve the overall capabilities of the team. If your organization wants to have 'data' to measure for merit increases, you could look at a few things:
- Team Acceptance Percentage -- Does the team meet its sprint commitment reliably? Over-deliver? Miss?
-Quality - how are team members doing against the established definition of done? Code reviews, defects, Sonor warnings, test coverage, etc
-Customer satisfaction -- How is the output of the team (member) regarded within the business and stakeholders? Are they delighted? Excited about demos? Pessimistic about the team member or team contribution?
-Roadmap/ Platform contribution - Is the team member contributing to the vision of the product? Creating stories for the PO? Improving flexible architecture? Bring value to achieve business goals., etc.

As a rule of thumb, measure what you want to get. Any sensible manager would want the overall performance of the team to improve, rather than the performance of individual members... and there's no guarantee that if the performance of individual members increase the performance of the team will also increase; an individual's performance is likely to increase *at the expense of* the time they spend collaborating with and assisting others. That's an easy mistake to make. So if you want to measure performance, measure up a level; measure the team, not just the individual. Thus, you can get the advantages of the self-organizing team applied to improve the performance of the team as a whole, rather than having individuals attempting to improve their personal performance at the expense of the team. So the managers can provide
-the resource takes ownership to achieve the team/sprint goal
-the resource contributes towards team collaboration
-the resource work on improving his/her skills to be cross-functional, etc

The purpose of Performance Management is not just for calculating the hard number, but also for improving soft factors such as culture. The key message that the company and the management need to send out is that key agile values are not just on paper, but officially part of the appraisal process. Amending and aligning performance management is a key measure to be taken up as part of Agile or digital transformation.


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