Sunday, March 14, 2010

Performance evaluation in Agile teams - Part II

This is a follow-up to my earlier post on performance evaluation in agile teams

Traditionally our organization followed a balanced scorecard approach where organizational priorities get cascaded down to each individual in the form of performance goals for each evaluation period. Usually the Goals of the Appraisee is tied to the goals of appraiser. Performance evaluation happens in a bottoms-up manner where performance of each individual is aggregated to the next level (i,e, individual -> project team -> account team -> solution unit etc)

Tailoring done for Self Organizing Agile Teams

While we retained the basic philosophy of Balanced Scorecard, we did a number of tailoring specific to a self organizing agile teams. Following are the salient points:
1. Introduce certain degree of flexibility in selecting your individual goals: While we retained the alignment of individual goals to organizational priorities, we allowed some flexibility for individuals to pick their own goals. We defined a framework around Impact on end customers, Impact on organization and effort towards self development and allowed individuals to pick their own goals and targets around these.
2. Peer Evaluations: While we retained the best practices of bottom up evaluations, we added an additional step of "Peer Evaluation" specific to the agile teams

Peer Evaluation process

As the name suggests, Peer Evaluation process focuses on sharing your own assessment of your performance with your Peers (i.e Project teams) and getting their feedback. While we encouraged team to give constructive feedback on areas of improvement, we deliberately avoided any criticism of performance in this forum (Other mature teams may choose to disagree). At the end of the session, each individual provides a performance ranking of rest of the team and hands it over to the 'Appraiser' or 'functional Manager' as appropriate. Looking at the sensitivity around performance evaluations, we chose to keep this part confidential (again - other team may chose to share these rankings with the team too). The Appraise/Functional manager aggregates these rankings from all member of the team and prepares the performance ranking of the entire team.

This process work in conjunction with the one-to-one performance evaluation discussion where the appraiser provides subjective feedback. At the end of the evaluation cycle, the performance ranking of the team gets rolled-up to the next level.

In the next post, I will share our experience and learning from applying the above approach within our team.

Sunday, March 7, 2010

Performance evaluation in Agile teams - Part I

This is a three part blog discussing ways of doing effective performance management in agile teams. In this part, I will try to establish the problem statement. In Part II, we will discuss one approach I am trying out as a pilot in my team. In the concluding part, I will share results from the pilot.

As usual, i would request all netizens to add their valuable feedback on the way.

Problem Statement:
For quite some time, I have been grappling with finding ways to do effective performance evaluations in Agile teams.

In ideal agile organizations we should be assessing the performance of the project teams, instead of assessing performance of individuals. Extending that line of argument, agile teams should also share the realized business value delivered by their project. But that's Utopian.

In real world, enterprise IT invariably is treated as a support function to the business. Instead of sharing business value, enterprise IT is typically run with a predefined budget with a certain number of project teams. Most of the enterprises (like ours) use Forced Ranking as a means to incentivize high performance. Performance of individual employees are ranked relative to each other and the resultant grouping is fitted into the form of a bell curve, there-by separating high performers from average performers and from the rest.

This approach works for many organizations. In order to make forced ranking model work efficiently, pioneers of this model - General Electric Corp, defines following three success criteria for your performance evaluation system:

- have dimensional consistency: Its scales and criteria must be applicable across all employee categories
- be based on objective data: "You just aren't going to be able to find quantitative measures for everything that is important to you. But you can still be objective—you can make decisions that are not colored by your emotions or personal preferences."
- produce rich analytical feedback: Employees value meaningful assessments of their work more than any other performance motivator

So far so good..but things get blurry when it comes to agile teams. Is it possible to set "dimensional consistency" for agile teams? Can there be a single scale for a number of different self organizing agile teams? How objective can you get to derive performance indicators vis-a-vis following agile practices of reducing ceremonies and minimizing waste. Most important, who does performance evaluation in agile teams? A functional manager? Or (in scrum context) the scrum master/ product owner?

So how do we approach performance evaluations (maintaining the essence of force ranking from organizational standpoint) in agile teams? In following post, I would discuss the process we are trying out within my group (comprising of a number of agile teams).

For whom the bell curve tolls
Punishing by Rewards

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