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).

Reference:
For whom the bell curve tolls
Punishing by Rewards