The traditional HR practice to go in terms of the evaluation was the annual performance review, along with employee goals having a top-down approach from business and unit objectives each year. Nowadays, the context has changed and for individuals working on shorter-term projects of various lengths, often run by original leaders and organized around agile teams, that performance feedback delivered once a year, from one manger, made little sense. They need to collect information from agile teams at more levels.
The new Agile HR process was an attempt to move from focusing on
to a model of an ongoing dialogue, in which adaptation is present at every step of the way, redefining the approach based on the requirements and needs.
This CEB survey – suggests that people got less feedback and support when their employers dropped annual reviews. Dropping appraisals in the absence of a plan to fill the void is a failure recipe. Thus, we should change it. Because we are all looking for efficiency, right?
Many organizations have switched to frequent performance assessments, often conducted project by project.
This change has spread to several industries, having an overall focus on delivering more immediate feedback throughout the year so that agile teams can become nimbler, improve performance, and learn through iteration, checking, thus, all key agile principles.
Luckily, wonderful practices spread easily, and the business environment is following an expert direction.
However, there are still a lot of lean consultants who can sustain that it is not financially efficient (focusing only on waste). In my experience, I’ve noticed that having at least 7 discussions per year will increase employee engagement. But people should apply to see if it is working for them or not, otherwise they talk in the absence of real arguments. Thus, try to change and see if it works.
Pay is also changing, imposing changes for human resource management.
A simple adaptation to agile work is to use spot bonuses to recognize contributions when they happen rather than rely solely on end-of-year salary increases.
Validating the hypothesis, studies have shown that compensation works best as a motivator when it comes as soon as possible after the desired behavior. Instant rewards reinforce instant feedback powerfully.
Annual compensations are less effective, not knowing exactly what you deserve.
Other companies eliminated annual raises for its knowledge workers. Instead, the company adjusts payment for each job much more frequently, according to research on where the market rates are going.
It can also allocate increases when employees take on more-tough projects or go above and beyond in other ways.
As from my experience, you shouldn’t value what is happening because it pays you for but because it involves you in the company projects and you help your peers to get the job done. More often, the compensations could come from the agile teams as a recognition. Compensation is also being used to reinforce agile values such as learning and knowledge sharing.
To personalize compensation, the companies map where people are affecting their roles and where they need to grow and develop.
The data on individuals’ impact on the business is a key factor in discussions about pay.
Companies should take into consideration agile teams compensation following the Agile HR mindset, and as well on their individual’s appraisals and usually on the spot, not waiting for the performance review no matter how often it takes place.
In our digitalization world, just doing agile is not enough, you must be agile.