What is Agile Performance?
The traditional HR practice to go in terms of evaluation was the annual performance review, along with employee goals having a top-down approach from business and unit objectives each year. In the context of individuals working on shorter-term projects of various lengths, often run by different leaders and organised around 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 HR process was an attempt to move from focusing on
- goal setting
- career discussion
- a midyear performance review
- a year-end appraisal
- a compensation review
to a model of ongoing dialogue.
This CEB survey - suggests that people actually got less feedback and support when their employers dropped annual reviews. Dropping appraisals without a plan to fill the void is a failure recipe.
Many organisations have switched to frequent performance assessments, often conducted project by project. This change has spread to a number of industries, having an overall focus on delivering more immediate feedback throughout the year so that teams can become nimbler, improve performance, and learn through iteration, checking, thus, all key agile principles.
Even a lot of lean consultants 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 the employee' engagement.
Pay is changing as well, imposing changes for the human resource management.
A simple adaptation to agile work is to use spot bonuses to recognise 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 behaviour. Instant rewards reinforce instant feedback in a powerful way. Annual compensations are less effective, not knowing exactly for what you deserve the compensation.
Other companies decided to eliminate 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.
Increases can also be allocated when employees take on more-difficult projects or go above and beyond in other ways.
As from my own experience you shouldn't value what is happening because you are payed, for but rather because you are involved in the company projects and you help your peers to get the job done. More often, the compensations could come from the teams as a recognition. Compensation is also being used to reinforce agile values such as learning and knowledge sharing.
What about personalisation in compensations?
For personalise compensation, the companies map where people are having impact in 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.
Some (final) thoughts
Companies should take in consideration team compensation as a whole and as well on its individuals appraisals and usually on the spot, not waiting for the performance review no matter how often it takes place.
In our digitalisation world, just doing agile is not enough, you must be agile.
This article is part of a bigger topic called Employee Engagement.