Agile Team Performance Management

Arlen Bankston and Sanjiv Augustine @abankston @saugustine

June 14, 2010

Realizing the Human Potential of Teams

Performance Management • Current Issues• Emerging TrendsAn Agile Performance Management System• Goals• Intrinsic Motivation• Extrinsic Motivation• A Holistic ProcessQ&A

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Agenda

Performance ManagementCurrent Issues & Emerging Trends

What’s Wrong with Performance Management Today?

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Current performance management schemes are often ineffective.• Formal evaluations are typically

demotivating:o Focus on weaknesses rather than

strengthso Are done quite infrequently and don’t

provide timely, relevant feedback

• Rooted in “management 1.0” industrial age techniqueso Overemphasize the role of the managero Deemphasize the role of the individual

What’s Wrong with Performance Management Today? (Cont’d)

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Attempts to simplify the process for managers can backfire:• Traditional reviews “bundle”

o Feedbacko Compensation & Merit payo Legal cover

• Attempt standardization across:o Few who are making outstanding

contributionso Great majority who are performing

successfullyo Underperformers

“In practice, annual ratings are a disease, annihilating long-term planning, demobilizing teamwork, nourishing rivalry and politics, leaving people bitter, crushed, bruised, battered, desolate, despondent, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior…”W. Edwards Deming

Some current and emerging trends:• Work anywhere initiatives have created a

distributed workforce

• Generation Y’ers have different ideas, values and attitudes towards career progression

• Baby boomers are remaining in/reentering the workforce in large numbers

• Sustained outsourcing/offshoring continue to drive team geographical distribution

• New management ideas are gaining traction: Results Oriented Work Environment (ROWE) via Dan Pink: autonomy, mastery and purpose

• Agile methods have created empowered, self-managed teams

Workforce Trends

The Quality of Life Movement’s Hallmarks

1. Consumer Detox: conspicuous consumption giving way to more conscious buying;

2. Everyday Activism: citizens routinely expecting more upfront information on their brands and the values of the companies behind them;

3. Buying Out: cynicism, if not hostility, toward marketing in general;

4. Natural, Local, and Ethical: the rapid growth of farmers' markets, natural foods, and fair-trade awareness.

Finding Promise in Sustainability 2.0, Businessweek, September 3, 2009

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An Agile Performance Management System

A Journey with Results

Extrinsic Motivation Your Results.

What have we achieved?

How has the market judged us?

Intrinsic Motivation Your Journey.

What are we passionate about doing?

How and when do we work?

What do we want to build?

Do our rewards match our results?

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Different Strokes…

Extrinsic Motivation

If it succeeds, you get a big bonus.

Teams divvy up the profits democratically.

Your fate rests entirely on your results.

Bottom 10% are fired.

Intrinsic Motivation

Do what you like with 20% of your time.

Decide what products you build as a team, and how you’ll build them.

Work when you like, how you like.

Learn what you like from the best.

Company

Google“Whimsical Idea Factory”

9 “Four Radically Different Cultural Models: Best Buy, Google, GE, Semco,” BNET, http://www.bnet.com/2403-13059_23-237201.html

Semco“Extreme Democracy”

Best Buy“Every Day is Saturday”

General Electric“Ruthless Meritocracy”

An Agile Performance Management System (APMS) should:

• Unbundle feedback, compensation and merit pay, and legal cover

• Involve knowledge workers in determining own measurement criteria

• Ensure holistic involvement from team members, customers, users and managers

• Accommodate differing levels of performance & situational leadership

• Collect feedback frequently and use it to improve both product & process continuously

APMS Goals

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Intrinsic Motivation

• Knowledge workers need responsibility for their own productivity:o Knowledge drives productivityo Continuous innovation, learning and teaching need

to be part of the jobo Knowledge worker productivity is dependent on

quality at least as much as quantityo Optimal quality is the path to high productivity

• Knowledge workers must understand:o What is our business? o Who is our customer? o What does our customer consider valuable?

Autonomy

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People are happy when their job allows them to do the things they excel at.

• Shu: Followingo Learning fundamentalso Concentrating on basic individual

techniques• Ha: Detaching

o Breaking with traditiono Finding new ways and techniques

• Ri: Fluento Complex, integrated knowledge and

techniques

Mastery

ShuHaRi

Adapted from Alistair Cockburn, http://alistair.cockburn.us/Shu+Ha+Ri13

People are in the most happy when they’re in a state of flow.Mihaly Csikszentmihalyi

Purpose

14 Dan Pink, www.danpink.com

Intrinsic Motivation“I want to master TDD to become a better, more confident developer and earn my peers’ respect.”

Extrinsic Motivation“I want to increase my skills to get a raise and a promotion by meeting my objectives.”

Long

-Ter

m E

ffecti

vene

ss

“The most deeply motivated people… hitch their desires to a cause larger than themselves.”Dan Pink

Aligning Work with Purpose

15 Turn the Job you Have into the Job you Want, Harvard Business Review, June 2010

Work should align and be proportionate with one’s inherent areas of Passion, personal Strengths, and overall Motives.

Roles and job responsibilities are based upon strategic objectives. Boxes sized by time allocation link work to core job Roles.

Extrinsic Motivation

• Fair Base Salary – Core wages should be fair for the market; basic financial security provides personal safety and allows for productive risk-taking.

• Fair Merit Pay – Extraordinary efforts and results should be rewarded in proportion to contribution, risk & returns.

Money Does Matter

While a learning organization will always trump one driven by short-term gains, money still matters.

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Individual

Link Merit Pay to Business Results

IndividualTeam ResultsBase Pay

Team Results

Base Pay

IndividualTeam Results

Base Pay

70%

20%

10%

Scrum Team Member“Help my team to build a successful game as judged by a score of 85 or above on Metacritic.”

Sales Rep“Optimize our sales channel as

measured by a 20% increase in North American sales.”

40%

40%

20%

DevelopmentManager“Build a high performance team as measured by Customer Satisfaction scores of 9 or above.”

50%

30%

20%

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Intrinsic motivation should be complemented with concrete

Extrinsic goals, fair recognition and just rewards.

Example Business Results

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Product Goals Original Current Target Improvement

Minimize Termination Cycle Time

40 hrs. 8 hrs. 4 hrs. 80%

First-Pass Accuracy 60% 95% 100% 58%

Minimize Drop-Out Rate

96% 60% 50% 37.5%

Minimize Application Response Time

5s 3s 1s 40%

A Holistic Process

Roles

Individuals & Teams perform within and evolve the APMS.

Managers set up, maintain and nurture an APMS.

Customers and Users provide requests and critical feedback on results.

Manager

Users

Customer

Individual Output

Team

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Establish Objectives

Requests

Defining Objectives

Manager

Users

Customer

Individual

Rate

Team

Extrinsic ObjectivesIntrinsic Objectives

Team Objectives

Individual Objectives

Subjective Output Measures

Objective Output Measures

Establish Reward Structures

RequestsEstablish Objectives

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Rate

Rate

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Feedback Cycle

Manager

Users

Customer

Individual

Rate

Rate

Rate

Output

Rate

Deliver

Team

Feedback on Extrinsic MeasuresFeedback on Intrinsic Measures

Managerial Rating of Contributions

Team Rating

Self Rating

Customer Ratings of Team Interactions

User & Customer Rating of Output

Feedback can come through many different complementary forms, and at different levels.• Holistic, Iterative Discovery – Whole-team

involvement in both product and process understanding & evolution. Group Product

• Agile Maturity Assessments – Inspection of trends in structure, process and/or output quality within and across teams. Group Process

• Micro feedback – Quick, Twitter-style observations & suggestions given in real-time. Individual Performance

Emerging Trends in Feedback

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Improving Agile Performance through Holistic Performance Management

Common Challenges in Agile Projects CountermeasuresMaintaining individual motivation and passion

Create personal objectives that link intrinsic motivations to external outcomes

Ensuring objective definition and validation of “Value”

Have POs & Teams define “Value,” while Customers & End users validate it

Maintaining whole team energy & accountability

Measure Teams as a unit, and quantify Output quality as an extrinsic measure

Encouraging active process adaptation & continuous improvement

Reward incremental improvement &Innovative tactics by measuring outcomes, while giving feedback on processes

Enhancing Product Owner/Customer focus and participation

Tie rewards for both PO and Team to Team Outputs, encouraging collaboration

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Contact Us for Further Information

Sanjiv AugustinePresidentSanjiv.Augustine@LitheSpeed.com

Arlen BankstonExecutive VPArlen.Bankston@LitheSpeed.com

On the Web:http://www.lithespeed.comhttp://www.sanjivaugustine.com

Overall Process

Process Step Participants TimingProcess InitiationEstablish reward structure PO, Team and/or Management Start of quarter

Establish extrinsic measures

Product Owner, Team & Management

Start of a Release or initiative

Establish intrinsic measures Individual, Team & Manager Start of quarter (adjusted incrementally)

Ongoing Feedback & Compensation CyclesReview intrinsic measures (updating as necessary)

Individual, Team & Manager Retrospective & real-time

Review extrinsic measures(updating as necessary)

Users & Customers Retrospective & real-time

Distribute rewards Manager Quarterly

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Sample Human Rating Objectives

Team Individual Manager Customer/POCustomer/PO Satisfaction with Team Collaboration

Individual Contribution to Product Delivery

Individual Contribution to Product Delivery

Provided clear vision and direction to Team

Stakeholder satisfaction with deliveries

Individual Contribution to Process Improvement

Individual Contribution to Team Building

Engaged effectively with external users

Consistency of meeting Sprint commitments

Individual Contribution to Organizational Flexibility

Individual Contribution to Enterprise Collaboration

Engaged effectively with internal stakeholders

Demonstrated process improvements

Individual Contribution to Group Learning

Individual Contribution to Group Learning

Provided timely & relevant feedback on product to Team

Effective collaboration among members

Individual Contribution to the Product

Individual Contribution to the Product

Prioritized effectively to optimize value

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Feedback is simple observation of current events, facts and perceptions, offered and discussed without judgment or direct impact to compensation.• What were the major events of the year?• What have been the major accomplishments?• What new skills have you acquired?• What have been your struggles?• What contributed to those situations?• What insights do you have, looking back on the year?• What are you most proud of?• How does this inform us going into next year?• What do you want to do better?• Are there new areas you want to explore?• What skills or capabilities will you develop?• How can we build developing those capabilities into daily work?• How will we tell you’re making progress?

What is Feedback?

Thanks to Esther Derby for these questions: http://www.estherderby.com/weblog/archive/2004_11_01_archive.html29