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Does Agile Limit Financial Rewards for an Individual?

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Tom Reynolds mentioned an interesting comment, that he had heard about the reluctance of people to move to Scrum. The reason quoted was that Scrum would have a direct impact on their financial rewards as it places a lot of emphasis on the team and not the individual.

Tom seemed to agree that determining the financial rewards is quite difficult in Scrum. According to Tom, if the rewards were based on the individual performance, then it could lead to a hero mindset and people would be more concerned about their own work rather than helping the team. On the other hand, if the financial rewards were distributed in the team based on the team performance, then on the positive side, it would lead to workload sharing, information sharing and people willing to support and help each other. Does it also lead to weaker team members hiding away? According to Tom, that is not the case,

This in fact may draw them out more quickly, people will need to be on the top of their game and be adding value to the team in the best way that they can for the team to succeed and in fact may breed higher performing teams.

Tom, acknowledged that though rewarding the team might sound simple but it is not. Tom suggested a combination of team and individual rewards,

Will we ever get to rewarding by team as opposed to individual? I don’t know, maybe there is some aspect of this already with team bonuses and maybe they need to co-exist along with individual reward as opposed to individual rewards being replaced. Maybe we need to find a happy medium that recognizes and rewards the team, with team work being paramount but can also recognize and reward individual excellence as long as it is not to the detriment of the team or encourages hero behavior.

On the extreme programming group, Eliga Repoleved had a real life situation quite close to the scenario described above. Eliga had a question about the best way to ask for a salary raise in a Scrum team. According to him,

I've recently been promoted from Sr. Software Engineer to the lead position --but without an increase in salary -- despite successfully helping the team reach a high level on most of the agile practices. [...] Any tips on convincing the manager on helping me get a raise?

Dave Rooney suggested that though Eliga might have been instrumental in introducing helpful practices, the team could have refused to use them. Hence, if there is a financial reward, it should be equally distributed within the team. He also suggested a democratic alternative where the team decides the payout.

Tim Ottinger suggested that Agile teams are breeding grounds for learning, growing and becoming more valuable. He suggested that if a person is making enough his value would increase in an Agile team irrespective of whether he is rewarded as an individual or as a member of the team.

D.André Dhondt suggested that one should do a market research to see if he is in the correct salary bracket.

Asking for a raise is touchy, especially in a team environment--but if you're not in the right ballpark salary-wise, you may be feeling unfairly treated. Fix that or it's bad for the team too.

Ilja Preuß suggested that though defining payouts on team performance is much better than individual performance, however, this could also lead to a situation where internal teams in the company are competing with each other. According to Ilja,

I agree that it’s good to emphasize team performance over individual performance. What I’m saying is that *company* performance is even more important, and therefore probably should be the primary factor for determining salary.

Thus, there does not seem to be 'the one right way' to financially reward an individual. It is a delicate issue which needs to be handled in a similar way. As Tom put it,

Individuals still want to be paid for their job and generally speaking have been conditioned into thinking that if I’m good and do a good job my salary will increase and will increase more than someone who is not perceived to be as good so people clearly have fears about moving to a more team motivated environment and how this personally affects their salary review, this was the comment that I heard so needs to be addressed in some way.

How are you addressing this issue in your organization?

Read a related post “Distributing Bonus to Agile Teams is Like Playing with Dynamite

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