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How to Use Feedback with Performance Appraisals for Agile Enterprises

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Questions can arise if changes are needed in the way performance appraisals are being done, when enterprises implement agile ways of working. Performance management and rewarding processes in enterprises are often done top-down with a focus on individual results in stead of team contribution and collaboration. Several authors have suggestions on how you can use feedback next or as a replacement for existing appraisal processes, to improve the performance of individuals and teams.

Naresh Jain wrote a blog post in which he explains why you shouldn’t mix employee performance and salary appraisal. He states that performance issues should be dealt with directly:

If someone is not performing, they are simply not meant for the job at hand. We can help them by mentoring and guiding them. We can let them select a different project. But after the best of our efforts, if they can’t cut it, they should leave. Its best for both; the organization and the individual.

He describes how adopting agile teams in an organization ca contribute to separating out individuals who are not performing:

In fact, on many highly collaborative teams (like Agile teams) poor performances can’t find a place to hide. They very quickly realize they can’t survive in such an environment. Even before anyone does anything, they are gone. So once we’ve got rid of the employees who don’t fit into the team/organization from a performance point of view. We are left with a bunch of high performers. Remember there will always be a range in terms of performance. But the range should be too small to be worried about it.

Naresh suggest to setup a 360 degrees feedback process to help employees to give and get feedback, and improve themselves. He call it “Rule of least Surprise“:

Nothing discussed in a feedback meeting with your reporting manager should be a surprise. It should be something that was discussed on the shop-floor with folks working closing with you on the floor.

In the Forbes article time to scrap performance appraisals?, Josh Bersin mentions several problems that he sees with annual review processes, like:

Employees need and want regular feedback (daily, weekly), so a once-a-year review is not only too late but it’s often a surprise.

We work with many leaders and peers during the year, so one person cannot adequately rate you without lots of peer input.

People are inspired and motivated by positive, constructive feedback – and the “appraisal” process almost always works against this.

He states that companies are deciding to do away with traditional performance ratings:

Organization structures have changed and companies need to be more agile.  We have a shortage of key talent and the keys to success now focus on regular alignment, coaching, creating passion and engagement, and continuous employee development.

Last year InfoQ published an agile talent development and adaptive career framework by Pat Reed. The article describes what can be done to adapt talent management to collaborative ways of working that are an integral part of agile. Pat states that “performance management processes and systems are seriously broken”:  

Annual evaluations are generally demotivating and focus on weaknesses rather than strengths. At best, they distract us from focusing on delivering customer value and generally result in negative behavior which could compromise team effectiveness and organizational health.

According to Pat, frequent feedback can help to improve the way that you do performance management in enterprises:

Invest in training and coaching managers to incorporate performance and career conversations in weekly 1:1’s and ensure that  leadership development, career coaching and frequent recognition, praise, and both constructive and positive feedback with their direct reports are part of their performance and are rewarded.

In myth #5: We can and must have an objective ranking system, Johanna Rothman explains why ranking systems do not make sense to her:

People contribute to the best of their abilities. If they aren’t contributing, it may not be their fault. If you think ranking systems are useful, first ask yourself these questions:

  1. Are people receiving adequate and timely feedback about what to continue or change?
  2. Do people have the knowledge to do their jobs?
  3. Does the organizational system, the environment, allow them to contribute to the best of their abilities?

Johanna describes how feedback can be an alternative for the ranking system:

People need feedback. They need feedback primarily from their teammates in an agile organization. If you haven’t transitioned to agile and you, the manager, are assigning work, your team members need feedback. They need to know how they are doing, and a ranking system doesn’t tell them that. If their contributions aren’t adequate, they need to know. If their contributions are outstanding, they need to know that, too.

Chris Sims blogged about the need for agile enterprises to have performance management systems in managing the performance of scrum team members. For problems with involve one or two employees, he suggest to implement regular feedback and deal with the issues directly. Additionally, there can be a need for performance management:

If you decide that a performance management system is appropriate, then you need to be clear about what kind of “performance” you want. If you are doing scrum, then what you want is high-performing scrum teams. Start with this as the goal, and shape a performance management system that will increase your chances of getting team-oriented behavior from your employees. If you build a performance management system that rewards heroes and rock stars, you will get people who spend their time focused on looking better than their teammates, instead of collaborating with them.

Performance management systems for agile enterprises can support employees to increase their contribution in teams:

Of course, teams are made up of individuals and we want each one to be a strong as possible. For this reason, I suggest a performance management approach that focuses on helping individuals grow their skills. This can be done by building on strengths, shoring up weaknesses, or by expanding in to new skill areas so that they can contribute in new ways.

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