Shifting to Iterative Performance Flow (Agile HR – Q&A Series Part 2)
This post is part of the Q&A Series: Agile Leadership Webinar «Agile HR | People Operations».
We recently hosted Agile HR expert Fabiola Eyholzer for our Agile Leadership Webinars. In response to the high interest, Eyholzer is answering an aggregation of the great questions we received from participants during the webinar. Click here to watch full webinar.
In Part 2, Eyholzer answers your questions about performance management in Agile organizations. If you have a question you would like featured in our Q&A Series, please submit to email@example.com.
Performance cycles are generally annual or semiannual. What cycles are appropriate in an Agile world?
Considering the accelerated pace of today’s business world, it is increasingly difficult to set meaningful goals on an annual or even semiannual basis. We need shorter cycles with an optimal balance of responsiveness, predictability, and reliability. Iterations are the new performance cycles.
Many organizations are doing away with the bell curve. What are your thoughts?
I absolutely agree. Bell curves (a.k.a. forced distribution, staked rankings) are demotivating, unnecessarily aggressive, and damaging to human relationships. Ten percent of Fortune 500 companies have already eliminated employee appraisals. Among them is GE — the original champion of the bell curve.
Can eliminating appraisals demotivate a good employee from giving her best?
Quite the opposite. Objectives are replaced by meaningful stories, annual reviews become an ongoing dialogue, and improvement plans turn into interactive learning and growth. By doing this, we are engaging with people on a completely different level. That is inspiring for people and taps into their intrinsic motivation.
What is the most effective way to evaluate and get feedback of an employee?
In Agile, we don’t want to “evaluate” people. Instead we want to be forward-looking and focus on strengths. What we want to do with employees is more important than what we think of them. Every people leader must be able to answer questions like, “What would we do if that person quit today? Would we try to keep them — and if yes, what would it take?” That requires them to have regular dialogue to discuss personal learning and growth potentials.
What do you mean by continuous feedback?
Relentless improvement is an integral part of any learning organization. Feedback conversations cannot only take place once or twice a year. We need to fundamentally increase the frequency but also the intensity and quality of feedback. That means shaping a culture of mutual respect where candid dialogue and continuous feedback is consistently happening. Feedback comes in different forms and structures. But feedback is not something only given from manager to subordinate. The power of feedback is in everyone’s hand.
Do you think 360-degree feedback could successfully take over traditional appraisal?
No, it cannot. A 360-degree approach is often lengthy and inadequate. We assume that ratings measure the performance of the rate, but they actually reveal more about the rater. Studies show that 62% of a rating depends on the individual rater. The actual performance only accounts for 21%. A 360-degree approach with many raters does not rectify that — it remains an inadequate appraisal.
What criteria should be used to evaluate people and teams in an Agile setting?
The focus is no longer on assessing individual goals and looking back. Performance flow is about continuous improvement — not only on a personal but also on an enterprise level (a part neglected in traditional performance appraisals). Agile ceremonies like reviews and retrospectives are all about inspecting and adapting.
We measure results to understand where we stand and whether we are moving into the right direction. It also helps us be accountable. Key performance indicators (KPIs) become indicators again. And we don’t measure things to set compensation and shape a career. An example: Velocity is an invaluable indicator. But it makes terrible appraisal criteria for compensation and promotions. That is why we decouple performance management from HR instruments.
If we have seven business units, and each unit has its own portfolio manager, how does HR evaluate each portfolio performance? What are the criteria to do that?
It is not the task of HR to evaluate (portfolio) performance. This is the responsibility of Agile Teams and teams of teams. As criteria, they choose a set of metrics that gives them the data needed to continuously inspect and adapt.
What role would HR play in helping individuals improve their performance, if any?
We empower people to be in charge not only of their work but also of their own development. That is why HR takes a supporting role. HR assists leaders, acts as career coach to employees, and provides active learning platforms. The latter includes embedding knowledge building into the work flow. Examples of this are FedEx Days, hackathons, Wicked Wednesdays, etc.
How do you report someone who is not engaging or acting as part of the team? How do you handle situations where an individual negatively influences the team?
Performance (and behavioral) issues must be dealt with immediately — there is no point in waiting for an annual review to come up. Agile Teams often handle challenges directly or, if need be, engage the help of their ScrumMaster or Agile coach. Other cases are escalated to the manager, and he or she must act. And, yes, this may mean transitioning people to a different team or releasing them back into the work space. Such a decision cannot be delayed (the motto is: “Hire slow, fire fast”).
What type of paperwork do you provide or fill out for performance reviews via iterations? And how does HR collect the data?
There are different types and levels of documentation — and not everything is reported to HR. Ongoing feedback between manager and subordinate, as well as among peers, is between the involved parties. We want the focus to be on the feedback part, not the implications it has on any HR instruments. Agile Teams document some information in their retrospective; other interactions go undocumented. More structured feedback loops typically only involve a message to HR that the conversation or exchange has taken place. HR is not privy to the details. But HR is documenting the individual learning and growth profiles.
What kind of transition do you recommend?
An iterative approach. It starts by analyzing the current process, clarifying the reasons for change, and describing the desired outcome. The book Below Expectations: Why Performance Appraisals Fail in the Modern Working World and What to Do Instead, by Armin Trost, provides valuable tips to guide that discussion. This helps to identify and verify possible methods that might work for the organization. Any chosen solution must be aligned with their corporate values and Agile/people approach.
Fabiola Eyholzer (CSPO, SPC 4.0) is an expert and thought leader in Lean/Agile people operations — the 21st-century HR approach — and CEO of Just Leading Solutions, a New York-based consultancy for Agile HR.
Feel free to connect with Fabiola via Twitter (@FabiolaEyholzer) or LinkedIn (linkedin.com/in/fabiolaeyholzer).