Why Did We Stop Annual Performance Reviews When Adopting Agile?

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This presentation gives a bit of background information as to why the Hyperformix development team (now acquired by CA Technologies) discontinued the traditional annual performance review system when they switched to an agile development philosophy/mindset.

The blog post with additional information is located here: http://www.multicastmatt.blogspot.com/2013/03/why-did-we-stop-annual-performance.html

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Why Did We Stop Annual Performance Reviews When Adopting Agile?

  1. 1. Agile Austin Leaders SIGAGILE PERFORMANCE June 1, 2012 Matt Roberts REVIEWS? matt@matt-roberts.com Twitter @multicastmatt linkedin.com/in/cpgmattr
  2. 2. DE RIGEUR DILBERT FURTHER DISCUSSION
  3. 3. KEY TAKEAWAYS (THE FINE PRINT) To run an agile organization, managers need to understand that ―traditional*‖ techniques for ―managing‖ people simply are not effective and modern** principals must be adopted. By understanding what motivates knowledge workers and leading them, your teams will constantly adapt and grow, delivering higher and higher value to the company. Many other positive side effects will emerge. By constantly following these principals, you will either bring massive organizational value (happy teams delivering high value work) or get fired. Possibly both (keep this in mind— seriously)*What we call “traditional” came out of mass production eraof 1930s and 1940s driven by companies that needed toscale for war effor ts and had unlimited demand —therewasn’t anything scientific about it.**Modern as of 1950 (yes, seriously, it’s been a while)
  4. 4. PERFORMANCE REVIEWS DESTROY VALUE IN AN ORGANIZATION OF KNOWLEDGE WORKERS What they are  Gamed (by EVERYONE)  Subjective to the manager  Awesome at destroying trust that is critical for individual contributors and managers to operate effectively in rapidly changing conditions  A fantastic way of giving the HR organization undue power and influence  Throw-away work for all involved (i.e. WASTE) What they are not  A good way of assigning raises  Fair (to ANYONE)  A way of attaining agility as a business  A good way of new managers to learn about incoming individual contributors to their team.
  5. 5. AN ALTERNATIVE – THE PERFORMANCE PREVIEW* Almost everyone in Hyperformix was on a Performance Bonus System tied to quarterly corporate goals.  Laid down by the Board of Directors  Negotiated with Senior Management Team  Worked with Individual Contributors (IC) to create alignment  3 meetings per quarter between manager and IC — beginning, middle, end (I added one in the middle to make sure that the IC was on track)  Managers could not achieve 100% without their teams achieving 100% (aligning performance incentives)  This created another level of alignment with the business goals and what people did. Yes, we already had Scrum that did that for us as well as a team focused on Agile values and principals, so almost all of these were HIGHLY paid out.  I still had a problem with it, but it didn’t completely suck*‖Performance Preview‖ taken from G et R i d o f t h e Pe r f o r ma n c e Rev i ew , b u t t h e s y s te mw a s c r e a te d i n d e p e n d e n t o f t h e b o o k .
  6. 6. MANAGER QUARTERLY GOAL – BEGINNING OF QUARTER
  7. 7. MANAGER PERFORMANCE – END OF QUARTER
  8. 8. INDIVIDUAL CONTRIBUTOR QUARTERLY GOAL – BEGINNING OF QUARTER
  9. 9. INDIVIDUAL CONTRIBUTOR QUARTERLY GOAL – END OF QUARTERCategories of IC arethe same Additions as the During Manager Quarter Removal During Quarter
  10. 10. THE ELEPHANT ON THE ROOM – APPRAISALS AND COMPENSATION BY MARY AND TOM POPPENDIECK YouTube Video http://www.youtube.com/watch?v=M SYlqx1Yvqk .PDF http://bit.ly/XOLWcI
  11. 11. MATT’S VASTLY INCOMPLETE READING LIST FOR THIS SUBJECT AREA Peopleware Tom DeMarco and Timothy Lister Get Rid of the Performance Review, Samuel A . Culbert with Lawrence Rout Slack Tom DeMarco

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