What Is Agile Performance Management?
Performance Management is one of the most important questions of the organizations that transform the new operation model with Agile perspective and methods. In fact, at the end of the day, it is one of the most difficult areas where the experimental approach is applied, as it affects the financial gains of our colleagues.
I Am Faced With Many Questions On This Subject Every Day:
What are the effects of using the current performance appraisal method?
How do we differentiate people when working in empowered, autonomous teams?
How do we align individuals with the company’s goals?
How will we distribute premiums to people?
How do we raise people in the hierarchy?
I’m getting dozens of questions similar to the ones above. First of all, let’s start with how organizations have transformed into a structure with the new operation model. As my friend Mehmet Yitmen mentioned in detail in his Agile Performance Management, we can define the new operational structure from the traditional function-based structuring to the value-oriented team-based structuring where different competencies come together.
Therefore, in this new structure, we are transitioning to a management and value structure based on cooperation and team play, rather than a hierarchical, top-down management approach. In such a case, performance evaluation methods, which are the product of the traditional thought system, unfortunately lose their validity in this new order.
When We Examine The Characteristics of traditional performance management:
It is designed for hierarchical environments,
There is very little feedback loop,
Generally, targets are set one-off at the beginning of the fiscal year.
Goals are given from top to bottom
And that the emphasis on approval/evaluation is too much.
The main focuses of performance evaluation approaches of new generation Agile organizations should be as follows:
Cooperation and team play
Continuous feedback mechanisms
Supporting development and investing in learning
Supporting the experimental perspective
I have listed the basic principles that you should consider when designing your Agile Performance Management approach as follows:
Should Support Value Production
The measurement criteria of a value-oriented organization should also be value-oriented. Therefore, you should use simple, plain and concrete metrics to support this. Customer Satisfaction, Innovation Rate, Lead Time, Error Rate, Code Quality etc. can be given as an example.
A small number of metric sets are good to target. It is important that these selected metrics are aligned with organizational goals. Allowing teams to set their own metrics and goals will support the empowerment and experimental approach. Review metrics regularly and update targets as needed. (Ex: Quarterly based)
Encourage Team Play
Teamwork is the most important character of Agile-based environments Performance. Therefore, your measurement method should also support team play. At least 60% of the goals must be the responsibility of the entire team. It will be highly beneficial if you prioritize solving problems as a team, rather than just focusing on metrics.
Should Support the Development of Individuals
Your performance appraisal method should also support the development of individuals. You can raise awareness in individuals with these goals, with regular feedback from the team. Thus, personal development points that will contribute to teamwork of individuals are determined. Practically, you can identify these areas of improvement with the 360-degree feedback method.
Agile Culture should be Disseminated
While metrics provide measurable and tangible data, they can mechanize the evaluation method. Therefore, parameters such as values, mentality and behavior, which we cannot always measure concretely, should be a part of the process.
This dimension can even be used to measure individual Performance contributions. That is, you should evaluate individual contributions not just by metrics, but by the behavior, values, and mindset that the organization supports. Organization leaders have a great responsibility in this regard.
Agile work is; It is the organization’s work in two-week periods, which we call sprints in the literature, by applying certain rules. In Agile, these rules are called agile rituals. So what are these rituals? As an example of these rituals.
The point I want to underline here is; A traditional silo-based organization can also operate agile. That is, it can successfully implement all the rituals I have mentioned, but it cannot have an agile organizational structure. So, in addition to this, what does project-based agile work that we usually hear a lot mean?
I would like to explain it briefly. Project-based agile work is also within the organization; means establishing fixed-term, cross-functional teams and working them with agile methodology. In project-based agile work, it is not expected that the people who will take part Performance in the teams will be assigned full-time. Rather, they often work part-time.
Selin Çınar Tunguç: Well, what are the reasons that have made the concept of agility one of the most important items on the business agenda lately, and is there an average added value increase provided by an agile structure to companies?
Sea Bearded:Of course, we observe that the concept of agility creates significant value for companies under 3 headings. The first of these; natural acceleration. Factors such as digitalization, changing customer expectations faster than ever, gaining power in different sectors of the new players we call distributors; In fact, it pushes companies to ask questions such as how can I launch a new product in two months instead of two years. No company can afford to wait a year to develop a new product anymore.
One year later, you already see that; either that customer need may have completely disappeared from the market or your competitors may have already developed these products and made serious gains. In this context, we observe that large companies, large-scale companies, especially turn to agile for this acceleration.
Departments within the organization
Abroad and Turkey In the examples we worked with, we observed that the organizations accelerated 2-3 times after switching to agile. This speed arises not only from getting a certain job done in a shorter time, but also from quickly dissolving the dependencies between departments within the organization.
We can see customer satisfaction as the second gain. In today’s world where customer needs are changing faster than ever before, satisfying customers is now the first priority of organizations. This is where agility comes into play. Most of the teams work completely customer-oriented.
In certain cases, they even treat customers as a member of the team, as a part of them. Again, in the examples we studied, we observed increases of up to 20 percent in the MPS index, which measures customer satisfaction of agile organizations.