Roy van de Water,  Derek Neighbors, and Kane Mar Discuss:

• Star teams over star individuals
• Need for individual performance reviews?
• Team decisions
• Individual and team compensation, now and in the future
• Cultural change in organizations
• Ways to give individual feedback

Transcript

Roy van de Water:  Hello and welcome to another episode of the “ScrumCast”. I’m Roy van de Water.

Derek Neighbors:  I’m Derek Neighbors.

Kane Mar:  And I’m Kane Mar.

Roy:  Today we will be talking about Performance Reviews.

Kane, in the past I’ve talked to quite a few managers, who want to figure out who the star performers on their team are. What advice would you give somebody asking that type of question?

Kane:  That’s a difficult question to start up with. To be honest, working in an agile environment, it’s very difficult. In large profit projects, it’s a different system. My advice, quite honestly, would be to measure team rather than the individual. So, look for star teams rather than star individuals.

Derek:  What if somebody comes back and says, “Well, wasn’t that a little bit of a communist view? How am I going to motivate the troops, if there’s no incentive for them to perform better than someone else?”

Kane:  It is up to every [inaudible 01:14] for the individual as well. In our spa, the incentive is intrinsic rather than extrinsic. In other words, it’s self motivating incentive, the ability to create a great product, to have that great product out there on the market place, seeing use of that great product. In large part that’s the big benefit or one of the huge benefits of doing Agile software development rather than a large paycheck at the end of the day.

Derek:  I’ve seen a couple of teams where they start to question, is it really even worth doing individual performance reviews? If it really is more intrinsic motivation and it really is, you’re trying to measure the performance of the entire team or the entire organization, do you think there might be a time when we’re not even doing individual performance reviews?

Kane:  I would love to see that. Quite honestly, I think that would be beautiful thing. Unfortunately, I have also realized that this is in large part the real world and many organizations will struggle with that. Many organizations already do struggle with that.

Do I think that we will realistically get there? Honestly, I think that would be very doubtful. However, having said that the closer we get, I would push for it myself, but I wouldn’t necessarily expect that to be the case.

Derek:  So taking it from a different perspective, instead of having the performance reviews in place as an incentive, what if I have a new position that has opened up, like I have a position for a Scrum Master or I have a position for a product owner or maybe even a C‑level position, how do I decide who to promote and bring up to that position when everybody on the team should be treated as the whole team?

Kane:  I’m a big fan of actually giving it a shot, trying it and seeing. You may get some good results, you may get some disastrous results, but you’re never going to know unless you actually try that.

Derek:  You mean to have the entire team have that position or just pick somebody and see what happens?

Kane:  Speak to the team. Ask the team who they would like to be their CIO, CEO…

Derek:  Oh, I got you.

Kane:  …if that’s what you need, and so have the team make that decision, and have a discussion about that, but unless you actually try that, you’re never actually going to exactly know who the best person actually is going to be.

I’ve come across instances in the past where someone who I thought might be an ideal CEO turned out to be someone who was not an ideal CEO, and vice versa, and I think that is a major consequence of just being a human being, sometimes what we perceive is not really the reality.

Try asking the team, they’ll have a much better idea of who a good…or what they’re looking as part of the CEO, and so ask the team and have them have their feedback, and then go with that and see how that works.

Derek:  I absolutely think you’re kind of speaking our love language where we’re very much about “be human.”

But why do you think it’s so hard for management in organizations to actually do the human thing, why do you think they revert back to behaviors where they don’t ask the team who they think should be in charge or who should be in a particular position, what do you think inhibits them from doing the thing that would seem to be so natural to do?

Kane:  Gosh. [laughs] I’m not really sure how to fully answer that one, as you will, to give you an honest answer, I think a lot of it comes down to greed, I think a lot of is tied to “hey, at the end of the day,” and to a certain extent we’re all somewhat selfish.

I know this myself. I’ve acted in a selfish way in the past, and I think that provided that we have systems in place that gear towards people’s greed and selfishness then I think it would be very difficult to walk away from that.

Derek:  It might also potentially be a situation of arrogance. Where if I am the CEO or whatever position, like I should know best, right? I don’t want to defer to my team because I should know better than them because I am in a higher position, so I am going to make the decision to

[crosstalk]

Derek:  Not justifying it, but that may have some part of it.

Kane:  Yeah maybe, ego, absolutely. Ego is probably a very big factor in that sort of decision making as well, absolutely.

Derek:  In an environment in which you rate the team instead of individuals, how do you choose individual pay? How are people’s salaries going to work?

Kane:  Everyone should have a based on individual pay to be honest, because everyone is different. We all have different skills, and different skills are valued differently in the marketplace. I have no qualm about individual pay, and individual pay being different for every individual on the team.

That is a real reflection of the real world. In that regard, I don’t have an issue with that at all. Any incentives on top of that however need to be done on a team basis. In other words, if the team is successful in meeting their accomplishments, whatever those accomplishments shall be, they should be rewarded as a team, rather than on an individual basis.

There should be some element of individual compensation, but there should also be some element of team based compensation.

Derek:  How do you decide which individuals make what? Like if you’re going to have individual compensation, how would I choose to pay one developer or one employee more than another?

Kane:  My favorite way of doing this is to make it totally open. In other words, to have compensation transparent.

I admit, that’s a totally radical, for most organizations, that is a totally radical suggestion. However, having said that, if you make it totally transparent, then the notice is on the individual to justify his or her salary. Say if you have a developer that is making twice as much as a tester, unless they can justify that, then maybe they shouldn’t be making twice as much.

Derek:  I’ve seen that. A couple of instances too, where, as we move into 21st century work, we have to challenge what we consider compensation. I have seen a lot of employees choose potentially more time off, or more flexible schedules, or various other forms of incentive or compensation that they prefer over pay.

They actually would take a lower pay to have a more flexible schedule or be able to work on product or projects that are more meaningful to their direction in life, and we are just scratching the surface when we’re talking about preference problems and the sense of incentive, performance, and compensation are all going to be in a pretty serious flux in the next decade or two, as the market heats up for talented, creative, knowledgeable workers, and the supply is not there for the demand.

I am curious as to see where it’s going to go I guess…are you seeing some weird things out there in the organizations you are working with?

Kane:  Absolutely. It’s not only things you have mentioned, and those absolutely will be impacted, but there are also things like people’s titles, career paths, I think all of those things will be impacted. Certainly, with the small to medium companies that I tend to enjoy working with, that does tend to be the direction that they go. In other words, they tend to go towards much flatter structure, with a much more open mechanism for compensation and pay.

Derek:  If, for a small company, I could see making this type of transition to such a radical new approach to individual compensation and performance reviews on a whole team basis instead of on a usual team basis .

But how would you work on something like that if you are on a smaller agile team within a larger organization and that organization has a strong culture of individual performance, or has a demand of having a certain number of employees promoted out of the small team every so often, or something like that. What would you suggest to those types of teams?

Kane:  In any situation like that when you’re trying to introduce and agile approach within a large organization, you have to be prepared for the fact that there is going to be some culture change that is necessary to accommodate the agile team. I wouldn’t expect the cultural change to be something that happens overnight. In fact it takes anywhere from two plus years for that to happen effectively within a large organization.

However, having said that, you do need to start having that conversation, because unless you start having those conversations with the HR organization, things will never change. Unless you actually sit down with the HR organization and say “look, these are some of the impacts.

We would like a team‑based bonus rather than an individual bonus. We would like to have a flattened hierarchical structure, in other words, fewer titles, rather than a very structured team”. Unless you’re willing to have those conversations then nothing within the organization will change.

My feeling is that for a team to be truly successful with an agile approach within a large organization, then the large organization has to acknowledge some of those differences and actually start addressing them.

Derek:  Another part of performance reviews is giving people a feedback mechanism on how they can improve as an individual. When it comes to incentive, I don’t think it makes sense to have individual incentive on team based work. There’s probably definitely still room for improvement on an individual level within a team.

How are you seeing teams give each other valuable feedback to improve as individuals when there’s not that mechanism of a regular performance review to hand that feedback back to them?

Kane:  Let’s be clear, traditional performance reviews are almost entirely political, and the feedback that they give is often given back for political reasons. I say this from personal experience.

I spent maybe 22 years of my life within large organizations doing exactly those types of performance review. I would say that the feedback given during those performance reviews tends to be very, very negative rather than very positive. I would be cautious about that myself.

A better approach is to have people to provide feedback on an ongoing basis. Quite honestly, within an agile team, the best feedback I can get from an agile team is if the team said to me “look, Kane, we want to work with you on an ongoing basis”. That’s fantastic.

However the opposite is also true. If the team comes to me and says “Look, Kane, we don’t think you’re working out. We would like for you to leave the team”, for me that’s a clear indication that I need to change my behavior and improve my performance.

Real feedback coming from people that I work with on a day‑to‑day basis is far more valuable and more hones too than feedback you might have from a performance review maybe once a year.

Derek:  Is there anything that you would like to promote or anything that you’re currently working on that you would like to promote?

Kane:  I do have a newsletter where I talk about these issues, and well as other agile issues. It’s called The Scrum Addendum. You can find it at my website: Scrumology.com. If your listeners would like to hear more about these types of issues feel free to sign up.

Derek:  Thanks for joining us!

Kane:  Thanks very much. Bye now.

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