After I received the feedback on my Agile 2014 talk on Performance Appraisals without a number, I realised the talk missed the mark for some people. At first I blamed the attendees who obviously didn’t ‘get it’. But now I realised I’d given a talk about my solution to performance appraisals in an agile team, rather than sharing what I have learned about performance appraisals and managing people that would help others design their own solution.
So here it is, what I’ve learned about managing performance…
1. You don’t need to manage performance. As an employee I have never been motivated to do anything in my job because of a performance management discussion. Just give people feedback, and create an environment for them to thrive and they will manage themselves.
2. You don’t need to measure people or their performance. People are far to complex to be measured by a simple metric. Imagine measuring people’s height and using it as a performance metric. It’s laughable right? Well actually so is just about any other measurement you can come up with. Don’t measure the people, measure the important things like customer satisfaction, lead time, profitability.
3. You don’t need team performance appraisals with agile. They are built in. In the review, users get to tell the team what they think of the product and in the retrospective team mates get to tell each other what they think about the process. Rather focus on making these meetings functional than introducing a team component on performance appraisals.
4. Performance appraisals are harmful. If you can abandon them completely, then do so. My talk showed what I did because I couldn’t abandon them completely, but the net result is I filled in a spreadsheet for HR instead of doing performance appraisals. It was at least a compromise that didn’t impact my team. Yes I was gaming the system, because I didn’t have the influence to remove them, but at least I removed the impact of them on my team, who were blissfully unaware.
5. People are not motivated by money. You don’t need to pay star performers more than other people. The only star performers I paid more were the ones who were significantly underpaid compared to their peers. Pay people a good enough salary that they don’t worry about it, and make it a great environment.
6. Ratings don’t determine increases, business does. Let’s all stop pretending that ratings are actually what determines increases. In every job I’ve ever had the business looks at their profitability and costs and comes up with a budget for increases. Each manager is given a bucket to spend as they see fit. We then have a complex process of rating people that ends in Bob getting 1% more than Mary. It’s pointless. There is much more variation based on the size of the bucket than on the ratings. As a manager use your discretion to split the pot in the most fair way. If people want to be paid more, they can all help make the increase pot bigger by making the company more profitable.
7. The only thing you need is feedback. As a manager your job is to give people feedback. Do it verbally, face to face, often. Learn to do it well. That is it.