Agile Performance Appraisals

For some reason in the last two weeks, we’ve been asked by several people about agile performance appraisals. I guess it’s that time of the year 😉
I’ll be talking about this at the South African Scrum Gathering, but if you can’t wait till then, here are some of my thoughts…

I’ve been a manager that has had to do performance appraisals in 3 different organisations. I’ve been the recipient of performance appraisals at 5 different organisations. And I’ve worked in 3 orgainsations that didn’t do performance appraisals because they were just too small and couldn’t be bothered. Here are some things I’ve noticed through this experience.

I never missed performance appraisals when I didn’t have them, although I did miss an opportunity to get feedback, and a regular salary review.

In the 3 companies that didn’t do them:

• one just avoided all conversations about performance and salary. I left after 18 months because I wanted an increase and they couldn’t afford it.
• the second told me I was fantastic regularly, and gave me an unexpectedly large increase after 6 months because I was doing a great job. I left after 2.5 years (one of my longest jobs ever), because I wanted to grow and there was not room for it at that organisation.
• the third is where I work now. It’s a little different because it’s my company, but Sam and I give each other feedback constantly, and openly discuss what we should earn each month. I have no intention of leaving anytime soon 🙂

Now let’s talk about my experience in receiving performance reviews. Note I don’t say participating, because it has always felt very one sided to me. The boss hands out performance reviews. My first review ever was after 6 months of working. I was young and naive. I got a great review (4 out of 5) and a good increase. I felt good. I had earned my stripes and impressed my boss. Yay for me. Six months later I got a 3.5. In my opinion I was doing as well as before. Somewhat unhappy I chatted to my colleagues. They laughed. Here is what they said “They can only give out so many 4’s each time, and you had one last time, so they can’t give you one again. Don’t worry it will be your turn again in a year or two.” I also found out about the mythical 5 out of 5 which only one person in our department ever got. Hmm, I was a little disappointed.

A few organisations later it was my turn to be the boss handing out the reviews. I decided that I would be fair and honest. I won’t be corrupted by the system. I had a star performer. I gave her an A (highest score). I was told that wasn’t allowed unless it was agreed by the head of the group, someone I had never met who lived in a different country. I fought it. I lost. She got a B+ and a big increase 🙁

As a manager I’ve also had people who weren’t awesome. They were, well like most of us – average. Good people who worked hard, did well in some areas and could improve in others. Although I hate to admit it. I’m average too. As someone trying hard to be an above average manager, I made sure that when I gave someone a C or 65% or 3.5 or whatever and average score was I justified it with good reasons and examples of how they can improve. I did it without holding it against the person and with the best intentions to be honest about their performance.

You know what happened don’t you? The same thing that happened when I got my 3.5. People get upset. No one wants to be average. They also stop listening for ideas on how they can improve and start justifying why they are better than that. I’ve been on the giving and receiving side of this, and my conclusion is that there is no value what so ever in telling someone they are average.
So what can you do?

Here is what I did when I had an opportunity to try something different. I was a manager of about 25 people, and I decided performance appraisals didn’t work. Instead, I did this:
I met every month face to face with each person for half an hour. Very informally, usually outside on a bench. We chatted about how things were going, what they were interested in, what they were struggling with. I gave them feedback on what I had observed that they did well, and gave them ideas on how to try something different where they were struggling.
When performance appraisal time came around, I couldn’t convince HR not to do it, but they agreed to let me handle it in my way. I gave everyone the same objectives. I cut and paste the definition of done (from their teams) into their performance appraisal forms. I am not kidding.
The scoring system was 1 to 5.
I looked at everyone and picked out 2 or 3 people that were stars. People we would be very sad to lose. They got 5’s. I looked at anyone who was not currently doing okay in their job. There was 1 person, he was aware of the problem. I gave him a 2. Everyone else got a 3. Average. I gave that to HR. They needed a number.
I then took two factors into account to determine salaries.
Their current position in the salary band (below, in-band, above) and their ‘score’.
Increases were simple.

• 5 you got an above average increase, unless you were above band (and no one who was a 5 was above their band)
• 3 you got inflation if you were in band, a bit more if below and a bit less if above.
• The 2 wasn’t cut out to be a developer. During our one on one’s we discovered what he was passionate about and found him a job in another part of the organisation where he was a much better fit.

Most importantly I did not share ‘the number’ with my team. It had no value. Instead I met with them, gave the feedback as usual and told them what their increase was. Most people were very happy.

In summary here is what I believe:
Scoring people has no value. Performance management is about giving are receiving feedback. Scores get in the way of this. Give people reasonable increases, and feedback. That’s all they need. If people aren’t doing well talk about what they do enjoy and find a way for them to do that. It doesn’t make them bad people, it makes them people in the wrong job.

Your job as a manager of people is to grow the people and help them become awesome. Awesome in whatever field is right for them.