Performance Appraisals have become the irreplaceable parts of organizational operational processes and very much for a reason. Come April and all discussion topics on operation floor reduce to just Appraisal. Everyone tends to forget how badly did they perform throughout the year and all of a sudden there is a heavy crop of all the good work that each of us have done. Everyone believes s/he is the start performer of the year irrespective of all the screw ups during the year. Loads of Appraisal forms are printed and hours of time is invested in filling the applications. In all this, one important point that everyone tends to overlook is that Appraisal Ratings are not assigned overnight by the reporting manager, but are accumulated over the period based on your own performance. However if you are thinking the accumulation period is last one year or so, then you are wrong. As a matter of fact, appraisals are based on your performance for last 3-4 months only. Pull any of your own appraisals to date and check it against your performance. I bet my breath on it that you would just not find any match between your rating and your performance at the beginning of the year. As a matter of fact, some excellent accomplishment at the beginning of the year must have been considered to be an obvious thing … you know call of the duty or that is what is expected from your role anyways. But you turn a bad situation into good one or vice a versa in just last 3-4 months and you would find yourself in a sweet spot.
This has worked for organizations for long time. However there are critical issues with the process. One we just talked about, but the most critical one being the traditional appraisals are very influence driven. Most of these appraisals do not talk about your performance, but of what your reporting manager thinks about you. The ratings are a matter of Bargain – you think you need 8, I think you deserve 5, so let us settle for a 6 or a 7. Come on, if you as a reporting manager believe I deserve a 5 then why not stick to your guns? Or are you not so sure about it? The process is not very transparent and also is influenced by the sense of superiority – if you know what I mean. Another big issue is that the traditional method is based on the objectives or Key Result Areas, that are defined at the beginning of the year. But how many times are these KRAs or objectives practical and that to for the entire duration of year. You think the KRAs will be static for the rest of the year ….. Give me a break.
Agility looks at the appraisal process a little differently. We all know that Agility is about team work, about ownership and about empowerment. So it puts the appraisal process in employees' hands. With Agile, the boundaries of roles of Resource and Reporting Manager get erased, and as a result the traditional appraisal system finds itself in nowhere-land.
Agile proposes a flat team structure without any reporting authorities and with equal responsibilities. Project success or failure is a team effort and individual performances become a part of history. And therefore it becomes very much important, for all the HR representatives at least, to brain storm on a new way of appraising the Agile Teams. Couple of options I could think of are:
1. Celebrate and/or punish entire Team’s (non)Performance. Treat and rate every individual the uniform way. So each of us gets the same raise or no one gets it. The challenge here is – no matter how much we read that it is all about team performance, it is rare that a team is successful without individual heroes. And we risk of frustrating these individual performers by putting them at the same table as that of low performers. (Another school of thought here is if an individual thinks s/he is smarter than rest of the team, s/he is not fit to be on an Agile team anyways).
2. Another better way is to have Scrum Master do the appraisals in discussion with entire team. This may work where a Project Manager is pretending to be the Scrum Master. But Scrum Master by definition is not in position for this job.
3. The third and the best way, at least according to me, is to let the teams conduct appraisals internally for everyone. The way it should be done is:
- Each team members appraises every other member on three aspects (there is no need to weight any of these aspects separately as all of them are equally important)
- Technical
- Soft Skills
- Team Player
- Alignment towards Organizational values / growth
- Average the ratings given by rest of the team to get individual’s rating (and be sure to adjust the outliers by discussion)
- Apply the Project Success Factor (PSF) to individual’s rating to flatten it at organizational level. PSF could be as simple as the impression of Senior Management or as complex as special derivative of various factors including Project Profitability, Schedule Variance, Resource Maturity Index, Customer Satisfaction Index, etc. The PSF would be equally applicable to each of the team members.
- The key is to gather multiple data points. So just like frequent sprints, gather the data points every quarter (or at the end of the project if project is of small duration).
My point of view, option 3 this is the most agile way appraising individuals and teams – irrespective of the project methodology. It will ensure the individuals are rated properly, will maintain the organizational harmony during and after the process and most importantly will enforce the team spirit and team work in individuals. After all, you just don’t have to behave with your Reporting Manager, but also respect your team members.
Let me know if you have a better way than this. Did I hear “Scrap the appraisals”?
