The Challenges of Measuring Success and Performance in an Agile Work Environment
Traditional employee evaluation processes are based on the company’s requirements and are mostly quantitative. It is owned majority by the HR or the executive board which is commonly held annually. Although it is effective in certain businesses, adopting employee evaluation in an agile working environment presents special challenges. I’ll be expounding on the different challenges that Robert Frost discussed in one of his lectures.
Challenge1: Measuring the Obvious
Every day, a young boy picks a flower from the street to give to her mother. One day, his mother decided to grow the same flower in their backyard. The young boy stopped giving his mother a flower because he was dismayed by her.
This is a simplified story to show how performance metrics may affect employees who make an extra effort to excel in their roles. Unexamined performance metrics might affect employees' motivation. This effect is comparable to the Theory of Black Swan Events.
Challenge 2: Different Decision-Making Environment
Depending on an employee’s qualifications and talents, management may assign him or her to a particular role. Employees with less experience may work on decisions and tasks that have a high certainty of process and result, with the flexibility of adjustment as the person develops. Different employees may measure achievement differently.
- Employee A operates in a working environment with low certainty of process and result. Hierarchical positions like managers and supervisors often have to deal with this. There is also the linked role or the role that is heavily dependent on the team or other individuals, such as the relationship between the developer, QA, and designer.
- Employee B operates in a working environment with average certainty of process and result. In this working environment, ideal objective settings are the most effective (OKRs).
- Employee C operates in a working environment with predictable causes, effects, and risks. This is common to routine tasks found in the industrial industry.
This different working environment has different certainty levels of achieving their goal. An employee evaluation method designed to measure their individual accomplishment without considering this different working environment may frustrate the employee.
Challenge 3: Interellatedness of Work
Setting goals in teams that perform different tasks is detrimental. We cannot simply set an individual goal for a team that delivers results as a group. There is a task that has a strong reaction or influence on another task, that depends on another.
Balance is needed in evaluating both team and individual goals. When pursuing an individual evaluation or a team goal, it's crucial to think about the right person who can assess an employee's entire contribution and who can evaluate the impact of team collaboration.
Challenge 4: Nature of work and the Relationship to the Organization.
Each employee has a distinct working relationship with the company and has varying levels of responsibility. Some work independently or with a team, some have less flexibility or control (autonomy), and some are more significant because of the importance of their function and the potential consequence of their absence.
The illustration above shows two employees that have distinct relationships with the company.
- Employee A usually does what he or she is told to do. Perform tasks that are described in his or her job description or what is stipulated in the process manual. You can be very honest with them in giving feedback. Even if the employee leaves, the company can get a replacement since professional independence, social collaboration, and autonomy is low.
- Employee B has earned trust and dependency. They got the skills and abilities that other companies might need. Employees with high professional independence, social collaboration, and autonomy are expensive to lose.
An unexamined evaluation tool will hurt these employees if feedback or goal setting is not structured well.
Measuring Performance, Achievement, and Effectiveness
It is easy to see how performance, achievement, and effectiveness are related. Performance is a personal behavior that is related to organizational objectives, according to Campbell’s taxonomy. It has three major components — Declarative knowledge, procedural knowledge, and motivation. Achievement might take the form of the accomplishment of a project, financial gain, or professional advancement. Effectiveness is the capacity to meet predetermined objectives, and it should have a vision and purpose.
In actuality, there are other areas that need to consider in the employee evaluation process. Like in kite flying, we assess if the area is in a big open space away from buildings, trees, and roads and has optimal wind, is free of rain, and has enough lightning. We make sure the employee has an optimal working environment where they can work to their full potential and express positive behavior.
Child psychologists encourage parents to reward positive behavior — the way in which one acts or conducts oneself. Performance is behavior relevant to the completion of a task and to the organization’s goal. Performance is not:
- The consequences of action: it is the action
- An evaluation of the quality of work (effectiveness)
- An assessment of output/input (productivity)
Evaluating employee performance is all about the process of achieving the company goal and nurturing them to learn how to better the next time. Thus, the manager takes on the role of a coach rather than a judge. One of the major responsibilities of a manager is to create a culture of guidance (praise and criticism) that will keep everyone moving in the right direction.
The company may arrive with different tangible metrics to measure the actual output or effectiveness of the employee, which might work for some but still not enough to address the challenges and build a team that can thrive in the agile work environment.
Output VS Outcome
The first Agile principle says, “our highest priority is to satisfy the customer through early and continuous delivery of valuable software”. Does it have something to do with employee evaluation? Yes. It is part of performance management to understand the workplace culture of the employee to develop individuals and teams and align performance with the strategic goals of the company. The agile principle can be applied to problems bigger than software development.
Setting project goals weren’t all that challenging in the early days of engineering. If you’re building a bridge, for instance, you’ll know you’re done when vehicles can safely cross it.
A software system is never completed. We simply opt to put them on hold or focus on one area of them over another. The daily task of the team is the output while the behavioral change of the intended user is the outcome and the impact is how the company grows. Let me elaborate on that.
- Output is the stuff produced such as deliverables, tangibles, and other features. It is the main focus of the delivery team.
- Output is not automatically converted to the outcome. The output will become the outcome.
- Outcomes are what your customers and users do, say, and feel.
- The impact is not the same as the outcome. The impact is the business capability and its business metrics or KPI that we care about
- Business leaders tend to focus on impact because these are metrics that say how the business is doing financially.
- Output and Impact are relatively easy to measure. They are quantifiable. They can be easily measured and observed. On the other hand, outcomes are much more subjective, intangible, and very hard to quantify.
- Some people focus on output and only output and it distorts the concept of success.
To paraphrase Jeff Patton, who once said that “Paying attention to product outcomes is paying attention to how our consumers receive value from our product,” paying attention to employee outcomes is similar to paying attention to how our employees get value from our evaluation tool.
Josh Seiden described output and outcome in his book Outcomes Over Output as Project well.
We plan our resources (the people, materials, money, and other things we need), and we undertake a set of activities (traveling to the village, acquiring and transporting our materials, and building a well.) If all of this goes according to plan, we can create the output — the well. If the well works as planned, we achieve our outcome — people in the village spend less time carrying water. That in turn, becomes an important contributor to the impact we seek: a higher standard of living in the village.
To complete our framework, what could be the possible outcomes of driving a car toward its destination? Many possible outcomes could happen.
In the words of Seiden, “an outcome is a change in human behavior that drives business results”. We can loosely translate that in our context as the employee outcome is a change in human behavior that drives business results.
If an outcome is a change in employee behavior that drives business results, we could have asked “What is the employee behavior change that we are looking for?” We should be focused on creating outcomes by changing employee behavior. Behavior that leads to good things for the company, for the team, and for the employee.
