Agile Performance Management: An HR’s Guide

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Agile Performance Management: An HR’s Guide

Agile performance management helps individual employees and teams perform better, develop their skills, and achieve their goals. Let’s have a look at how you, as an HR professional, can implement agile performance management in your organization!

Contents
What is agile performance management?
How is agile performance management different from traditional performance management?
How to implement agile performance management

What is agile performance management?

Agile performance management is a continuous and collaborative way of evaluating employees and supporting their growth. It’s based on the principles of the agile methodology, which is a way of managing projects that breaks them up into smaller increments.

Agile principles involve continuous collaboration, frequent value delivery, and continuous improvement at every stage. These principles originated in software development, but have since translated into many other fields, including agile HR and agile performance management.

Agile performance management has four key pillars:

  • Continuous learning
  • Frequent check-ins
  • Building trust
  • A sense of connection to the work community 

As a result, agile performance management focuses on employee development as well as the development of the organization as a whole. Thanks to this, employees are more engaged and tend to stay with the company for longer, while organizations generate higher returns and are more likely to outgrow their competitors.

When it comes to transitioning from traditional performance management to agile performance management, or perhaps implementing agile performance management straight away if you’re in a start-up or scale-up, HR has an important role to play.

We’ll discuss this in more detail later in this article, but HR should ideally be involved in creating a mindset change within the organization, setting up the new system, and educating the managers and employees about it.

Elements of agile performance management

The following elements characterize an agile performance management process:

Frequent (continuous) feedback and regular check-ins

Feedback in an agile performance management process is centered around people’s way of working, their future development, and how to enable this. Employees will still receive feedback on their performance too, but it’s not the single most important factor.

The regular check-ins between a manager and their individual team members are the cornerstone of a solid agile performance management process.

What ‘regular’ means exactly varies per organization, but it usually means at least biweekly or weekly. The form in which the check-ins take place can vary. Common formats include one-on-one meetings, project update meetings, and daily huddles.

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These check-ins allow managers to keep their finger on the pulse, identify budding issues early on, focus not only on the present but also on the future, and, perhaps most importantly, build a relationship of trust with the people in their team.

Agile Performance Management: Featured Image

Multiple sources of feedback

The feedback that people get in an agile performance management process involves other sources than just their line manager. Think about an employee’s peers, subordinates, and managers other than their own, for instance, who are included in a 360-degree feedback process.

It’s employee-centric

The agile performance management approach prioritizes open communication, constructive feedback, and employee development.

Implementing this type of performance management helps organizations build a more employee-centric culture, where you show your employees that helping them thrive is your top priority.

There’s a focus on skills development

We mentioned it already, but agile performance management is about much more than assessing performance.

The regular check-ins that are an integral part of the process enable managers to help the people in their team with their career development. With such an emphasis on employee growth and development, managers take on a role of a performance coach.

Goals or priorities are based on the goals of the organization

Agile performance management involves breaking annual goals down into smaller increments. That helps employees see the work as more manageable and the goals as more achievable.

The goal-setting process is collaborative, and the goals of individual employees and teams are always linked to the organization’s goals. Employees can easily see how the work that they’re doing contributes to the bigger picture.

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How is agile performance management different from traditional performance management?

Agile performance management and traditional performance management differ in many ways. Let’s examine some of the main differences between these approaches.

Traditional performance managementAgile performance management
FrequencyThe traditional approach to performance management is characterized by the (dreaded) annual appraisal that’s sometimes accompanied by a mid-year review. And if you were thinking this is something of the past, think again: 63% of companies still rely on annual employee evaluations.

Both employees and managers have long questioned the effectiveness of this type of performance management process. In fact, research shows that 9 out of 10 managers are unhappy with the way their company conducts performance reviews.  
In agile performance management, the feedback process is continuous, and managers have regular check-ins with the people on their team. These check-ins can, for example, take place weekly, biweekly, or monthly. What’s more, there’s an element of real-time feedback when a team leader shares their observations of an employee’s behavior as it happens.

Moving away from annual performance reviews can prove very beneficial for, among other things, employee retention. When Adobe, for example, made this move, they saw a 30% decrease in the number of employees who quit following their reviews.
FocusIn traditional performance reviews, as much as 80% of the time can be spent talking about the past. What happened during that project a couple of months ago, how did we approach this or that, how did you experience the collaboration with the clients, etc.

Even when all of these elements have been well-documented, it’s complicated to evaluate a project that took place five months ago simply because a lot of other projects have (probably) started between then and the moment the appraisal takes place.
In an agile performance management process, the focus is predominantly on the present and the future. Feedback is continuous, and check-ins are more frequent. This makes it much easier to discuss finished projects, but there’s another benefit worth mentioning here too.

Both the continuous feedback and the regular meetings make it possible to identify budding issues early on and, what’s more, to address them before they become big stumbling blocks.
The role of the managerTraditionally, performance management often is a one-way street. During the annual review, the manager tells the employee what they will have to do better next year, asks them a couple of standard questions that came from HR, announces if they are going to get a raise or a bonus, and if so, lets them know how much that will be.

Some managers would even go as far as to let employees fill out the appraisal forms themselves beforehand so that the actual meeting would take as little time as possible. Needless to say that there would be no mention of development opportunities or room for feedback.
Agile performance management is much more of a two-way street. In this process, the manager’s role is shifting toward that of a coach. Managers guide employees in finding their improvement points and prepare them for possible future roles in the company. Managers also receive feedback from their team members in the process.

Decisions are often made collaboratively, and as a result, employees gain both ownership and accountability.
A well-rounded viewThe traditional performance management process often includes only one person’s view on how the employee is doing: the manager’s. This comes, of course, with a number of limitations.

Common challenges involve bias, personal prejudice, the fact that managers sometimes don’t have a clue about the work the employee is actually doing or how they are doing it, and, as a consequence, give inadequate feedback.

This is probably also one of the reasons why 55% of employees say that yearly reviews don’t improve their performance. 
Agile performance management includes multiple perspectives on how an employee is performing. Feedback can, for instance, come from peers, other managers they worked with, and even clients. This gives a more well-rounded, realistic view of how somebody is working and where they can grow.

How to implement agile performance management

Let’s zoom in on the role of HR in the implementation of an agile performance management process.

HR should spearhead the mindset change within the organization when moving away from the traditional performance management approach. They help managers and employees navigate this change and reap the benefits of continuous feedback.

But what does this look like in practice? To give you an idea, we’ve listed a couple of elements to take into account.

1. Start small

As with any big new way of doing something in an organization, start small. Especially if you’re not sure whether or not agile performance management is the right approach for your company, run a pilot first.

For example, you can trial the agile approach to employee performance first in just one team for a limited period of time and then evaluate the results by gathering performance data and feedback from the participants. This can be a team that’s already used to frequent feedback and/or your own People Team.

2. Train managers and employees on agile performance management

Once you’ve got the findings from your pilot and you decide to roll out the agile performance management process in the entire company, it’s time to get started on that mindset change within the organization.

Explain to both managers and employees how they can get the most out of this approach to performance management, how to set performance and development goals, and how to deliver and receive feedback. For managers, in particular, clarify their role in the process.

A great way to do this is to involve the team(s) you ran the pilot in. Who is more suited to share their learnings, tips, tricks, and challenges than the people who already experienced it for themselves? People are more likely to be engaged, ask questions, and share their concerns with peers they can relate to than with somebody from the People Team they don’t know that well.

3. Emphasize the value of continuous feedback

Educate managers about the value continuous feedback brings to the employees, themselves, and the business. Think of improved engagement, lower attrition, increased productivity, and better performance, for instance.

Provide them with examples of what continuous and immediate feedback and ongoing development conversations could look like in practice. That will help them picture what this could look like within their own team.

4. Simplify gathering feedback from multiple sources

62% of employees state they would like to receive more feedback from their co-workers. That’s a compelling reason to make it easier for them to get it.

Create feedback forms that employees can easily share with their peers and managers to gather feedback. You can create several versions with different questions. For example, some can be focused on performance, others on development and growth, and some on working in a team.

This is a peer feedback form we use at AIHR:

Peer Feedback Form Example from AIHR

5. Help create development plans

(New) employees might not be aware of all the development and career growth opportunities they have within your organization. Help managers and employees navigate this so that the employees can set realistic goals for their growth.

There are different ways to go about this. You can chart career paths for different roles in your organization, share team growth plans or point out the skills gaps identified through skills inventories, for example.

6. Promote transparency and accountability

Make sure that employees know what the organizational and team Objectives and Key Results (OKRs) are, what their own goals are, and how they relate to the organizational OKRs. Among other things, this will increase engagement as people will better understand how what they’re doing individually and within their team is contributing to the bigger picture.

Below, you can see what setting OKRs can look like within the HR department and how they relate to each other.

HR OKRs

7. Track, evaluate, and iterate

As with all of your processes and programs, track the results of your agile performance management system by evaluating performance data and getting feedback from managers and employees. Gather information on what is working well and what isn’t, and make adjustments. Agile is about continuous improvement and value delivery, after all.

Before you go

Organizations need to become more employee-centric to fulfill the expectations of both today’s workforce and that of the future. Agile performance management fits perfectly in this kind of workplace. It gives employees (more) ownership of their performance and development through frequent feedback from multiple sources as well as a truly two-way conversation with their manager.

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