On my recent trip to China, I was surprised that the question I was asked most frequently was "How do I do performance management for agile teams"? I wasn't surprised that this was a question, but it's not usually the first one that comes up when people start to talk about making agile work in their companies.
Make no mistake: This is a big question for managers out there, and there are no simple answers. I do have a few practical tips and thoughts to share on the subject. My purpose in this article is to give managers of agile teams a few places from which to start developing their own approach to performance management for agile people.
It's almost amusing that out of the entire universe of people practices  that are a part of managing a company, the ones that managers seem most concerned with are a very few:
- How do I evaluate individual performance so I can give the right pay and bonuses to the right people?
- How do I identify star performers and keep them from leaving?
- How do I identify poor performers so I can "manage" them (usually implying "manage them out")?
- How can I support or reward team performance in my company's individual-oriented performance management system?
So, let's take a look at why this is a difficult question and then toss away the theory in favor of imperfect but workable approaches that you can use next week.
Performance Management Basics: Why It Doesn't Work
My bible on performance management is Abolishing Performance Appraisals: Why They Backfire and What to Do Instead by Tom Coens and Mary Jenkins. This book provides a good thought framework for this issue. Let's start there.