Managing the performance of employees in any company is a complex endeavor. Agile and lean organizations face the additional burden of implementing an approach to performance management that is in alignment with the nature of agile and lean development. Implementing agile and lean performance appraisals presents some unique challenges and this article discusses how to do so in a way that helps to enhance the agile and lean practices that so clearly result in excellent team and organizational performance. The good news is that agile and lean performance management is much more effective than other methods. Read on if you want to get your performance management on track the agile and lean way!

Personality in the Workplace
My column called Personality Matters (in the CM Journal)provides psychological insights that are relevant to IT professionals. In the recent book Configuration Management Best Practices: Practical Methods that Work in the Real World, Addison-Wesley 2010, which I coauthored with Bob Aiello, I discuss the personality issues that are essential to consider when implementing CM Best Practices in practical settings. The workplace often presents many challenges including culture, team dynamics and critical success factors to consider in helping teams be more effective. Agile/Lean presents some unique challenges and any approach to performance management needs to take these considerations into account.

How Am I Doing?
The best part of writing for the Agile and CM Journal is getting feedback from my colleagues who share common interests. Every email that I receive, whether the person agrees or disagrees with what I have written, is valued and appreciated. Everyone needs feedback in order to improve and grow. But not all feedback is constructive. Sadly, many managers are not skilled at providing constructive feedback which can help improve the performance of their organization?s most valuable resource. Whether you are in an Agile organization or not, well-articulated feedback is absolutely essential. 

Performance Evaluations
W. Edwards Deming listed Evaluations of performance, merit rating, or annual reviews as one of the seven deadly diseases in his groundbreaking book, Out of the Crisis, published in the 1980s. Deming explained that many performance evaluations "lead to short term thinking, destroy teamwork, and build fear." Jurgen Appelo points out, in his book Management 3.0, that the Poppendieck's Seven Principles of Lean are based, in part, on Deming's fourteen points for management. Traditional performance evaluations are often inconsistent with agile principles. But that doesn't mean that we don?t need to help team members improve their performance. Instead, performance evaluation should be a continuous function that is delivered as part of coaching and, as a result, is very much in alignment with agile. 

Coaching Performance
The role of the coach is implicit and valued in any competitive sport. Ken Schwaber uses the football metaphor from which SCRUM derives its name (based upon the circle of Rugby team members who fight to get possession of the ball). Coaches are evaluated based upon their ability to provide continuous and valueble feedback that directly results in improved performance for the individual and the team. Good coaches lead their team to Championships while ineffective coaches are often replaced by the team owners. Coaching may involve providing tough feedback and also acknowledgment of a job well-done. Successful, coaches motivate athletes to put forth incredible efforts designed to produce amazing results.

Undermining Team Performance
Many managers undermine their own team's performance. Traditional performance appraisal often results in a skewed balance that is over-focused on short term objectives to the detriment of the long term interests of the organization. There are firms where managers either give everyone a high (inflated) rating or, even worse, are forced to rate their team members along a predefined distribution. As Deming pointed out, performance evaluations undermine performance improvement. 

Rewarding Individual Behavior
Rewarding individual behavior would seem to be a necessary and straightforward requirement. When we work hard, we usually expect to be rewarded ? regardless of how the rest of the team performed. Many technology professionals thrive on being competitive along with being entrepreneurial and thus look forward to reaping the rewards of fame and wealth. We all know the success stories that have led to innovations which have transformed the technology industry and our daily lives. Rewarding individual behavior may need to be handled carefully, but is not always a bad policy. However, it is usually best to have compensation based upon a function of both individual and team performance and this actually a common practice in many successful companies. 

Driving Out Fear of Feedback
Managers who are afraid to give constructive feedback and employees, who are reluctant to receive it, are certainly a serious problem. Sometimes this is because the feedback given is less than optimal and gives no practical information. Other times people are just not prepared to hear negative feedback, which may suggest the need for introspection, a sometimes stressful process of altering and improving our behavior. 

Performance Can be a Set Time
Yearly performance feedback has a lot of associated problems and drawbacks. But setting aside a time for reflection is not itself the problem. Many cultures have religious and spiritual periods of reflection that do not preclude improving oneself at some other point in time. But once or twice a year it is good idea to make sure that time is allocated for feedback that is done in a constructive and helpful way. This annual or semiannual event should be part of an implicit daily feedback model and culture. 

No Surprises
Performance feedback should never be a surprise. When it is, this may indicate that the manager has failed in his role as a day-to-day coach. Feedback should be consistent and constructive with the goal of improving one's behavior. This also requires that the manager providing the feedback acknowledges when there has been improvement. This analogous to a popular behavior modification technique known as catching the person "being good" employed by savvy parents and teachers throughout the world. 

Self-improvement
Agile is certainly, at its core, a journey towards self-improvement. Feedback should be a welcomed opportunity to see oneself for what we are and a great opportunity to work on becoming the best that we can be. Self-improvement should mean that we will become better at what we do and, ultimately, more successful. Obviously, this can occur much more readily when we view the feedback as being fair, timely and valid. 

Developing the Individual
Successful organizations invest in their most valued resource and encourage each and every employee to reach their own greatest potential. Performance improvement must be an implicit and ongoing part of this mission to foster each individual?s development. The team should also have a time for reflection and self-improvement of the group as a unique entity. 

Agile Retrospectives
Agile retrospectives are an essential opportunity to look at the team?s performance and review what went well and what can be improved further. Each member of the team should always be prepared to consider what they did well themselves and where improvements could help them be more effective and improve upon their own success. 

SCRUM and Performance
Ken Schwaber points out that SCRUM provides many feedback cycles (Agile Software Development with SCRUM, 2002, p. 120). The performance and success of the team should always be the goal for any agile effort. With its focus on removing barriers and excellent communication, agile SCRUM provides an ideal setting for managing agile performance 

Conclusion
Just as we have continuous integration, we also need to have continuous feedback and performance. This is best accomplished in an environment where the members feel safe and are engaged in a journey towards achieving excellence. Agile and lean organizations are ideally positioned to help their members achieve excellence in performance with all of the successful results that we have come to expect from the transformation to becoming agile.