Motivation and Reward Models on Agile Teams
Motivation and reward models are important to generating the desired behaviour of individuals and the team. Reward system needs to be perceived as fair, and that individuals can affect the objectives in their development plans and goals are set that they can influence.
As organizations emphasize agile teams, reward programs become more complicated. Juggling the individual’s performance as part of a team effort can be a delicate balancing act. Lazy team members can be a thorn in the team’s side. The organization’s motivation and reward model needs to create an environment that supports the objectives of the agile development team.
Rewarding individuals sets up a pecking order and a competitive environment that can undermine the team’s objectives. The traditional approach of giving individuals credit for team effort and fostering competition that creates winners and losers is a good way to kill team motivation on agile teams. Juggling the individual’s contribution with the team effort can be a delicate balancing act. In North America you really can’t eliminate the individual reward model.
For team rewards to work they need to be innovative, they need to be objective, they need to be flexible, yet they can’t disregard the individual. Reorient reward systems to recognize both individual and team contributions. The adoption of an Agile method will significantly alter the behaviours required of many of your employees. If the reward system is not changed, then the staff’s behaviour will resist change as they continue to act in ways that are rewarded.
Variable cash programs have been found to be the most effective tools in supporting teams. These plans were commonly used to promote a team mind-set in organizations with strong team programs. These programs include a strong individual pay component, with pay for performance incentives tied to team performance. Non-financial rewards such as public recognition, meaningful work, providing new training and growth opportunities, and personalized rewards are effective on high performing teams. Experimenting with more creative rewards often has a more meaningful and long lasting impact.
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January 5th, 2010 at 4:29 pm
Great post! Now featured on http://www.AgileShout.com.
January 5th, 2010 at 4:51 pm
Don't forget cool new hardware. It's a corporate investment, yet it rewards the individual. We geeks like our shiny toys.
January 6th, 2010 at 12:16 pm
Hi Robert,
The following are an update on some thoughts initially shared through a LinkedIn discussion group. Given others seemed to be directing the debate directly here, thought I would expand on my comments here.
For a start, let me state that I am neither an excellent manager, nor do we have excellent teams (or at least what I would consider excellent, in either terms). Hence, the following are some thoughts I have been working through with a view to improving our/my own performance, and so should be read in that context. They may prove helpful to some, and some (no doubt) will disagree.
1) Team Dynamics
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Firstly, it is my view that the team should be constituted of the right individuals in the first place (e.g. none of the Lazy Individuals you talk about).
You can't motivate a chicken to turn into a duck – therefore, if it is ducks you want, start by getting the chickens off the bus. And, yes, I know it is not as simplistic as being able to pigeon-hole who are ducks and chickens!
2) Motivation
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Secondly, I would state is that (like for any other contributor in the knowledge economy) motivation should be very much focused on INTRINSIC and not EXTRINSIC motivation. See here for some details:
http://blog.global-roam.com/index.php/2009/09/inc...
Having worked in a variety of organisations across 4 continents, this is one thing I am sure of.
With this in mind, reward models are still important, but not critical.
January 6th, 2010 at 12:18 pm
3) Team-based approach
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My belief is that the Agile approach is very much aligned with a self-managed team philosophy I have encountered in other domains, as noted here:
http://blog.global-roam.com/index.php/2009/09/boo...
Hence, rewards (very much) need to be team focused, in my view.
For our company, we have always had quarterly share of net profit each quarter (when we have made one), evenly shared across everyone in the company.
3a) Clarification
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To clarify a question that arose on LinkedIn (in case it arises also here) it does not mean we have uniform base pay across the board. Rather, base pay is variable, based on a person's expected value delivered (i.e. competency etc) and bonus is based on actual value delivered, but on a team basis (as that's what we want to encourage).
I believe that this is aligned with what you noted in your last paragraph, Robert?
4) Linked to real value
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In my view, our approach is also aligned to Agile in another way – in that it's reflective of real value delivered (i.e. if the project is done but the software does not sell, it's of no real "value" to our clients).
I believe that having this approach achieves two things:
1) It focuses all team players on what the goal is (i.e. real value). For us it is sales, for others it might be something else.
2) It also means that the reward is not delivered unless the objective is met (so, in our terms, the benefit pays the reward).
There are bound to be other models that would work just as well, if not better. The key is that the approach you take needs to be aligned to your company value system.
January 6th, 2010 at 12:19 pm
5) Be agile (small "a")
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In true agile-style (small "a") try something out and change it if it does not work – so long as everything you do is aligned with your value system.
For us, for instance, it means that we're rethinking the remuneration structure, slightly for a number of reasons, including that we're going to start a recruitment effort shortly. What emerges will still be aligned with the above values/principles.
I believe this is aligned with what Jim Collins termed "preserve the core AND stimulate progress":
http://blog.global-roam.com/index.php/2006/12/boo...
Does this help?
Paul
February 2nd, 2010 at 11:02 am
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