Agile Performance Management | How to Manage Performance In Agile Teams
agile team collaborating

How to Manage Performance In Agile Teams

We’re living at an exciting time in the history of work. Everything from the way we design our workplaces to entrenched ideas of organizational hierarchy is being questioned and even rejected in favor of new processes, designs and ideas which favor flexibility, customization and above all, agility.

One such ingrained concept being totally revamped is the idea of the “team.” Rather than traditionally static top-down teams, knowledge-intensive organizations are reformulating this concept to better fit their fast-paced environment.

The great thing about this reconceptualization of the team is that there is not one, but several new models which are being taken and adapted to fit the needs of the organization. Customization and experimentation are key.

team network infographic

Source: Deloitte University Press

However, the unique characteristics of these teams also mean that they don’t necessarily fit into standard HR processes. Managing agile teams has become increasingly more challenging. For example, traditional top-down annual reviews were created for static teams in which managers, peers and reports stay the same and an individual’s year-long performance is assessed. The challenge for HR will be redesigning performance appraisals so that they can be customized for each team’s needs.

Here are some common characteristics of these new types of teams which HR will have to take into account:


The main idea behind these new types of teams is to increase agility. One of the most important parts of this is keeping decision-making at the team level. Rather than having to wait for approval, these teams have the ability to act fast, facilitating a more flexible response to sudden industry changes. These sudden changes in direction also require flexibility in goal-setting and constant feedback to help get everyone on track.


These teams consist of people with different areas of expertise, thereby enabling each member to leverage their strengths to accomplish team goals and facilitating knowledge-sharing within the team. For example, Spotify has created its own grids of employees based on different groups, tribes, chapters, etc. of skills. Watch this video to see how their system works. With everyone bringing a different skill to the team in order to reach a common goal, feedback is key, not only from team leads, but also from peers.

Ad hoc

These may not necessarily be static teams but also project-based groups which form and disband on a needs basis. For example, gaming company Valve is famous for allowing their employees complete freedom to form and move between groups based on their interest in a project, even providing them with rolling desks which can be moved along with their owner.

Creating psychological safety in agile teams

According to Juan Castillo, scrum master at tech company Impraise, no matter what type of team you have, creating psychological safety is the most important element you need in forming a successful team. This is difficult to build, as safety requires trust, which can only come when people feel comfortable sharing ideas or raising concerns without being judged.

The term psychological safety was originally coined by Harvard Business School Professor Amy Edmondson and later found to be the top quality needed for a successful team during Google’s Project Aristotle study. (Read more about psychological safety.)

How can HR create an agile performance management process that fits the needs of these new types of teams and at the same time fosters trust?

Performance management in agile teams

Rather than trying to fit these unique types of teams into a traditional annual performance appraisal framework, allow teams to customize their own performance management cycles which are sprint or project based. This could include:

  • Sprint or project-based performance appraisals: Rather than basing performance reviews on year-long performance, allow teams to decide when performance assessments are most needed. In the past, pen and paper reviews tooks hours for HR to set up and then distribute the results. Using a performance management tool gives team leads the power to set up reviews in minutes, eliminating hassle.
  • Empowering your people: The best people to receive development advice from are those you work with the most. If your people move frequently between ad hoc and project-based teams, they may miss the opportunity for valuable insights from temporary team members. Allow your employees to take ownership of their development by giving them the flexibility to choose who they want to receive feedback from during their performance appraisal.
  • Continuous feedback: In these teams everyone has their different field of expertise, but the point is not to keep this knowledge separated. Agile teams present a unique opportunity for upskilling and growing your talent organically. Make the most out of this agility by facilitating continuous 360-degree feedback outside of performance reviews.
  • Feedback moments: Creating specific moments during which people share feedback with each other can help train positive feedback behavior within teams. The more people are prompted to give feedback, the more they’ll become comfortable with it and then begin sharing it on their own.

As Castillo shared with us, this has to start at the top level. As a scrum master, he regularly asks his team for feedback after retrospectives to see how they can be improved so that everyone benefits. Leading by example can show the rest of the team that it’s ok to ask for and receive feedback.

Another important moment where feedback is essential is during sprint demos. It’s not only important that agile teams share the work they’ve accomplished with other teams, but also that they’re able to receive external feedback, especially from individuals in customer success or sales who are working directly with clients.

Finally, a major part of creating a successful and comfortable environment is by taking time to celebrate success. Let people know that their hard work won’t go unnoticed.

You may be wondering how can you ensure alignment across the organization if you give these teams too much flexibility over their performance management process? Here’s how to ensure that there are stable touchstones in line with your company mission, while empowering nimble teams.

HR’s role in creating a self-service performance management system

While teams should be given the flexibility to choose the performance management style that works best for the way their team works, there are three things HR will need to do to facilitate a self-selection-based environment:

Competencies: Create core competencies which will help you align and compare team performance across the organization. Likewise, having a library of competencies will set the standard for new leaders learning how to best guide their teams.

Technology: It’s up to you to choose a performance management tool that allows each individual group, team tribe, etc. to customize their own process within the same platform. Impraise is one option which has been chosen by over 100 (mainly tech) companies, including Atlassian, Fandango and Shopify.

Data: Using one platform allows you to collect, analyze and compare the performance of different teams on core competencies. Use this data to gain insight into the health of your teams. Rate of feedback exchange within a team can be a great indicator of psychological safety.

There can be no more one-size-fits-all performance management process. Instead, it’s time to build an agile process that caters to the needs of agile teams.

Learn more about how old-school review models are evolving into contemporary, as-you-go methods in Performance Reviews: Throw Them Away or Do Them Every Week?.

And download The Employee Retention Playbook to learn more about improving employee retention, including the four most significant factors that contribute to whether your best people stay or leave.

About the Author: Steffen Maier is co-founder of Impraise a web-based and mobile solution for actionable, timely feedback at work. Based in New York and Amsterdam, Impraise turns tedious annual performance reviews into an easy process by enabling users to give and receive valuable feedback in real-time and when it’s most helpful. The tool includes an extensive analytics platform to analyze key strengths and predict talent gaps and coaching needs. Follow him on Twitter @stgmaier