Pitbulls Part 2-The Agile Perversion from Financial Incentives
On time and under budget do not matter to end users, yet it still is
rewarded and desired at most businesses, even those who claim to be
"Agile". It doesn't matter if the team "does agile" if the corporation
does the standard individual financial compensation. They only can do a
limited version of agile and it will be corrupted from within the team.
The true motives aren't guided by the agile manifesto when each person
is out for themselves. If you have that sick feeling that something is
wrong with Agile in practice and you don't know how to put it in words,
consider this blog. Consider that it may not be an Agile problem at all.
What if the reward infrastructure is causing some perversion instead?
The misunderstanding and twisting of Agile from what is defined in the
manifesto.
How would you feel if you knew that your team mate made 10% more than you simply because of his height, or because at the time he was hired the company was really desperate to get someone in? What if your co-worker is simply prettier, younger, and thinner, with better dental work, and for that reason seen as having greater future potential. That is worth say 25% more than you make. What if you all worked very hard to meet the project goals, but because you were a week later than estimated, even though time to market wasn't critical to the sales of the project, your team lost out on a bonus? What is the bonus rewarding? Does it include something for the long term well being of the company? Or is the software being treated as a hot potato to get off of your plate and dump it on someone else? What about sustainability?
Signs of Perversion/Moral Ambiguity
Signs of Team Rewards to Support an Agile Team
Let's talk about the dirty perverted underbelly of Agile that no one is willing to address. This is the pitbull's owner. Many software companies have a legacy of an individual system of financial rewards which can be contradictory and downright detrimental to building a high performing and collaborative agile team. Some budgets are used to pay for unimportant factors that do not serve the users or even the company interests long term. It serves the trends of shareholders, short term financial gain, and it is morally bankrupt. Team rewards, including things like trust, openness, words of appreciation, satisfaction of a job well done, fun, and freedom may take more than a budget to distribute, but I believe that having team based rewards and some standards of fairness will improve productivity not just for the team, but overall for the company. When the goal is quality sustainable software, it takes more than being on time and on budget. It takes engaged and passionate people who care about more than just what they can get. There is a better way, and when I see companies making changes to a more ethical system of financial rewards I feel encouraged. The future belongs to the companies who get it. Team isn't just the people nearest you on the org chart.
How would you feel if you knew that your team mate made 10% more than you simply because of his height, or because at the time he was hired the company was really desperate to get someone in? What if your co-worker is simply prettier, younger, and thinner, with better dental work, and for that reason seen as having greater future potential. That is worth say 25% more than you make. What if you all worked very hard to meet the project goals, but because you were a week later than estimated, even though time to market wasn't critical to the sales of the project, your team lost out on a bonus? What is the bonus rewarding? Does it include something for the long term well being of the company? Or is the software being treated as a hot potato to get off of your plate and dump it on someone else? What about sustainability?
Signs of Perversion/Moral Ambiguity
- Secrecy.
- Huge bonus and salary differences based on corporate layers.
- Goals are all money based or stock based on the very uneven reporting hierarchy.
- No team rewards.
- No profits shared.
- Promotions and bonuses are still earned by the "unspoken network" where whomever drinks with the Boss gets it.
- Old fashioned Old Boys network (or Sorority Sisters as the case may be), but not based on the work done on the current project.
- It is impossible for the entire team to win. This means someone must be ranked low.
- It is possible to get a stellar review and then be laid off, so risk and rewards don't match performance.
- A "class" system including serfs (interns or contractors), so rewards are even more uneven.
Signs of Team Rewards to Support an Agile Team
- Profit sharing exists and is protected.
- Stock grants per team in equal amounts.
- Sustainability over time matters.
- Delivering a product of quality that meets the user need is rewarded.
- The entire team is rewarded equally in some way. The same goes for failure.
- Salary ranges per job are available per office (area).
- Managers evaluate the entire team actual work and tasks against roles and pay.
- While no human judgment is going to be perfect, what happens on the team at work will be the performance rewarded, not if these people are you "drinking posse" or "golf buddies" or whatever other social thing. I know it is natural for people to want to build a shield of sycophants to feel safe, but that isn't what the agile manifesto is about. It is about the team working together to create software, and the reward structure needs to support the work.
- She who works the longest isn't rewarded the most. It isn't a contest. Instead, it is encouraged to have balance unless it is one of the RARE critical moments in a project where it actually makes a difference, and in that case the entire team sacrifices equally to get the job done.
Let's talk about the dirty perverted underbelly of Agile that no one is willing to address. This is the pitbull's owner. Many software companies have a legacy of an individual system of financial rewards which can be contradictory and downright detrimental to building a high performing and collaborative agile team. Some budgets are used to pay for unimportant factors that do not serve the users or even the company interests long term. It serves the trends of shareholders, short term financial gain, and it is morally bankrupt. Team rewards, including things like trust, openness, words of appreciation, satisfaction of a job well done, fun, and freedom may take more than a budget to distribute, but I believe that having team based rewards and some standards of fairness will improve productivity not just for the team, but overall for the company. When the goal is quality sustainable software, it takes more than being on time and on budget. It takes engaged and passionate people who care about more than just what they can get. There is a better way, and when I see companies making changes to a more ethical system of financial rewards I feel encouraged. The future belongs to the companies who get it. Team isn't just the people nearest you on the org chart.
Posted by Testy Redhead at 12 Oct 2010 
Categories: uncategorized
Tags: process company ethics trust Agile opinion business rewards shareholders agile testing
Categories: uncategorized
Tags: process company ethics trust Agile opinion business rewards shareholders agile testing
I understand your point, Lanette. And I agree with you about financial compensation system often undermining goals.
But I think you are implying that shifting the reward system from rewarding individuals to rewarding teams will cure the problem.
"Stock grants per team in equal amounts." "The entire team is rewarded equally in some way. The same goes for failure."
We can use the same arguments, and apply them to teams - How would you feel if another team made 10% more than yours, simply because of their average height?
No team operates in isolation. In a company everyone, on every team, must pull together for the company to succeed. The true motives aren't guided by the agile manifesto when each team is out for itself.
The problems you ascribe to individual rewards apply equally to team rewards.
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Hi Joe,
Awesome point and so correct. I want something better so badly. I want to see some solutions tried so much that I have really jumped to conclusions here with no evidence.
I have more writing to do talking about this phase in technology and this group of people I'm seeing right now who have lost all confidence in companies since the economic downturn. I'm seeing people get serious about their startups, working to earn just enough money so they can do their side projects, and giving up on finding anyplace they belong unless they create it. I think there is a place to try some of these ideas and see what happens in practice.
If another team made 10% more than yours because they worked on the pet project of the guy who owned that budget and that project is his flavor of the year? Yep. Another normal issue that I'd like to see some solutions for. A flat structure. Salary ranges based on something other than whims. Transparency (not to what individuals make, but at least to the level of what the ranges are).
I haven't found a way to express it yet, but the destruction of solid teams is having some human impacts, both good and bad in the industry. I'm hoping to open the topic for discussion, and thank you for pointing out a huge blind spot in my ideas. I'll give it more thought.
Lanette
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Interesting article, the hot potato phenomenon is actually discussed in Jerry Weinberg's QSM: Vol Systems Thinking. Where he describes the back log of issues being passed from desk to desk, merely to give the impression that work is being done on the problems, when actually, they may not being tackled or looked at at all.
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This article, despite holding on to it which I very rarely do, has all of the desperation, moral judgment, and despair that I can't get past on this topic. Agile perversion is the top risk to the craft of software testing in my mind. Agile which follows the manifesto is my favorite solution to that problem because I've been on a team that had that flow & productivity and there is no high like it. I don't want to be wasted. I don't want my testing skills, my technical knowledge, my passion for this topic wasted. I don't want to sit for years in one place and miss my chance to do what I was made for. I don't really know how to express properly what makes a team strong, but you know when you are on one. When I have a team I belong with, the company could go to hell around me and I'd still be there working myself ragged happily. If I belong to the team and am valued that gives me something I need. I don't think I'm the only person who has this need to be a part of something they consider greater than themselves.
This is getting silly and sounds religious, and maybe isn't exactly what I mean, but I love my work.
The people doing the work know if they are shuffling hot potatos and they resent it over time if they are. At least some of them.
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Although I agree with both yourself and Joe I think you are being a bit naive. It is totally unfair that all of a team could be working above and beyond but that if a "bell curve" is applied then someone has to be marked down as under performing. This is way of the world, certainly in the financial sector, where one if beaten even if one achieves their goals ahead of the estimate, either because the goal is too easy (and therefore "not a goal") or because the estimation was wrong. This of course has the effect of making teams slow down if they are getting ahead so that they meet their target. The latter, however, is at odds with the object of the game (from a business perspective) which is to get something delivered, regardless of "quality". Better that we have something now rather than wait until next week. If it functionally works then ship it. Time is money. Even if it does have a number of defects then being the first to market is better than being second. Corporates (like people) are not inclined to change their banks/applications once installed.
So the whole thing becomes delivery focused and this is what the bonus' and pay rises are based upon (as long as one belongs to either of the groups you mentioned above).
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You are right, of course. If the options are naive or resigned, may I always be naive enough to keep seeking a better solution.
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Its an interesting idea, but my direct experience with team based performance rating was less than stellar. In cultures where the group is valued more than individualism, this is a great strategy. Unfortunately we in the US and the EU are not such cultures. What invariably ends up happening is blame gets assigned if someone doesn't like the review. In our culture, people generally respond better to personal goals based on measurements they find relevant to the larger team, department, and company mission. If people can't see how their daily work fits in with advancing the overall work, no amount of team building or compensation will foster camaraderie.
I think the problem with bonus compensation is its currently treated as part of your base salary by most people in our industry. I've had more than a few companies brag about being able to meet or exceed my salary rates only to find out at least 30% of that "compensation" is based on bonus and stock option grants. That's not a performance bonus, that's finding a way to hire a $100k professional at $80k and have them appreciate it. It's a neat trick, if you can pull it off.
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I think you are missing the point of this idea. It isn't about getting "a $100k professional at $80k", but it is not harming the part of the agile process that builds teamwork, trust, and collaboration. I kind of feel ill and balk at the idea that someone IS "a $100k professional" and would never step down from that promised money to become something greater.
I look forward to my chance to take a pay cut, a risk, and become something wildly better than I am now. I'm so much more than my current salary. It makes me feel like a hooker to think of myself as worth a certain dollar amount. Yes, I need to live and I want to be paid fairly, especially in comparison to others, but the golden handcuffs are icky. There are some people who will never take a dollar less no matter what. Then there are people like me who will work for free sometimes for a chance. Freedom is worth something money can't buy.
I think in this economy, the $100k professional is about to be undersold by an intern at most small companies, outsourced to another country if possible, and surpassed by a company paying partly in other currency. It is a trick I expect to see pulled off more in the future.
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The disconnect is my fault for not elaborating on the other side of the "bonus as compensation" pendulum which is the expectation of reward for completing your work in a professional manner. A bonus is just that, a bonus. It's a little extra slipped into your Christmas stocking as recognition of effort above and beyond the pale. Or at least it should be. These days many industries use the bonus as a major component if not primary component of compensation. People expect to be paid a bonus simply for doing their job. Perhaps they don't expect the full 20%, but they will expect the "guaranteed 10%" or whatever is officially or unofficially proffered. I've seen it more times than I can count. Employee X receives an annual bonus equating to 15% of their annual salary while employee "Y" only gets 12%. Even if the actual dollar amount awarded to employee Y is higher, they'll usually be pissed off about it and feel slighted, especially if they're on the same team.
It only becomes worse when the entire team is awarded a bonus rather than the person. In that scenario I've watched morale plummet rapidly as individuals start blaming each other for loss of income rather than praising each other for an unexpected gift.
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One solution to that: make the "team" bigger. I've never seen that blame game you describe - but then I've never worked in a place where the majority of your bonus wasn't determined by the performance of a much larger group than your immediate team.
Context: UK, large telcos.
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Lanette, I love this post. I don't even work in an Agile environment and it's got me all fired up.
I have some ideas about the way things get structured according to the unofficial hierarchy, and how pay is set. Thanks for inspiring me to write about it.
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Geordie,
I'm so glad you like this idea. I don't think I have the solution, but since we know the current mode DOESN'T work at all per science and that it is counterproductive and disruptive to agile teams, anything else has a good chance of at least not harming, even if it doesn't help. We need more examples of willingness to try something new.
The best use of money as a motivator is to take it off of the table so that people aren't thinking about money and are thinking about the work. To me, this means a job pays in the range of appropriate for the job I'm doing. Far more important to me are intrinsic rewards like trust, appreciation, a fun team, and interesting work. I'm somewhat of an idealist, so freedom to try my ideas is a big thing with me. Also, a place that I believe cares about me as a human will gain my loyalty. That means they understand some basics, like I'm a cat lover and if my cat dies I won't just show up at work like nothing happened the next day. Or that software conferences & my speaking efforts make me a better & more motivated tester. Supporting me in that means they get new skills from me. These things matter more than higher pay.
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Here's a true story I think you'll like.
I used to work for a company who offered a free piece of fruit to their employees on Mondays and Fridays. You could just wander down to the onsite canteen or cafe and help yourself to a piece of fruit. It was just one of the things they did.
One week the company made two separate announcements.
1) Due to the need to cut costs, they'd decided to scrap Free Fruit Mondays and Fridays. From now on, if you wanted fruit, you'd have to pay for it.
2) Due to the economic climate, there would be no pay rise this year. The normal yearly pay evaluation would be postponed until next year.
Now, in strict monetary terms, everybody stood to lose FAR more from the second announcement than the first. The yearly pay rise was worth a lot more money in your pocket than the equivalent of two apples a week. And a lot of people either never took the free fruit anyway, or only picked up a piece occasionally - so for them, putting that money back in the company coffers was potentially a net gain.
Want to guess which one people complained most about? And *kept* complaining about, for MONTHS afterwards? You could reliably kick off a massive, afternoon long, grumble fest just by *mentioning* it, even well over a year later. People clearly felt really betrayed and burned by it.
Yep. You guessed it.
No pay rise? Hey, the economy just fell off a cliff - we may still be making a profit, but we understand. None of us were expecting a pay rise anyway.
No free fruit? YOU DON'T CARE ABOUT US ANY MORE!
It wasn't about the money. Some of the most vocal complainers didn't even eat the free fruit. But it made them feel that the company cared about them and wanted them to be happy and healthy. Cutting a relatively trivial cost sent the message that the new management just didn't get it.
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Hi Lanette,
Every system has its benefits and drawbacks. The best thing is to learn the system as quick as possible and to make the most of it. I doubt there is a system/grading which will be considered "fair" by everybody, since renumeration is a value assessment based on human perception.
Regards, Leonard.
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The best thing is to learn the system as quick as possible and to make the most of it.
Really? This is where we disagree. I'll always think about the system. I'll always want things to be fair, not just fair for ME. This kind of thinking is what causes people to spend more time gaming the system, perverting the metrics, and making their paychecks grow than participating in making wonderful software that has a good impact on the future. The point of this blog isn't that it should be considered fair by everybody, just that it shouldn't undermine teams. A reward system that places the individual above the team is going to lead to agile perversion. I mean that people will flat out be unwilling to do what the team needs if it lowers their individual status in any way or their chance of getting a bonus.
The worst thing I see in these blog comments is the assumption that individual carrot and stick rewards WORK when science proves otherwise. Check out the book "Drive" or even the free videos that are 10 minutes about the science of motivation. Check out http://www.youtube.com/watch?v=u6XAPnuFjJc and the studies behind it. If every executive team saw the science they would know that these rewards have a negative impact on performance.
Don't believe the old fashioned status quo. There is more to learn.
Regards,
Lanette
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Hi Lanette,
What you described sounds so much like Wall Street.
Rebecca
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