(Originally posted on ScrumAlliance.org)
I work for an organization that has a defined hierarchy system that has prescribed reward and merit subsytems. Thankfully, there is also built-in flexibility for the departmental leaders to develop talent and have additional rewards to motivate, inspire, and award individuals and teams for performance.
I truly believe the best reward for individuals is the reward that is both unplanned and presented by peers. There is ample research to show that planned rewards, such as annual bonuses, do not have as great an impact on employee morale, performance, and happiness as does an unplanned reward structure. When an individual knows the process for performance monitoring, they perform to that degree of monitoring. In the Agile Manifesto, the first principle states, “Individuals and interactions over processes and tools.” As an agilist, I not only strive to live this and the other principles but I place high value on the relative position of this core belief above all others laid out by the manifesto signers back in 2001 in the Utah lodge.
Placing individuals over the process in this context means to structure rewards at the individual level, on an irregular basis. Said another way, implementing a method by which anyone can be awarded at any time for anything seen as good. Equally as important to having an open system is the input sources to the system. Managers muddy otherwise healthy human interaction at times — stated from my perspective as a manager of many people. Rewards that are given from one peer to another peer in plain view of managers has proven to be much more meaningful and impactful than the traditional “top down” reward system.
A method by which anyone can be awarded at any time for anything seen as good.
Last year my team adopted the Firestarter and Fix-It awards. The Firestarter award is meant to call out an individual who invokes passion and drive as an aspect of our team. The change can be a new technology, a new process change, a new way of thinking — 
anything that enables us to improve. (Yes, the term “Firestarter” was intentional, to break from old habits wherein “firefighting” is seen as a good trait.)
The Fix-It award is meant to call out an individual who took some aspect of our code, process, communication model, or overall delivery steps and improved it. While this can be technical in nature, the nomination is not limited to technical improvements alone. Team members are empowered to think outside the box when it comes to the Fix-It award.
As the implementation of the awards came to fruition, the primary focus was to have an easily accessible award collector, to have a real-time feedback loop for the person submitted, for it be outcome based (not behavior based), and for it to be driven by peers but presented publicly in front of managers. One critical aspect of my team that makes this
process valuable is the dispersed nature of the group. We have team members in India, U.S. Eastern time zone, and U.S. Central time zone. Placing a pile of index cards and a pen next to a shoe box with a slot cut in the top does not fit this team structure. Thankfully, we have SurveyMonkey to address issues just like this! With a simple three-field survey creation (your name, the nominee’s name, and a message about why they are being nominated), the virtual shoe box is complete.
Throughout the sprint, with a reminder at every retrospective, team members can award their peers with a note of praise, which is immediately shared with the recipient, including the name of the peer who awarded them. The only manager involvement is the sending of the award notification to the recipient — Survey Monkey does not have the ability to do this as far as I am aware.
After five sprints, we aggregate all individual peer recipients. Whoever has the most nominations gets their name engraved on the associated plaque and rights to keep the plaque on their desk for the next five sprints. Whenever needed, the plaque is shipped to the o
ffice or home of the virtual team member. In the event of a tie (which has happened), we all as a team figure out how to share the award for five sprints.
The award itself is a small symbol of a greater honor: the peer recognition that stands behind the plaque. (As a side note, creating the plaques is a great and inexpensive craft you can do with your kids if they are in the right age.) Seeing the excitement and happiness from the team following the award presentations, you instantly realize there is great pride and motivation resulting from the award process.
There are multiple byproducts of implementing an intrinsic reward system such as this. First, it creates an increased level of employee engagement by showing there is recognized value in what they do every day. Second, it creates an environment of trust by giving team members an outlet by which to recognize peers in the open, and conversely by allowing individuals to accept recognition. The intrinsic reward system caters to all four of the happiness chemicals as well, allowing for an increase biological trust compounds in our body. Third, there is a management feedback loop provided directly from the trenches. Managers try to observe and learn about teams and individuals both up close and from afar. However, it is often difficult for performance to change when individuals know they are being monitored. Having a peer system allows for true and meaningful feedback loops. And finally, it just feels right. Allowing people to formally thank their peers is appropriate at all times, but not creating a means to do so may inhibit this communication.
The evolution of this process is likely to change. We may modify the tools, the awards, the criteria, etc. However, there are several truths that will remain resolute:
- Don’t promise rewards in advance.
- Keep anticipated rewards small.
- Reward continuously, not once.
- Reward publicly, not privately.
- Reward behavior, not outcome.
- Reward peers, not subordinates.
These principles are documented by the Management 3.0 movement, and there is further learning about the background on the Web.
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