As enterprises are becoming increasingly Agile, the role of HR in Lean-Agile organizations is being challenged to expand beyond process-oriented HR management, and into truly Lean-Agile people operations. In this series of posts, we’ll be discussing why HR goes Agile, and what happens when HR goes Agile—and how high-performing organizations should approach HR’s transition into fully embracing the Agile methodology.
Why HR Goes Agile
In general, the need for Agile transformation has been driven by a variety of technological, economic, and social factors, which you can learn more about here. The need for Lean-Agile principles and practices in HR specifically has come from a fundamental transition in the workforce that has occurred in the past few decades.
Decades ago, organizational excellence was the result of effective control of employees. Employees were viewed as cogs in a wheel—and the best results were achieved when those cogs all performed the jobs that were assigned to them. Power trickled through the organization from the top down. The role of HR was to ensure that no one’s legal rights were infringed, and that the cost of these ‘resources’ stayed within the organization’s budget.
This method of management worked fine for manufacturing in the 20th century but is obviously poorly suited to the needs of modern-day enterprises. Today’s enterprises rely heavily on the intelligence, creativity, innovation, and discourse of an empowered, diverse workforce.
Modern organizations, especially Lean-Agile organizations, recognize that “talent, knowledge, and leadership are the new currency for competitiveness.” They defy traditional, task-based management. This means that, now more than ever, the need for effective people and performance management is a strategic imperative.
This new way of managing and thinking about work challenges HR to rethink people operations—from hiring and onboarding to retention and professional development—across the organization.
How HR Goes Agile: Applying Lean-Agile Principles to HR
Lean-Agile values and practices can be used to improve employee engagement, performance management, and more. We’ll go into more specific, actionable steps you can take to embrace agility in your HR organization in the later posts in this series. For now, let’s talk on a high level about how Lean-Agile principles are applied to people management.
Redefine the Talent Contract
Management expert Peter Drucker defines knowledge workers as, “....people who know more about the work they perform than their bosses.” Knowledge workers are the lifeblood of the modern enterprise. They are responsible for converting information into knowledge, and that knowledge into actionable systems and solutions.
As the experts at Scaled Agile Framework explain, “It is their ideas, experiences, and interpretations that keep businesses moving forward. The results of their intermediate work are often tangible and require improvisation; the use of judgment in ambiguous situations, as well as interactions with others, is continuously required.”
As such, it is the role of HR to define and honor a new talent contract: One that understands the drive of knowledge workers and recognizes the power shift that comes with it. Knowledge workers seek more out of their work than simply a paycheck. They seek meaning and purpose and appreciation and respect. They want autonomy, mastery, and purpose.
As such, the HR function is not to simply put out fires as they arise; it’s to proactively, collaboratively, work with employees to create systems for hiring, onboarding, retaining, and empowering employees that are healthy, sustainable, and focused on the employees’ experience.
Foster Continuous Engagement
There is an abundance of research that shows that employee engagement is more than just an idealistic HR goal: It’s actually a proven employee retention strategy. According to research cited in the Harvard Business Review, enterprises with engaged employees have much higher returns.
Another reality of the talent market today, that wasn’t the case just a few decades ago: People simply don’t stay with companies like they used to. The average Baby Boomer held roughly 11 jobs between the years they were aged 18 and 48, according to recent data from the Bureau of Labor Statistics (with even more job hopping seen by Millennials and younger).
Part of this is inevitable: You aren’t likely to have many spend their entire careers with your company, and that’s okay.
However, engaged employees are more likely to stay with the company. And the best way to lower turnover is to invest in people. The vast majority of employees worldwide are dissatisfied, disillusioned, and disengaged. Actively developing people takes away their need to switch jobs in order to advance in their careers or grow their skills.
Lean-Agile practices allow people to grow professionally, through challenging work, powerful collaboration, continual feedback, engagement with goal setting, and relentless improvement—all embedded into their workflow. Unlike in most organizations, where ‘professional development’ is treated as being a separate, extracurricular activity, Agile organizations encourage continuous learning, recognizing that the goal for Agile enterprises is not simply to retain talent, but to develop a rich, flourishing talent pool of engaged employees.
Hire for Cultural and Attitude Fit
Building that rich, flourishing talent pool of engaged employees starts with identifying, attracting, and hiring the right people. Agile HR organizations focus on developing a high-quality hiring process that accurately, effectively recruits best-fit candidates.
- Using organizational Agility to attract top Lean-Agile talent: Candidates who are already working in Lean-Agile environments will be attracted to Lean-Agile organizations.
- Hiring/promoting internally: Promoting talent internally is not only a cost-effective way to fill open positions, it’s also a great way to boost morale within the organization.
- Hiring team players: Agile is a team sport; no brilliant jerks need apply. Don’t just take a candidate’s word for it—design a hiring process that tests a candidate’s ability to collaborate on a team to make sure they’re the right fit for an Agile environment.
- Mastering the onboarding process: The way you onboard employees can make or break their experience at your organization. Set employees up for success by developing an engaging, effective onboarding process that is regularly updated as processes and policies evolve.
- Including teams in the hiring process: Talent acquisition is a delicate art—cultural fit and attitude are just as important as hard and soft skills. Make sure to include the people who will be working closely with the candidate in the recruiting process, to make sure that the candidate is a good fit on paper and in reality.
Improve Performance Management Practices
Traditional performance management practices are heavily criticized as being largely ineffective. In the context of an Agile environment, they make little sense: If Agile is all about iterative development and continuous improvement, why do we continue to evaluate employees just once a year? What’s worse is that performance management has been coupled with compensation and promotion decisions—meaning that a person’s job title, and how much they are paid, are discussed directly in terms of how they have performed.
Sometimes, performance can be tied to specific compensation or promotion decisions—but mostly, tying all of these conversations into one annual nerve-wracking conversation is ineffective, as the experts at Scaled Agile Framework explain: “Managers tend to batch feedback, both negative and positive, into the annual feedback dump, depriving employees of the timely feedback they need to actually improve when it matters; and employees are nervous about their appraisal as it affects their upcoming compensation and promotional chances.”
This challenges HR to completely rethink performance management at every level. Following the overall movement of Agile organizations toward iterative, continuous flow, Agile HR practices emphasize performance management practices that emphasize continual feedback, regular alignment to larger goals, and frequent check-ins between managers and the employees who work under them. We’ll share more about Agile performance management practices in upcoming blogs!