6 ways agile methodology is changing the HR landscape
There is a new buzz word in the HR world and it’s called “agile.” By definition, agile is “the ability to create and respond to change in order to succeed in an uncertain and turbulent environment.”
Historically, the agile methodology originates from the tech world, specifically under software development. Agile software development was standardized in the early 2000s by a group of developers, with the objective to improve the responsiveness of software development teams and develop a better approach to software development. Over time, it became the most popular approach as evidenced by the latest State of Agile survey that covers a broad range of industries in the global software development community, where it was reported that over 97% of respondents' organisation practise agile development methods.
Today, the agile methodology is making its way into the HR world as HR has become more complex thanks to an increase in globalisation, introduction of new technology, intense business competition, transformational adjustment and rising life expectancy of today’s modern world. More and more HR professionals have started to realise the need to re-engineer their traditional HR processes to allow themselves to become nimbler and responsive to the needs of talents.
A recent Harvard Business Review (HBR) article by Professors Peter Cappelli and Anna Tavis illustrates some of the profound changes companies are experiencing in agile transformation and how companies are redesigning their talent practices in the following areas:
Performance appraisals As one of the oldest traditional HR practice, it’s no surprise that the annual performance appraisal was the first to go. Adopting an agile approach would mean dropping the annual performance appraisal and switching it to frequent performance assessments, often conducted after (or even during) a project is completed. The objective is to provide instant constructive feedback throughout the year, to allow employees to become nimbler and rectify mistakes made, to improve on performance and churn out better results. This change has spread to companies such as General Electric (GE), IBM, Pfizer, P&G and all Big Four accounting firms.
Coaching Another major change is the focus on sharpening managers’ coaching skills, as seen in P&G and at Cigna, an American health services provider. The objective is to move from judging employees to creating a culture of coaching by providing better feedback on employees’ day-to-day work and developing internal coaching capabilities. The idea involves not just a coach and an employee but peer-to-peer feedback and sharing of ideas are encouraged between coaches. It is run based on the concept that if one experiences good coaching, one would naturally become a good coach himself/herself. Such good relationships are also said to increase employee engagement, while improving company innovation in return.
Teams HR professionals commonly function as individuals. But as more companies organise their work on project basis, there is a need for HR professionals to start working as a team. This is where “scrum”, one of the most popular frameworks for implementing agile, comes into play. Scrum, in rugby, means the huddling together of team members to restart the game. Scrum teams create, execute and revise goals with a strong “we” attitude. They can track their own progress, identify challenges, assess their leadership, generate insights and are very nimble in the sense that they can quickly change to a new information as and when the need is required. This change is evidently seen in Bank of Montreal, where tech employees joined cross-functional product-development teams to make the bank more customer focused.
Compensation As more and more employees prefer frequent performance assessments, the reward systems are changing as well. This change is seen in Patagonia, an American clothing company, where the company has eliminated annual raises for its knowledge workers. Annual reward systems are no longer effective as instant reward systems are now gaining popularity. According to the HBR article, employees are more motivated when rewards are given (instantly) after the completion of a project or a task, compared to an annual basis reward system. In some companies, compensation is also being used to encourage agile values such as learning and knowledge sharing where employees will be rewarded for honest constructive feedback.
Recruiting When it comes to recruiting, the new agile approach depends very much on team effort. For example, being an agile organisation, GE also uses a cross-functional team on all of its hiring requisitions, to add depth into the hiring process as candidates can be evaluated from multi-faceted perspectives / experience. It then appoints a “head count manager”, who represents the interests of all internal stakeholders who want their positions to be filled quickly and appropriately. Vacancies will be ranked according to top-priority hires and teams will work together to fill these positions by sharing information about candidates to one another. The process also involves the rotation of hiring managers on and off the team, depending on whether they’re currently hiring, and a scrum master (the facilitator of the agile team) will oversee the overall process. Recruitment process proceeds as team effort; as long as there is no consensus on the desired attributes or skill set of a vacant position, hiring for that position does not proceed.
Learning and development There is a change in HR’s learning and development division as well, where new skills are introduced into organisations more quickly. Some companies achieved this by providing a suite of online learning modules that employees can access on demand. Interestingly, the HBR article also points out that companies such as IBM are adopting newer approaches that use artificial intelligence to identify the skills required for a particular job and for advancement. This data analysis also helps to suggest the type of training that are suitable for employees based on their profiles, experience and interests. This approach mitigates the risk of employees being lost in the endless topics of online learning modules and give better guidance towards learning based on their strengths, skills and job scopes.
The modern workplace will continue to experience volatility and unpredictable changes, forcing HR professionals to respond and rethink their strategies to deliver better results. To become a winner in the war for talent, HR must ultimately reshape itself and embrace agility. Just as how agility has dominated the tech industry, it won’t be long before the agile methodology also becomes the most popular approach in order to succeed in the HR world.
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