Performance Management in Self-Managing Teams : A case study of a knowledge-intensive company

University essay from Linköpings universitet/Industriell marknadsföring och industriell ekonomiLinköpings universitet/Tekniska högskolan; Linköpings universitet/Industriell marknadsföring och industriell ekonomiLinköpings universitet/Tekniska högskolan


For many companies, especially the ones that are knowledge-intensive such as consulting companies or service delivery firms, it has been increasingly popular to organize the employees in so called self-managing teams. These teams have proven to increase efficiency as they reduce overhead costs by not having the need of being supervised by a manager. These teams should handle the daily work tasks by themselves as well as make decisions, handle the teams’ development in line with company desires, and work towards greater performance. Furthermore, the teams need to structure the performance management and be able to handle all the activities that are included within that process. Performance management is a process that is designed to improve the overall performance at the company. Activities within the process include goal setting, performance feedback and performance appraisals. All these activities should help the company with structuring a way of getting the right input for giving the suitable rewards to their employees. The team will always be influenced by different factors that will affect the team: both from within the team and from the organization as a whole. Therefor, the purpose of this thesis was to investigate how external factors (within the organization but outside the team) and internal factors have an impact on the self-managing teams within knowledge-intensive companies, and how well they can perform the performance management activities.

To be able to answer the purpose, a case study was made at the IT-consulting company Findwise AB. A year ago (Spring 2011), the three development teams at the Stockholm office got organized in more permanent teams. They saw a need of structuring their daily work and therefor they implemented the agile working method Scrum at the office, a working method focusing on iterative and incremental development.  They started to operate more self-managed and a lot of the responsibilities that had been managed outside the team were now integrated towards the team. This fall (2012), the Team Leaders in each team will begin to take over the responsibility for parts of the performance appraisal process, a performance management activity that previously was done by an external manager outside the team.  Furthermore, the team should to a greater extent than before, handle other performance management activities, such as setting goals and giving performance feedback.

The case study showed that the following external factors have an impact on the executing of performance management activities within the self-managing teams: external leaders and the information systems. Furthermore, the group beliefs and meeting organizational objectives, roles and responsibilities, and team composition were internal factors that had an impact. During the analysis, it became clear that things that were found in the empirical data collection also affected how effective the performance management activities were executed within the teams. The external factors were the internal processes at the company, which refers to the fact that the team members also have responsibilities outside the team, and the external Project Leaders, which refers to that the teams sometimes uses Project Leaders for the customer projects that are not held permanent within the team. A new internal factor that was found was the various working methods that were used between the development teams.

The recommendations given to the case company included the need of setting clear goals that are tangible, as well as having attainable goals connected to a carrier plan. Furthermore, the study showed a need of implementing performance feedback sessions were input from all relevant stakeholders, inside and outside the company, could be gathered.

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