First Steps with Merit Money At AVL India – Rewards That Actually Motivate

Two years ago Mr. Madhu Mohan, the Head of Software Development of AVL India, an affiliate of AVL List GmbH, asked me if I could suggest him a reward system that actually motivates employees and supports their Agile teams. I suggested the Management 3.0 practice Merit Money and supported them during implementation.

AVL India has about 50 employees working in the software development department. They are organized in 8 agile teams, who develop cutting-edge software products for the modern vehicle development process.

During my last visited in December 2017 I reflected with Mr. Madhu Mohan (Head of Development) and Mr. Sunil Singh (Lead Scrum Master) about the current state of implementation of Merit Money.

Me: What was your initial motivation for introducing Merit Money?

Mr. Mohan: We needed a reward scheme, which could not be tricked. Earlier we faced the problem that employees tried to trick the reward scheme by applying politicial tactics. Also the team should get the main influence on reward distribution. Further it should fit to our team-based approach that we implemented since our introduction of agile practices, three years ago.

Mr. Singh: Team work and motivation are key for us. So we needed a highly transparent and motivating reward scheme, which enforces everyone on a team to support other team members.

SW: How did you implement Merit Money?

Mr Mohan: We decided to pilot Merit Money in 2 of our teams to see how it works. After evaluation we decided the next steps.

Mr. Singh: I was responsible for introducing Merit Money in both pilot teams. We believed that both teams were mature enough to start with this practice. We met with some resistance in the initial phase as people were skeptical about the whole process.

SW: How does Merit Money effect team work and motivation of the team members?

Mr. Mohan: As I see it, each team member strives to earn the respect of other team members by contributing to the team cause.

Mr. Singh: We find that each member of the team is always ready to help other team members. By making the results of the polls public, it becomes a great motivating factor for the team members.

SW: What threads do you see with Merit Money?

Mr. Mohan: There will be some complacency that sets in. Typically I could notice that some members were just doing an average distribution of the virtual money amongst all team members without putting any thought to it. So the Agile Coach has to constantly support the team till they get mature with the practice and as a team.

Mr. Singh: Watch out for suspicious patterns at least in the initial phases and provide a safe environment.

SW: What tips can you give to others who want to introduce Merit Money?

Mr. Mohan: You should do the polling at the end of each (2-week) sprint before people forget the contribution of others. We must pay  attention regards confidentiality, due to the concerns brought up by the team members. It will not be  nice for a team member to know that someone else rated him low. This was the biggest challenge I faced in one of the teams. Today technology and platforms are so advanced that there are multiple options to do a confidential polling. One of the teams has adopted Google forms for this. And it works fine.

Mr. Singh: Create a light and friendly environment during the rating exercise. Too much of explanations (why 9? why 3? etc) will not let the process succeed. So make people feel that it is part of their routine work.

SW: What are your future plans regarding Merit Money?

Mr. Mohan: I would like to roll out the process to all the teams and some weightage of the annual appraisal system should be derived from this.

Mr. Singh: We should be able to use this to make better performing teams from current standards.

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Stefan Wunder

My name is Stefan Wunder and I am a passionate Lean & Agile Coach from Graz, Austria. I have been applying Lean & Agile methodologies in various industries and contexts since 2006. Since 2014 I am working as Agile Coach at AVL List GmbH, the world’s largest independent company for development, simulation and testing technology of powertrains (hybrid, combustion engines, transmission, electric drive, batteries and software) for passenger cars, trucks and large engines. I have a Master of Science in software development and business economics. I am Certified Systemic Coach, Certified Scrum Professional (CSP), Certified Scrum Master (CSM), Certified SAFe Program Consultant (SPC) and Certified LeSS Practitioner. I am speaker at conferences, and moderator of the Scrum User Group Graz.

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