People often confuse Velocity with effectiveness .e.g. ‘my team are delivering many Story Points therefore they are amazing.’

Velocity does by definition assume a degree of quality output by any Agile Software Development Team, by the virtue of the fact that you should only count accepted Story Points towards your velocity.

With that said, there are many other factors that need to be considered when assessing the overall effectiveness of the team.

Traditional performance management practices such as the Balanced Scorecard use Key Performance Indicators (“KPIs”) to measure the effectiveness of a team.

We can apply this concept to an Agile Development Team by considering performance in the following areas – an Agile Balanced Scorecard:

1. Reliability – are the team delivering what they say they will? Read more about Reliability
   
2. Quality - live defects, beta defects, stakeholder satisfaction  Read more about Quality
3. Value - are we delivering the highest value User Stories? How productive/profitable are we? Read more about Value
4. Velocity - Read more about Velocity

• Measuring Reliability
• Measuring Quality

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Related articles:

• The Agile Balanced Scorecard – Tracking the Reliability of an Agile Software Development Team (agile101)
• The Agile Balanced Scorecard – Tracking the Quality of an Agile Software Development Team (agile101)
• Using Velocity to measure the Productivity of an Agile Development Team (agile101)
• Agile Balanced Scorecard (lithespeed.blogspot.com)