How can team performance be evaluated based on velocity?

Evaluating team performance based on velocity involves understanding the context in which each team operates. Each team may have different dynamics, work environments, and definitions of done, which means that their velocity is influenced by various internal and external factors. By evaluating the velocity in the context of each team, one can better assess how well a team is performing relative to its own historical data, goals, and the complexity of work undertaken.

Contextual evaluation allows teams to set realistic expectations and measure improvements over time rather than merely comparing raw velocity figures across teams, which can be misleading due to differing contexts. For instance, a team that consistently delivers high velocity may also be facing less complex tasks or may not be including all necessary work in their velocity calculations. Thus, by focusing on the context, teams can have a more nuanced understanding of their performance, enabling them to identify areas for improvement and adjust their processes accordingly.

This approach is crucial for promoting a culture of continuous improvement within the Scrum framework, aligning with the principles of transparency and inspection.