Steering through Incentives in Large-Scale Lean Software Development

Abstract

Abstract. The application of lean principles and agile project management techniques in the domain of large-scale software product development has gained tremendous momentum over the last decade. This results in empowerment of individuals which leads to increased flexibility but at the same time sacrifices managerial control through traditional steering practices. Hence, the design of adequate incentive schemes in order to align local optimization and opportunistic behavior with the overall strategy of the company is a crucial activity from a business perspective.Following an agent-based simulation approach with reinforcement learning, we (i) address the question of how information regarding backlog item dependencies is shared within and in between development teams on the product level subject to different incentive schemes. We (ii) compare different incentive schemes ranging from individual to team-based compensation. Based on our results, we are (iii) able to provide recommendations on how to design suitable incentive schemes in order to enable a goal-oriented steering of individual behavior in order to support the overall company objectives.