SAP, the German multinational software corporation that is also one of the largest makers of performance review software for employees worldwide, has decided to drop its own traditional annual performance reviews, giving way to an on-going new technique of measuring performance. The company is of the view that the annual system of performance reviews is too expensive, time-consuming and demotivating.
Talking of the change in performance management system, Bhuvaneswar Naik — head of global talent experience, talent and leadership-SAP— tells HRKatha, “SAP is at the forefront of innovation in the performance management space. We are evolving our performance-management programmes to build a culture of continuous dialogue between manager and employee supported by strong enablement and tools. We are bringing to life ‘Real Conversations in Real Time’. This indeed supports our strategy to continue to build a high-performance organisation.”
“We want to spend more energy on employee coaching and feedback, not less! What we are doing is creating more effective, on-going methods to engage, develop, and invest in employees,”
To break the general perception and the confusion around why an organisation, which is itself a provider of performance-management software to companies, is dropping its own, in another official blog Naik shared that, the ‘transformation’ is not about ‘eliminating’ things. “That’s the wrong way to think about it. We want to spend more energy on employee coaching and feedback, not less! What we are doing is creating more effective, on-going methods to engage, develop, and invest in employees,” he says.
The company will continue to differentiate employees based on their contributions and potential, but is moving to a method that is more ongoing, collaborative and capable of replacing the usual once-a-year process. SAP will be doing this through extensive use of SAP SuccessFactors technology to discuss and differentiate employees based on performance. These tools will be used to drive on-going futuristic discussions focussed on identifying and developing employee potential.
The new process at SAP is being called ‘SAP Talk’. It is concentrated on creating more continuous dialogue and feedback. There is also another process that is still in initial deployment that will lead to frequent group round tables to proactively identify, discuss and invest in developing workforce potential. The company began testing this along with a bundle of other supporting programmes on approx. 1,500 employees this year.
The annual performance reviews that have been the way of the world are lately being viewed with a lens of suspicion. A lot of companies have recently moved to alternate methods of performance measurement doing away with the annual scoring. Large organisations, like IBM and GE, dropped the system this year. Organisations such as Accenture, Adobe and Netflix had earlier ditched their annual appraisal process while Infosys also decided to do away with it recently. SAP, however, is one of the first major European companies to join the trend that began across the Atlantic.