SAP Plans for More Coaching and Feedback in Lieu of Annual Reviews

By Aliah D. Wright Aug 19, 2016

When asked if he thought it odd that a company that provides performance evaluation software is now eliminating annual performance evaluations, an SAP spokesman told SHRM Online Aug. 18 that "it's important to stress that this 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," said Steve Hunt, SAP SuccessFactors senior vice president of human capital management research.

"What we are doing is creating more effective, ongoing methods to engage, develop and invest in employees," he said.

That doesn't mean that the company is going to quit selling the SAP SuccessFactors widely used cloud-based human capital management software. It has 4,450 customers and 40 million cloud application subscribers. SAP uccessFactors is "one of our leading cloud technology solutions. We use it extensively in our own company as well," Hunt said.

The Germany-based company joins other organizations that have either replaced or eliminated annual performance reviews.

Accenture, Adobe, Deloitte, Gap, General Electric, Medtronic and Microsoft have substituted annual performance reviews with other approaches.

Many companies said they stopped the formal annual evaluation of employees because the process took too long, was dissatisfying for employees and managers, and created friction among colleagues.

CEB (formerly the Corporate Executive Board) says 6 percent of Fortune 500 companies have gotten rid of evaluations entirely.

Hunt told SHRM Online that SAP will continue to "differentiate employees based on their contributions and potential. But we are moving to a method that is more ongoing and collaborative that will replace the once-a-year annual process we used to use."  

He said SAP is transforming its own internal performance management process and has developed new software to manage that transition.

The new internal programs, which focus more on continuous communication, feedback and talent development, are called SAP Talk and SAP Catalysts.

Specifically, SAP Talk is "for more continuous dialogue and feedback," and SAP Catalysts is "for more continuous, group calibration of performance and potential based on employee contribution," Hunt said.

"Catalyst and Talk are the internal names for our new processes. These processes make extensive use of the SAP SuccessFactors Performance & Goals solution including our Continuous Performance Management, Goal Management, and Calibration tools. All these are available to the public."

"We began testing these programs with 1,500 employees in 2016. We will provide more findings and updates as we progress," Hunt said.


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