The Maker of SAP Refuses on Software’s Annual Performance Reviews

The maker of Germany’s SAP software (SAPG.DE) has been relying on the software for grading the performance of millions of employees worldwide-is refusing on its annual reviews, because of high expense, de-motivation, and high expense.

SAP has been a champion of annual appraisals and better productivity, but it’s now falling out from the list of business leader’s likeness. The major companies include: Gap (GPS.N), IBM (IBM.N) and others like General Electric (GE. N), where Jack Welch, the Chief Executive for all became the reason if it’s popularity.

This famous trend took a start by the very first European company, SAP, that holds and American CEO with almost one third of its employees as Americans. Employees disregarded the ritual of annual performance review.

Europe’s biggest software maker, Wolfgang Fassnacht said that SAP’s human resources are heading towards process that is more counter-productive against aiming for constructive dialogue.

He said to Reuters,

“Grading workers did not work. People are open to feedback, also to harsh criticism, until the moment you start giving scores. Then the shutters go down,”

SAP however, is currently testing a new process where the focus will be on regular check-ins of 8,000 workers. This process should be implemented by next year on all of its 80,000 employees.

He further said,

“The old system is too static. It no longer reflects the dynamic circumstances we are operating in.”

SAP is the HOT TOPIC of the Time

SAP undoubtedly is a world leader in HR software and has made huge changes in performance management. The acquisition of cloud-computing companies by SAP amounted to $3.4 billion in 2012, USA. You will receive great feedbacks of customers; this can be the major factor for influencing the decision of ditching the dreaded annual reviews.

“I meet many HR managers at other companies. The topic is on everyone’s mind at the moment,” he said. “This is actually one of the hottest topics discussed in the HR area.”

SAP will continue to sell itself as performance assessment software, so it’s not completely putting itself out from business. By February next year, SAP will be announcing the introduction of continuous performance management tool for employees.

There are companies that are still re-assessing the annual review, management consultancy Strategic Factors-Sydney based, warned against ditching employee reviews wholesale.

“Regular check-ins are great, this ongoing conversation and coaching model, but we also need performance measurements. We need to be careful to not chuck out the baby with the bath water,” said managing director Graham Kenny.

The changes will still be considered, yet the decision of SAP maker will lead the reviews. For further details and progress in this regard, follow Abacus Consulting as it established business strategies by implementing SAP.

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