In Sept 2016, I wrote a blog on how #SAP was re-imagining its Performance Management program branded ‘SAP Talk’. I reflected on our compelling need for change – moving away from annual reviews and ratings towards a culture of continuous dialogue. I also reflected on our learning on what it takes to drive one of the biggest HR transformation projects on a global scale at SAP.
On 14-Mar-17 we launched SAP Talk in a phased approach and by 3-May-17, we were live in all countries and units of SAP, globally, touching 85,000+ employees. All this in just 15 months since the kick-off meeting. While SAP is amongst global early adopters to transform its performance management approach, we are possibly the first German multinational to do so.
Our business case was clear:
1. Feedback from our employees and managers (via internal surveys) told us that our traditional performance evaluation process was found to be complex and outdated.
2. Our CHRO, Stefan Ries, had the courage to disrupt with a clear intent to do the right thing to dramatically enhance our employee #experience, ensuring we deliver higher performance culture and business impact than before
3. We understood the science behind how our brain reacts to performance ratings and its adverse impact on motivation and engagement.
4. We also found that removing ratings does not lead to complacency rather improves performance and engagement
Together with our social partners, we designed our new performance management program and called it ‘SAP Talk: Real Conversations, Real Time’.
What is SAP Talk:
1. Quarterly conversations focusing on goals, feedback, development and working conditions replaces ratings
2. Talent Roundtables focusing on employee development replaces traditional calibrations
3. Eliminate all possibilities of shadow ratings
4. Retaining pay for performance culture
Transformation on global scale meant we needed to know what we don’t know. So rather than going for a big bang approach, we chose to take ‘early adopter’ approach in 2016 with 10% of our employees participating in SAP Talk. We measured two things: 1. If conversations are happening
2. Quality of conversations
To understand the health of the program, we ran quarterly upward feedback surveys with 6 simple questions:
1. My manager and I have a regular/continuous dialog (Yes/No)
(On a scale of 1-5, 5 being strongly agree)
2. My manager and I focus on my development during our conversations.
3. I have a clear understanding of what is expected of me regarding my goals / tasks / projects.
4. My manager helps me in making my working conditions supportive.
5. My manager helps me to identify my strengths and potential development needs.
6. I experience that my manager and I are living the new continuous dialogue culture.
The early adopter results were beyond our expectations. Appx 90% employees said they are having continuous dialogue and we achieved a rating of 4.1 on the quality of conversations. This was possible because of strong communication and enablement programs we put in place.
While the primary premise of #SAPTalk is to provide frequent feedback and have development conversations with employees, it is also changing the way we work, develop and learn. Some examples:
1. We are enhancing learning experience because everything we do at work helps us learn and this includes regular growth oriented conversations between managers are employees. Josh Bersin eludes this well in his article ‘The Disruption of Digital Learning: Ten Things We Have Learned’. And this reflects in SAP Talk’s basic premise
2. SAP Talk is helping us eliminate bias at workplace and supports our Diversity and Inclusion agenda. Dr. Paola Cecchi-Dimeglio, in her HBR article says by adopting a more objective criteria together with frequent dialogue, it is possible to remove subjective biases that creep in.
3. Trust. Our CEO, Bill McDermott has always told us that trust is the only currency we have. Since last 5 years, SAP measures Leadership Trust Net Promoter Score for all its managers via our annual people survey. We found that Managers who were SAP Talk early adopters had higher trust ratings by their direct reports in the People Survey than non-early adopter managers in 2016.
4. SAP Talk will also play a key communication platform role. With five generations of employees at work, information consumption differs dramatically. However, one common pattern will be the regular conversation between managers and employees and I reckon that soon all important employee communications around our strategy, execution and results will be delivered via SAP Talk.
Lastly, Tool follows process: When you embark on a culture change agenda, focus should be on understanding the philosophy, internalising the new approach, reasoning it out and living it and not to focus on ‘how to’ about tools that supports the program. Therefore, deliberately, we are introduced SAP Talk application to our employees couple of weeks after going live as an important step in our change management approach.
One size does not fit all. As my colleague and HR thought leader Dr. Steve Hunt says, your performance management process has to be uniquely yours.
Today, we are on, alive and kicking.
About Bhuvaneswar Naik
Bhuvaneswar Naik has over 25 years of experience and has worked with organizations like SAP, Capgemini, Yahoo, SAP AG, S E Technologies & Taj Group of Hotels. Bhuvaneswar holds a MA PMIR, HUMAN RESOURCES from Tata Institute of Social Sciences.